1: DWP responds to consultation on changes to Pensions Ombudsman’s jurisdiction and dispute resolution functions

On 8 August 2019, the government published its response to the consultation paper, ‘The Pensions Ombudsman: dispute resolution provisions and widening of jurisdiction’. This consultation set out proposals for the transfer of dispute resolution functions from The Pensions Advisory Service to The Pensions Ombudsman (TPO). TPO has already set up its Early Resolution Service, which aims to resolve straightforward complaints centrally, quickly and informally, and therefore more cost effectively. The consultation also proposed widening TPO’s jurisdiction to allow employers with a group personal pension (GPP) arrangement to make complaints or refer disputes on their own behalf against the person responsible for the scheme’s management.

Key points made in the consultation response include:

• TPO will offer conciliation as early as possible. This may involve, for example, giving a steer on the position, facilitating settlement discussions or assisting an applicant to make a complaint through a scheme’s internal dispute resolution process (IDRP) if necessary. The government’s response stresses that TPO will remain impartial throughout this process;
• since this is an informal process, any settlement reached will not have a specific legal status. The parties will need to decide how to formalise and enforce any agreement;
• if no settlement is reached, the parties will still have access to TPO’s more formal investigation and determination process, involving different staff to ensure no conflict of interest;
• TPO’s dispute resolution services will also be available at any stage of a scheme’s IDRP;
• TPO is in the process of introducing a new case management system and is looking at practical ways to streamline the process for users, such as clearer signposting, and creating an online dashboard and documents portal; and
• employers will now be allowed to bring a claim against the provider or administrator of their GPP on behalf of themselves, rather than only in respect of an individual member. However, TPO will not consider any contractual or commercial arrangements in place between the employer and the GPP provider. Signposting for this widened jurisdiction will also be improved.

The government has confirmed that most of the formal written responses from pensions professionals to the consultation were positive, and that legislation to provide a framework for the proposals will be brought forward in due course. Any amendments to signposting requirements will need to be set out in new regulations following further discussions with the Financial Conduct Authority. However, no timescale has been given for these legislative changes.

Government response

The government supports an early resolution function which is able to offer conciliation at the earliest possible juncture. However, the government’s intention is not to formalise any agreement reached during this process but rather enable parties involved to enter into their own settlement which could be enforced by other means, such as court proceedings for a breach of contract.

Where parties cannot reach a settlement, the government supports that they should have the option to choose to go down the formal investigation and determination route, providing the complainant confirms their wish to proceed with their dispute.

Although the government considers that any early resolution process should be available at any stage of the IDRP process, it is not their intention to undermine the IDRP. The government is willing to consider some flexibility only in the event that all parties are in agreement to bypass the IDRP and they would ensure that all parties are continually kept informed throughout the process.

The government recognises the need to ensure the early resolution service is running as smoothly as possible for users and that they will continue working with the TPO to see how signposting can be best improved.

The government is keen to ensure that employers are able to bring disputes of law or complaints relating to maladministration of GPPs on behalf of themselves to TPO. However, they recognise that there may be some overlap between what should fall within the TPO’s and the Financial Ombudsman Service’s jurisdiction. In response, they have committed to collaborate with HM Treasury and the Financial Conduct Authority to ensure that the best interest of the parties will continue to be met.