The Pensions Ombudsman has ruled in favour of the trustees of the Standard Life staff pension scheme in a complaint about cash equivalent transfer values.
The complainant, Mr Y, complained about the trustee’s refusal to issue him with a second cash equivalent transfer value within 12 months’ of a previous request, despite him offering to pay for it.
Mr Y said that by the time he was offered a second CETV, the transfer value had significantly dropped.
A tale of two transfer values
On 29 August 2016, Mr Y got a CETV that would expire on 14 November of that year. The transfer value was £99,612.44.
The cover letter that accompanied the CETV explained that the guaranteed amount would be lost if administrator Mercer did not receive a written application to transfer by 14 November. The letter said, if this was the case, Mr Y would not be able to apply for another transfer value until 15 August 2017.
Mr Y later said that he thought the fact another transfer value would not be issued for 12 months only related to free valuations.
In September 2016 Mr Y used the self-service online portal to get a new transfer value quote. The portal gave an increased estimated value of £114,396.
After receiving the online quote, Mr Y contacted Mercer and asked for a second CETV. Mercer told him the scheme policy was to only issue one CETV in 12 months. According to Mr Y, Mercer said that policy was new and was introduced in July 2016.
In October 2016, My Y complained through the scheme’s internal process that a refusal to allow members to buy additional CETVs was an “unfair restriction”.
Later that month, the trustees told all of the scheme’s deferred members that it had agreed to implement a “transfer amnesty” and that an additional CETV would be offered to members who had not “appreciated” the policy of giving one CETV every 12 months.
The Trustees responded to Mr Y’s complaint that the scheme policy had not changed.
Mr Y appealed the decision through the second stage of the internal complaints process, reiterating that he had been told the policy had been changed. He said if there was no policy change then there would have been no need for a transfer amnesty and that offer was likely a result of his complaint.
In February 2017 the trustees issued their final response to Mr Y’s complaint stating again the rule outlined in the scheme policy and saying the cannot be held accountable for changing market conditions that impact transfer values.
In March 2017 Mr Y generated another CETV quote through the online portal. The estimated transfer value was £108,089.
He complained to The Pensions Ombudsman saying that he declined to request a second CETV because his transfer value had reduced. He said it was only fair the trustees honour the higher online estimate from September 2016.
Complaint not upheld
A TPO adjudicator initially decided there should be no further action from the trustees but Mr Y did not accept this, so the complaint was passed to an ombudsman.
Deputy pensions ombudsman Karen Johnston says: “I do not agree that the online quotation of £114,396, generated on 28 September 2016, should be honoured. Having adopted the policy of permitting a transfer amnesty the trustees were bound to apply it fairly to all members who wanted to access it. The policy did not provide for backdating of CETVs.”
Johnston says: “The only transfer values that are actually guaranteed are those contained in a statement of entitlement issued by the trustees. There is no basis on which Mr Y is entitled to demand a transfer to be settled on the basis of the figures quoted in illustrations he obtained via the portal. It was not maladministration for the trustees to refuse to do that.”
She adds: “Given the circumstances, I am unable to conclude that the trustees’ refusal to allow Mr Y a new CETV, outside the transfer amnesty, was perverse or outside the range of reasonable outcomes that could have been reached. Therefore, I do not uphold Mr Y’s complaint.”