dispute resolution – pensions and financial (84)
by Roderick Ramage, solicitor, www.law-office.co.uk
first published by distribution to professional contacts on 22 April 2022
DISCLAIMER
This article is not advice to any person and may not be taken as a definitive statement of the law in general or in any particular case. The author does not accept any responsibility for anything that any person does or does not do as a result of reading it.
A pension
scheme member, dependant or personal representative has, short of litigation, two
main routes to obtain, or at least seek, a remedy. One is to the Pensions Ombudsman and the
other to the Financial Ombudsman Service (TPO or FAS), between whose respective
jurisdictions is a degree of confusing overlap – a reminder that pension are more
about money that trust law and tax and the legislators’ aims are seldom straightforward
or clearly and consistently expressed.
the pensions route
The requirement
for the trustees or managers of an occupational pension scheme to make arrangement
for the resolution of disagreements in relation to the scheme was introduced by
the Pensions Act 1995, s50. The original
s50 has been repealed and the requirement is now in s50, s50A and s50B of the
PA 1995 as inserted by s273 of the PA 2004 (as amended by s16 of the PA 2007)
and the Occupational Pension Schemes (Internal Dispute Resolution
Procedures Consequential and Miscellaneous Amendments) Regulations 2008, SI
2008/649. IDRP is the common shorthand
for an internal dispute resolution procedure
The trustees
or managers of pension schemes must secure make and implement arrangements for the resolution of pension disputes between
the trustees one or more persons with an interest in the scheme about matters
relating to the scheme. The arrangements
must provide for any of the parties to apply for a decision to be taken on the
matters in dispute and for the trustees to take that decision.
The
arrangements may provide (a) that an application may not be made to the
trustees, unless it has been previously referred to a “specified person” who
has given his or her decision on the matter, and (b) that the decision is confirmed
or replaced by the decision taken by the trustees after reconsidering it. The decision, both by the trustees and, if
applicable, the specified person, must be made and notified to the applicant
within a reasonable period.
The requirement
does not apply if every member of the scheme is a trustee of the scheme or a
director or its corporate sole trustee, or if the scheme has only one member,
or if the dispute is in connection with specified disputes in connection with
the Police and Firefighters’ schemes or of proceeding have been commenced in
any court or tribunal of if TPO has commenced an investigation.
By the
Personal and Occupational Pension Schemes (Pensions Ombudsman) Regulations
1996, SI 1996/2476, reg 3, TPO shall not investigate
or determine a complaint unless written notice of a decision in respect of it has
first been issued by the trustees under s50 of the PA 2005. TPO may however act if he is satisfied that there
is no real prosect of a notice being issued within a reasonable period and it
is reasonable that he should do so.
On 1 April 2018 the dispute resolution service operated
by TPAS (the Pensions Advisory Service) was transferred to TPO, with the
expectation at the time that complaint resolution times would halve to just
over five months. TPAS’s former service
is now named the Early Resolution Service (ERS), the purpose of which “is to provide an informal and streamlined approach to dispute
resolution”. The ERS may be used before
the scheme’s IRDP has been completed if the complaint has at least been raised
with it.
the financial route
Rules made by the Financial Conduct Authority (FCA) are
made by rulemaking instruments under s138G of the Financial Services and
Markets Act 2000 (FSMA 2000). At
www.handbook.fca.org.uk the FCA describes the FCA Handbook by stating that it “contains the complete record of FCA Legal Instruments
and present changes made in a single, consolidated view”. Disputes about financial services are dealt
with in the “Redress” block of the FCA Handbook. The (financial) ombudsman scheme was
established by the FSMA 2000, Part XVI (s225 to s234B), and details of its operation
are in the Redress block of the FCA Handbook, sections DISP 2 and DISP 3.
overlap of jurisdiction
A memorandum of understanding signed on 1 December 2017 by
the Pensions Ombudsman and the Financial Ombudsman Service recognises their
different remits and provides for the handling of complaints and disputes where
there is a potential overlap of jurisdiction.
The scope and overlap of their respective jurisdictions are summarised
in paras 6, 8 and 9, as follows, and illustrative examples of the types of
complaint each ombudsman can consider are in an appendix.
6. The
Pensions Ombudsman deals with matters which concern the administration (including
transfers/conversion) and/or management of occupational and personal pension
schemes.
8. The
Financial Ombudsman Service deals with matters which predominantly concern advice
in respect of the sale or marketing of Individual pension arrangements.
9. The
Financial Ombudsman Service can also consider complaints about the administration
of personal pensions and group personal pensions (but not complaints about the
administration of occupational schemes). This means there is a jurisdictional overlap
between the two ombudsmen.
END
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