The client complained that UK-based Capita Employee Benefits, previously called Bluefin, had caused a £30,314 loss as a consequence of the company’s delays and poor administration when transferring his pension to a Guernsey-based qualifying recognised overseas pension scheme (QROPS).
It emerged in April 2012 that HMRC was prohibiting Guernsey-based pension schemes from being QROPS. Any transfer after that date would have been deemed an unauthorised payment by HMRC and thus be subject to significant tax charges.
The client, David Brackley, argued that his pension transfer was “unreasonably delayed” and that Capita had failed to complete the process before HMRC delisted the Guernsey-based QROPS.
He claimed that if Bluefin had acted in accordance with its obligations, the transfer would have been completed before HMRC delisted the QROPS.
The POS concluded, however, that Capita was justified in its reasoning behind the delays.
Valid reasons
Brackley said he had been “financially penalised” because the setbacks allegedly caused a fall in his pension transfer value and also meant he had to pay income tax on his pension benefits.
According to Brackley, Bluefin should have provided a cash equivalent transfer value (CETV) quotation within three months of his request on 20 June 2011, and said there was “no reason” why it should have been delayed beyond six months.
However, Capita argued that there were “valid reasons” for the delays, naming two factors which meant CETVs were temporarily put on hold:
- Firstly, the trustees of the Bourse Retirement Trust Scheme – which Brackley was transferring into – started a guaranteed minimum pension (GMP) reconciliation exercise just before the transfer. Deed member benefits also needed to be recalculated to ensure records accurately reflected the benefits members were entitled to.
- Secondly, there was allegedly a “lack of clarity” around whether the consumer price index or retail price index revaluation should apply to members’ benefits. This was not clarified until January 2012.
Maladministration
The POS agreed with Capita, and said Bluefin’s failure to keep Brackley updated about the delay was “maladministration”.
“Nevertheless, Bluefin should not be required to compensate Mr Brackley for their maladministration as it has not caused him any injustice,” it said.
“[The delay] was justified because had Bluefin not delayed the statement of entitlement produced may have contained an incorrect CETV figure.”
