Makevine Executive Pension Plan · CAS-40641-W0B9

CAS-40641-W0B9

Ombudsman’s Determination Applicant Mr R

Scheme The Makevine Executive Pension Plan (the Plan)

Respondent Prudential Assurance Limited (Prudential)

Outcome

Complaint summary

Background information, including submissions from the parties

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 A transfer authority form to be signed by the member and the employer in its capacity as Trustee of the Plan. Two signatures were required on behalf of the employer.

 A receiving scheme declaration to be completed and signed on behalf of the receiving scheme.

“At the time bonuses are reviewed, there is usually a change in the overall value of the With-Profits account and values can fall as well as rise at such times, possibly by a significant amount. In 2019 new bonus rates for this contract are scheduled to come into effect on 1st March.

Final Bonus, which is only applied at the time benefits become payable, may vary and is not guaranteed.”

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 It was not able to uphold the complaint as the transfer values previously quoted were never guaranteed.

 Even if it had been possible for it to use Origo to complete the transfer, it had five working days to settle the claim. So, it would have still been settled in March.

 It apologised for not acknowledging and responding to Mr R’s complaint earlier.

 A £100 payment was being sent to Mr R in respect of the inconvenience and frustration caused by the delay.

 EPP policies could not be transferred electronically via Origo for a number of reasons. These included a need to take steps to ensure that any Protected Tax- Free Cash entitlement was not lost. It also highlighted the need to obtain the authority of the Trustee and that this required seeing the paperwork to check that more than just the member’s authority had been provided.

3 CAS-40641-W0B9  Royal London could have checked whether it was appropriate to use Origo when requesting the transfer. Origo confirmed what was in scope and EPPs were not in scope.

Summary of Mr R’s position

Prudential could have provided all the relevant forms in advance when it sent him the transfer illustration pack in May 2018.

Prudential’s transfer procedure had not been notified to the Plan’s Trustee.

Prudential did not provide details of the procedure that it had in place to ensure that clients were fully appraised of the implications of bypassing electronic systems.

Prudential should have noticed the significant decrease in his transfer value and alerted him.

4 CAS-40641-W0B9 Summary of Prudential’s position

A further £75 would be sent to Mr R in recognition of the distress and inconvenience caused to him.

Its standard Service Level Agreement (SLA) for all processes was five working days unless a longer SLA had been indicated in periods when it was dealing with a backlog.

Adjudicator’s Opinion

 The Adjudicator noted that the transfer value quotations issued by Prudential stated that the figures were not guaranteed.

 He also noted that the first time that Prudential would have been aware of Mr R’s decision to transfer his benefits was on 26 February 2019. This was when Royal London applied to it for the transfer of his benefits using Origo.

 Prudential’s SLA was five working days from the point of receiving the initial transfer request to the payment of the transfer value. The Adjudicator was of the view that this SLA was not unreasonable for a transaction of this type. He was satisfied that, discounting the time when Prudential was waiting on others for information, it completed the transfer within its SLA.

 The Adjudicator was of the opinion that Prudential was not at fault for the transfer not having completed before the change in its bonus rates on 1 March 2019. The Adjudicator noted that it was unfortunate timing that the transfer was requested shortly before the revised bonus rates came into effect. However, he said there was no evidence that either Mr R or his IFA communicated to Prudential in advance the need for the transfer to take place before the new bonus rates came into effect.

5 CAS-40641-W0B9  The Adjudicator noted that there were opportunities available to reduce the time that the transfer took. These included the provision of the discharge forms with the original quotations and the use of email when issuing discharge forms. However, he noted that Prudential followed its standard procedures and, in the Adjudicator’s view, these procedures were not unreasonable.

 The Adjudicator was satisfied that there was no legal requirement for Prudential to warn members of the impact that imminent changes in terminal bonus rates would have on their benefits.

 Prudential acknowledged the delay in it providing a response to the Trustee’s complaint of 7 May 2019 and also the incomplete nature of its responses. The Adjudicator noted that Prudential had made distress and inconvenience awards to Mr R in acknowledgement of these issues. In the Adjudicator’s opinion, this was adequate redress.

 The Adjudicator’s Opinion reflected the thoughts of someone who was comfortable with the traditional operations, processes and service levels of the pensions industry.

 The pensions industry was behind the times due to its legacy systems and processes. It could change more quickly but it needed to be made to do this. The member experience should be considered in the context of reform within the industry. For example, Prudential could easily provide a price guarantee to the member during the transfer process.

 The £175 paid by Prudential did not adequately reflect the distress and inconvenience experienced by him and the IFA. They suffered months of frustration trying to get Prudential to engage with them. The IFA had difficulty getting anyone to speak to him before and during the transfer.

 Prudential’s processes were not proactive and delayed the transfer.

Ombudsman’s decision

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I do not uphold Mr R’s complaint.

Anthony Arter

Pensions Ombudsman 13 August 2021

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