In his determination in the case of Mr N (PO-10832) the Ombudsman has ordered the provider of a personal pension scheme to pay compensation to a member after it refused to action the member's transfer request for a year because the member's trustee in bankruptcy had requested that no transfer was made.


The failure to make the transfer meant that the member's fund was held in cash for much longer than the member had intended and so missed out on investment returns. The member's trustee in bankruptcy had accepted that the member's fund did not form part of his estate for bankruptcy purposes, but had asked the scheme provider not to make the transfer while it investigated whether the member had made excessive contributions.

Comment

The facts of this case are unusual. The scheme provider had argued it had reason to be cautious because it was on notice that the member was a convicted fraudster who had previously submitted fraudulent transfer requests. The Ombudsman's determination says that the case has a "long and complex background" but does not set this out. Nevertheless, the determination illustrates that scheme trustees should not delay actioning a transfer value request made by a bankrupt member simply because the member's trustee in bankruptcy asks them to.

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