Dixons Carphone Group Pension Plan · CAS-91762-H9V9

CAS-91762-H9V9

Ombudsman’s Determination Applicant Mr D

Scheme The Dixons Carphone Group Pension Plan (the Plan)

Respondent Legal & General (the Administrator)

Outcome

Complaint summary

Background information, including submissions from the parties The sequence of events is not in dispute, so I have only set out the salient points. I acknowledge there were other exchanges of information between all the parties.

Mr D was an active member of the Plan until May 2022.

In early 2022 Mr D says he had become concerned with some aspects of the Plan’s administration. He was also concerned about the uncertain financial climate, so he wanted to transfer out of the Plan and leave the value “in a cash account due to the volatility of the market, not invested…”.

On 7 April 2022, Mr D informed the Administrator that he wanted to transfer his benefits out of the Plan. The Administrator could not progress this request as Mr D was an active member of the Plan at the time and active members could not transfer out. The Administrator informed Mr D of this by email on 11 April 2022 and 14 April 2022.

On 16 May 2022, the Administrator chased Mr D’s employer (the Employer) to say the transfer was still outstanding and could not proceed until Mr D left the Plan.

On the same day, the Employer confirmed that Mr D would be “made a leaver on that month’s file”. CAS-91762-H9V9 On 25 May 2022, the Administrator was notified that Mr D had left the Plan and his last contribution into the Plan was made on 24 May 2022. The Administrator updated its systems to reflect this the following day.

On 6 June 2022, the Administrator disinvested Mr D’s benefits using backdated unit prices to 26 May 2022 and made the transfer payment of £575,297.28 via the Origo platform. It emailed Mr D to confirm that the transfer payment had been made and the amount.

On the same day, Mr D called the Administrator (the Call). He was unhappy with the length of time the transfer took and was concerned that the transfer payment quoted in the Administrator’s email differed to the amount quoted on the Online Member Portal (the Portal) that day, £584,822. This was a difference of approximately £9,525.00 which Mr D wanted to be reimbursed for.

During the Call, the Administrator’s representative explained broadly that the Administrator used the unit price on the second working day following any transfer request as the effective date for a transfer. However, it did not explain that the unit prices were to be backdated. The representative also incorrectly implied that there had been a system issue which may have delayed the disinvestment and subsequent transfer payment.

On 9 June 2022, the Administrator explained to Mr D that the final Plan contribution was received on 24 May 2022, so it used the unit price as at 26 May 2022 to value his transfer. This was in line with its standard process to ensure members were not unduly disadvantaged by market movement or delays with disinvestment/payment. Mr D says he had not been made aware of this process before he elected to transfer.

On the same day Mr D emailed the Administrator and asked for evidence showing when the Administrator had disinvested his funds and what actions it had taken.

On 21 June 2022, the Administrator responded to Mr D’s email of 9 June 2022. It confirmed the value of his Plan on 25 May 2022 and its value on 5 April 2022. The Administrator explained that its systems did not allow a breakdown of the different unit prices. In response, Mr D set out his concerns and argued that the Administrator had breached several of the “FCA Principles” setting out how an organisation should act.

Mr D subsequently raised a formal complaint under the Administrator’s internal dispute resolution procedure (IDRP). However, the matter remained unresolved after both Stage 1 and Stage 2 of the IDRP. Mr D subsequently brought the complaint to The Pensions Ombudsman (TPO).

Following the complaint being referred to TPO, Mr D and the Administrator made the following submissions.

2 CAS-91762-H9V9 Summary of Mr D’s Position Once the transfer was completed, he queried the transfer amount as it differed to the figure shown on the Portal. During the Call he was advised of the Administrator’s disinvestment and transfer process. He says this was the first time this process was explained to him and he had not received any written communication explaining it.

He was concerned at the time taken to disinvest his funds “as the timescales coincided with the Jubilee bank holidays meaning no business could have been done from Thursday 2 June 2022”. He concluded from this that the transfer was undertaken at the Administrator’s “convenience” and not with his best interests in mind.

When he queried the dates on which relevant steps were taken, he was told “that no data is available of the date of de investment, somewhat conveniently only the value which isn’t what I would expect of a well-regarded financial institution who “Treat their customer fairly””.

During the Call, the Administrator informed him that a system issue around the time of his transfer may have negatively impacted him.

He is unhappy that the Portal showed a higher transfer figure. He expects that a business of the Administrator’s size should be able to manage the information it makes available to its customers.

The Administrator has breached points “1,6 and 7 of the pillars of the FCA (Principles)” in regard to the specific points below:

23.1. He was not informed of the Administrator’s disinvestment policy which he feels would clearly have been a key factor in his decision making process given the economic climate at the time.

