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Sipp customer compensated for transfer delay


Sipp providers Curtis Banks and Fidelity must compensate a client after he complained that a pension transfer delay resulted in him losing £14,000.

The Pensions Ombudsman upheld the complaint and ordered that Curtis Banks and Fidelity recalculate the compensation payable to the complainant at the settlement date with Curtis Banks paying 64 per cent of the compensation and Fidelity paying 36 per cent.

The compensation is to be paid into the complainant’s Fidelity Sipp.

Both companies must also pay the man £250 for distress and inconvenience.

According to the ombudsman’s decision, Fidelity sent the details of the man’s transfer request to Curtis Banks on 4 December 2014 through Origo. Curtis Banks received the request on 5 December and changed the Origo record to show it was “in progress”.

On 9 January, Fidelity telephoned Curtis Banks for an update on the transfer. It was told the transfer could not be completed through Origo because it was “out of scope” and that Curtis Banks would send Fidelity forms for it to be processed manually.

Fidelity received the forms on 13 January but did not send anything to the complainant until 30 January. The complainant returned the letter of authority to Fidelity on 5 February and the discharge form on 19 February.

Curtis Banks received the completed forms from Fidelity on 20 February but had to ask the complainant to resend the discharge form because the member declaration on the original was spoiled.

Curtis Banks received the new form on 25 February and sent Fidelity the £190,701 transfer payment the following day. Fidelity received it on 2 March.

Both Curtis Banks and Fidelity accepted that taking three months to complete Mr Y’s transfer was too long and that their actions played a part in the delay.

Curtis Banks said if the transfer process was not delayed it could have been completed by 29 December 2014 and the complainant therefore suffered a financial loss of £13,917.06, calculated as at 14 November 2016.

Fidelity did not accept the initial opinion of the TPO adjudicator so it was passed to the ombudsman, who upheld that decision.

Deputy pensions ombudsman Karen Johnston says in her decision that Curtis Banks was responsible for the first period of delay and Fidelity for the second.

She says: “The initial period of delay was due in my view to Curtis Banks recording the transaction as in progress when it was not, and then losing track of it. They explained that because the initial input to Origo was made in error, they were not aware of the 10-day timeframe for response in this particular instance. Therefore, they were unaware of the outstanding issue until Fidelity contacted them on 9 January. I conclude that Curtis Banks should have had checks in place, which in this particular case they did not.”

Johnston adds: “I can see no reason to hold Fidelity responsible for that oversight because the remedy was always within Curtis Banks’ control. The argument that Fidelity should have chased Curtis Banks earlier during the first period of delay, could equally well apply in reverse to limit Fidelity’s liability during the second. In the circumstances I consider that each party should bear responsibility for the period of delay which occurred while an outstanding task was actually in their hands and within their control.”



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There are 2 comments at the moment, we would love to hear your opinion too.

  1. A great example of why the industry wide initiative on “Improving Pension and Investment Transfers and Re-registrations” is so urgently needed. The consultation on the proposals closes on 31 January 2017.

  2. Presumably the compensation that’s being proposed is being treated as a third-party contribution and the client has earnings which would justify that level of contribution (including any others made {and to be made} this tax year). Similarly he must have available annual allowance and must not have certain forms of lifetime allowance which would mean loss of that protection if a contribution is made

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