66: Top tips for avoiding the Pensions Ombudsman

The Pensions Ombudsman has outlined its views on best practice for communicating with pension scheme members, based on the experience and expertise it has built up over 30 years. The guidance note has been produced in response to its November 2020 stakeholder survey which found that stakeholders would like more guidance materials to be provided on its website.

The two page document sets out some top tips on how to avoid the Ombudsman, which emphasise the importance of effective and clear communication, ensuring a shared understanding of the complaint and the outcome members want and managing member expectations. It also notes that failure to comply with legal requirements can lead to complaints.

It also directs readers to a new section on the Ombudsman’s website called ‘How to avoid the Ombudsman’. This contains guidance on common areas of complaints such as ill health pensions, unpaid pension contributions and death benefits as well as information on the scope of the Ombudsman’s distress and inconvenience awards and the role of the early resolution service which seeks to resolve matters informally, based on the consent and cooperation of the parties.

Each section of the website contains guidance on how the Ombudsman may approach a complaint, with answers to some frequently asked questions and links to relevant publications, determinations and case studies which the Ombudsman suggests may help trustees to resolve complaints without the need for a formal referral to the Ombudsman.

Comment

Schemes will need to complete the internal dispute resolution procedure (IDRP) before a formal application can be made to the Ombudsman. The IDRP represents a real opportunity for trustees and other scheme managers to resolve a complaint without escalating costs – both management time costs and professional adviser fees – and the guidance provides resources that will be helpful for trustees seeking to make the best use of that process. It also serves as a helpful reminder of the importance of clarity of thought and communication in resolving disputes as well as a proper understanding of legal obligations, both in respect of the provision of benefit and the remedies available.

If the IDRP does not resolve the dispute and the early resolution service is not appropriate, applications to the Ombudsman must usually be made within 3 years of the relevant act or omission and when the Ombudsman issues a determination, he may direct the scheme trustees (or other responsible person) to take certain steps to put the matter right or refrain from taking steps, order the payment of compensation for loss, make a financial award for distress or inconvenience and award costs and expenses. The Ombudsman’s determination is final and binding on both parties, although if those parties want to appeal on points of law or questions of fact, they can lodge an appeal with the High Court (in England) within 21 days of the determination.