23.2. The Jubilee bank holidays have had a negative influence on the value of the transfer.

The Administrator was unable to provide him with the date and time his “investments were sold” despite him requesting this information. Directly contravening points 1, 3, 6, 7, 9 and 10 of the FCA Principles.

24.1. Numerous occasions when emails were not responded to and call backs not made/received.

To resolve this issue, he would like the Administrator to “repay the disputed figure of £9,525”.

Summary of the Administrator’s Position The Administrator acknowledges that some aspects of its service could have been better and apologised for the frustration this caused Mr D. An offer of £100 redress for his “trouble and upset” was appropriate. 3 CAS-91762-H9V9 It was initially unable to action his transfer request until he left the Plan and his last contribution had been collected.

On 25 May 2022, the Employer confirmed Mr D had left the Plan the previous day. So, when the transfer was processed the Administrator backdated the effective date to the earliest date possible and used the unit prices from that date (26 May 2022). This was to ensure he did not suffer a financial loss due to delays.

It confirmed the following fund name, unit price, unit number and value amount for the day the transfer was effective from, 26 May 2022.

Fund Unit price (P) Units Value NTW3 201.08 23,832.44 £47,922.28 BM03 1474.45 9,703.64 £143,075.45 NTW3 201.08 191,117.73 £384,299.55

Although the Administrator backdated the transfer to 26 May 2022, it did not disinvest the funds until 6 June 2022. This is why Mr D could see a “live” value on the Portal on 6 June 2022. This should have been explained to Mr D when he contacted the Administrator.

The Administrator applies its business timescale of “T+2” when processing transfer requests from Plan members. This means that if a transfer instruction is received before 4pm, it disinvests the funds two working days after the transfer request. This ensures each Plan member is treated fairly while also:

“…maintaining appropriate levels of liquidity in the Plan, enabling the right to delay encashment during significant market events, minimising the risk of any significant distortions or deviation for funds tracking a quoted index, aligning each transaction to the true underlying value of each policyholder’s unit holding and allowing us [the Administrator] to efficiently manage trading activity.”

Regarding the Jubilee bank holidays:

“There is no trading on bank holidays and the markets are closed, so these days wouldn’t have affected your investments. The bank holidays had no bearing on the value of your investment because as explained, we backdated to the earliest possible date it could have been processed.”

During the Call, it had implied that a system error had occurred and that it would be investigated. This was incorrect and the Administrator recognised this impacted an “already concerning situation” for Mr D. However, there was no system error when processing the transfer and Mr D is in the correct position.

Despite these service issues, the Administrator did not agree that it processed the transfer incorrectly and did not believe a payment of £9,525.00 was appropriate.

4 CAS-91762-H9V9 Adjudicator’s Opinion

5 CAS-91762-H9V9

Mr D did not accept the Adjudicator’s Opinion, and the complaint was passed to me to consider. Mr D provided further comments which do not change the outcome. I agree with the Adjudicator’s Opinion and note the additional points raised by Mr D for the sake of completeness.

In summary Mr D has said:-

• The Plan was invested in international funds that were not UK based and would have traded over the Jubilee bank holiday. The Opinion and information provided by the Administrator was thus misleading.

• The timing of the transfer was crucial to Mr D considering the effects of the Ukraine war on the investment market. He was not made aware that after his transfer request was received and actioned it was standard business practice that it would take two working days to disinvestment his investments. Had he known he would have made different transfer decisions. At no point prior to the transfer did the Administrator communicate to him what the standard practice was regarding disinvestment. This was not mentioned in the supporting documentation or the Administrators numerous communications.

• As he was unaware of the standard practice, Mr D was disadvantaged. Further, the funds being disinvested on 26 May 2022, two working days later, allowed the non-UK investments were able to fluctuate over 4 trading days (the bank holiday). Hence the standard practice is not fit for purpose, and the fluctuation resulted in him being disadvantaged by roughly 2% of his pension. Because of the importance of the decision, members should be adequately informed of the standard practice.

• He was not informed that the figures in the Portal could change during transfers. There was no warning on the Portal or any of the transfer documentation to inform him. The £9,500 difference is a significant amount to him and his family.

• The Administrator offered him a goodwill gesture of £100, which was inadequate considering the unnecessary length of time spent resolving his complaint. The transfer process was not communicated to him, nor was his view as the customer considered. He was not provided the essential information needed for him to make a fully informed decision about his benefits.

6 CAS-91762-H9V9 • He has a stretched Aorta at a dangerous level, hence the stress and anxiety involved in pursing his complaint against the Administrator has put his health at risk.

• The Administrator should implement actions to prevent this issue reoccurring.

Ombudsman’s decision

Camilla Barry

Deputy Pensions Ombudsman 30 March 2026

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