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Pension watchdog slams merger plan

Outgoing pension ombudsman David Laverick has fired a parting shot at proposals to merge his office with the Financial Ombudsman Service.

Laverick completes his six-year term on August 31 and will be replaced by Tony King, who is an ombudsman at the FOS.

In Laverick’s last annual report, he says the Government’s acceptance of the Thornton review’s recommendation to bring together the PO and FOS is flawed. “I shall be glad not to be further involved in the matter,” he says.

Laverick adds: “There is much I admire in the FOS but the scale of its operations puts it outside my own concept of how an ombudsman should look.

“I shall watch with interest whether the Government is indeed prepared to allow disputes of fact and law relating to pension schemes to be dealt with according to the much less regulated procedures used by the FOS than has been the policy over the period when there has been a PO. “

The report reveals that the PO saw an 8 per cent increase in enquiries to 3,023 in the last tax year although the number accepted for investigation fell fell from 33 to 27 per cent.

Costs rose by a fifth from £2.1m to £2.5m in 2005/06, with staffing costs up from £1.7m to £2.1m.

The number of cases referred to the FSA or FOS almost halved from 8.12 per cent to 4.8 per cent.

Last year, the PO closed 1,133 investigations and opened 702 new investigations.

Of the closed investigations, 14.9 per cent related to scheme wind-ups, 13.9 per cent to pension transfers, 11.1 per cent to ill-health pensions, 9.8 per cent to the calculation of benefits, and 5.1 per cent to poor advice.

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