Pensions Ombudsman anticipates caseload rise

Influenced by the current spirit of austerity, the Pensions Ombudsman said in its 2011/12 business plan that it would set aside some of its larger aspirations in favour of getting the core work done with "the resources available". Reporting in the ombudsman's report and accounts, Tony King, the present incumbent, reports that his office has actually exceeded most of its goals, with higher output than the previous 12-month period, "remarkably", without using all of the resources available, and under-spending the ombudsman budget for the second year running.

On this page:
New enquiries and investigations
Main topics for complaints
Resolving cases
Pension Protection Fund sees reduced casework
Table 1: Number of completed complaints, by subject
Unacceptable delay leads to financial loss.

Although the Pensions Ombudsman's caseload has settled over the past two or three years at more than 900 new investigations per year, he expects this to increase over the longer term, with automatic enrolment eventually bringing many more people into pension scheme membership. This is likely to take time, however, as changes to the ombudsman's workload tend to lag significantly behind industry changes.

New enquiries and investigations

The Pensions Ombudsman received 3,728 new enquiries during 2011/12. This was in addition to 204 outstanding from the previous year. Around a quarter of these (939) were accepted for investigation, 835 were referred to The Pensions Advisory Service, and the rest were either referred back to the scheme's internal dispute procedure or not continued with for some other reason.

By the end of 2011/12, 888 investigations were completed - 369 dealt with solely by the ombudsman's investigators, 367 informal ombudsman decisions (where the investigator's conclusion is backed up by a letter from the ombudsman) and 152 formal determinations.

Main topics for complaints

Transfer issues and entitlement to an ill-health pension continue to make up a significant part of the Pensions Ombudsman's complaints workload - accounting for 20% of all closed investigations in 2011/12 (see table).

As the ombudsman points out, more than half the complaints received did not fit into any of the subject matter categories, and were therefore marked "other". He claims that during 2012/13 the current management information system will be replaced, making future feedback on complaints more meaningful.

Resolving cases

An increasing number of cases are resolved without the need for a formal determination by the ombudsman as all parties agree on the outcome. For instance, in a case involving a council worker, the ombudsman concluded that the council's rejection of his application for early ill-health retirement was based on insufficient evidence. Both the complainant and the council agreed that the council would reconsider the case after obtaining further medical advice.

A number of cases involve delays, where applicants say they have suffered financial loss directly arising from this. If the ombudsman finds that there has been unacceptable delay leading to maladministration, he will seek to put the complainants back in the position they would have been in, but for the delay. The issue often arises in transfer cases. The accompanying example concerns a case where a transferring scheme's administrators took 33 weeks to provide transfer information.

Pension Protection Fund sees reduced casework

The report also reviews the casework of the Pension Protection Fund Ombudsman, which has seen a significant reduction in new cases - down from 41 in 2010/11 to 24 in 2011/12. The fall is attributed to a reduction in levy-related referrals. As very few of these were upheld in previous years, it may be that schemes and advisers have a better feel for what is, and what is not, likely to succeed, the report concludes.

Unacceptable delay leads to financial loss

The Pension Ombudsman's annual report stated that:

"Mr C complained that there was an unnecessary delay in transferring his pension rights between his former employer's scheme and his new employer's scheme.

"The transferring scheme's administrators took 33 weeks to provide transfer information following a request from the receiving scheme's administrators. By the time Mr C had accepted the transfer value and it had been paid to the receiving scheme, his pensionable salary had increased and the additional service he was credited with was less than previously quoted.

"Before Mr C complained to the ombudsman, the transferring scheme's administrators had said they wished to settle his complaint. However, they had been unable to agree on the level of compensation.

"The ombudsman's preliminary view was that if the transferring scheme's administrators had provided the transfer information within a shorter, more reasonable timeframe, Mr C would have secured more service in the receiving scheme. The ombudsman indicated that he would direct the transferring scheme's administrators to pay the cost of securing the difference in the service credited in the receiving scheme.

"When they received the ombudsman's preliminary view, the transferring scheme's administrators made Mr C a further offer on condition that he withdraw his complaint. Mr C wished to accept this offer and applied to the ombudsman to withdraw his complaint. The ombudsman consented."