For most people, most of the time, their pension affairs run smoothly. But what do you do when things go wrong? Where do you turn if you think you have been wrongly advised or someone hasn’t administered your pension properly? There is a plethora of ombudsmen and advice bodies, and the purpose of this month’s pension clinic is to tell you where to go for help.
The first and most obvious advice is to give your pension scheme or pension provider the chance to sort things out first. Even if you go straight to another body to complain, they will usually need to satisfy themselves that the provider being complained about has been given a chance to put things right.
You should therefore ask your scheme or pension company for information about its complaints process or what is sometimes called its ‘internal disputes resolution’ process. This will tell you who to complain to and what information they need, and it will usually give you a timetable for dealing with complaints. You will often be asked to supply documentary evidence, so keeping your pensions paperwork safe is always a good idea. It is also worth keeping a log of the dates and times of phone conversations and whom you spoke to.
Take it further
If you get no joy and still feel you have been unfairly treated, you can then take your complaint further. There are (at least) three different ombudsman services, which are there to try to help resolve complaints.
The first is the Financial Ombudsman Service (FOS). The FOS was set up by Parliament and deals with a wide range of financial services issues, covering everything from bank accounts and payment protection insurance disputes to mortgages, pensions and financial advice.
When it decides that someone has been unfairly treated, the FOS has legal powers to impose a settlement. Statistics are published on the number of complaints that have been made to the FOS in respect of different firms, and also on the number of upheld complaints. It would be fair to say that businesses try quite hard to avoid having complaints upheld because it reflects unfavourably on them, so telling your financial institution that you are planning to go to the FOS can often focus its attention.
A second service for consumers is the Pensions Ombudsman. There are slightly grey areas between the FOS and the Pensions Ombudsman, but the main focus of the latter is on problems caused when pension schemes are not administered as they should be. The Pensions Ombudsman is funded by the Department for Work and Pensions, and it also has legal powers to impose resolutions if none can be reached.
Before going directly to the Pensions Ombudsman it is normal to go first to the Pensions Advisory Service (TPAS), which is staffed by a mixture of paid staff and expert volunteers who try to help resolve disputes without involving the Pensions Ombudsman. TPAS is a free service, also funded by the DWP, and it provides a range of information and guidance services as well as dispute resolution. By using TPAS as a filter, the Pensions Ombudsman service can be reserved for the most complex or intractable problems.
A third ombudsman that sometimes hits the headlines is the Parliamentary Ombudsman. This body deals with cases where individuals have suffered loss through ‘maladministration’ by a public body such as a government department or agency. As well as dealing with individual cases, the Parliamentary Ombudsman sometimes identifies issues that have affected very large numbers of people.
One relatively recent example is the regulatory failures that contributed to the problems surrounding Equitable Life. It was in response to a report by the Parliamentary Ombudsman that the government eventually set up a multimillion pound compensation scheme for certain Equitable Life policyholders.
Referrals to the Parliamentary Ombudsman have to be made via an MP – you cannot lodge a case directly. More generally, it is sometimes worth involving an MP in a case if you are struggling to get a proper response from a firm or government agency. While MPs have quite limited powers, the special letterhead they can use and the potential they have to raise issues in Parliament and beyond can sometimes grab the attention of the recipient of a letter in a way that other correspondence sometimes fails to do.
Raising a pensions complaint can be a slow and painful process. But if you have plenty of documentary evidence and can explain the issue clearly, a range of bodies can help you with your case.
Steve Webb is director of policy at Royal London. Read more from Steve Webb's Pension Clinic here.
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