The Ombudsman has found that a complaint made by the beneficiary of a SSAS regarding lack of active investment of scheme founds was out of time.  However, the beneficiary's complaint regarding delays in the transfer value process was upheld (Mrs D PO-26429).

Mrs D had started to receive income drawdown from the SSAS following the death of her husband who had been a member.  A property owned by the SSAS was sold for £1,170,000 in August 2013 and the sale proceeds were paid into a basic current account.  The SSAS trustees initially planned to purchase a new property, but by October 2014 they had not found a property which they considered suitable.  In 2014 the trustees engaged an IFA firm to review the SSAS's investment strategy.  By May 2015, the trustees had been advised by the IFA that it would be difficult for the SSAS to achieve an investment strategy which suited all the members.  At that point the trustees were considering whether the SSAS should continue in its current form, whether two of the members should transfer out, or whether it should be wound up.  They suggested that Mrs D should seek independent financial advice.  The trustees' evidence was that they met with Mrs D during the period June to July 2015 and explained that the funds had not been invested.

By the start of 2016, despite various correspondence between the trustees and the IFA, the funds had still not been invested.  At that point the trustees entered into correspondence with an investment manager and second IFA.  On 31 October 2016 the trustees sought advice from the IFA regarding a potential investment in a 12 month fixed income secured corporate bond, but the IFA advised that he did not recommend this, as he believed investments should be diversified.  Following this there was a period of inaction as the trustees were unsure how to progress matters.  

In 2017 Mrs D instructed her own IFA.  In September 2017 Mrs D requested a transfer value from the SSAS.  There were various delays with the necessary paperwork being completed, caused in part by delays in obtaining signatures of the trustees in relation to the necessary documentation.  On 10 January 2018 the professional trustee notified Mrs D that the transfer had been completed.

In 2019 Mrs D complained to the Ombudsman that she had suffered financial loss due to the trustees' failure to invest the funds following the sale of the property.  She also complained about delay in processing her transfer value.

The Ombudsman found on the balance of probability that Mrs D had been aware of the ongoing failure to invest the funds by around mid-2015 at the latest.  Accordingly he found that he could not consider her complaint, insofar as it related to failure to invest, because it was outside the time limit set by the relevant regulations, which require a dispute to be referred to the Ombudsman within three years of the "events" that gave rise to the complaint.  The Ombudsman did not consider that there were any extenuating circumstances which would warrant him exercising his discretion to investigate the complaint despite it having been made outside the three year time limit.  

The Adjudicator at the Ombudsman's office noted that the average industry standard for dealing with a transfer payment ranges between 10 and 20 days, so found that, even allowing for unforeseen issues such as additional paperwork, two months should have been sufficient.  The trustees accepted the finding regarding the transfer value delay.  The Ombudsman accordingly ordered the SSAS's professional trustee to pay redress for the loss suffered by Mrs D as a result of failure to complete the transfer within two months.  The Ombudsman also awarded Mrs D £500 for distress and inconvenience.

Our thoughts

Where a complaint stems from a failure to act, it may not be obvious when time starts to run for the purpose of calculating any limitation period for bringing the claim.  It is therefore interesting to see the approach which the Ombudsman took in this case.  It is standard for all members of a SSAS to be trustees themselves, making it unlikely that a member will be able to bring a complaint against "the trustees" for their investment decisions (or lack of them).  Although this complaint was found to be out of time, the case is a reminder that a SSAS may have beneficiaries who are not themselves involved in investment decisions.