Key Dates

Determination PO-22236 issued on 29 July 2019.

Summary

Ms N applied to transfer her personal pension fund to a Canadian pension scheme (the "receiving scheme") which, at the time of her application, was a qualifying recognised overseas pension scheme (QROPS). However, the personal pension provider delayed in implementing the transfer and, in this time, the Canadian scheme was removed from HMRC's QROPS list. 

There was also no other Canadian scheme listed as a QROPS at the time Ms N's complaint was considered by the Pensions Ombudsman. The rules of the personal pension scheme did not give a member a right to an unauthorised payment and there was no provision in the rules allowing the provider discretion to make unauthorised payments.

The Ombudsman found that the provider's delay amounted to negligent administration which had caused Ms N loss. When considering the compensation to be awarded, the Ombudsman noted that:

• the provider had no power to effect a transfer to the receiving scheme;
• the Ombudsman had power under section 151(2) Pension Schemes Act 1993 to direct the provider to transfer Ms N's funds from the scheme; and
• a transfer to the receiving scheme in accordance with the Ombudsman's direction would not be scheme chargeable for the purposes of the Finance Act 2004 but would cause Ms N to become liable for an unauthorised payments charge.

The Ombudsman directed the provider:

• to pay a transfer of the equivalent amount in Canadian dollars of the value of Ms N's fund at the time the transfer should have taken place (the "transfer date") to:
• the receiving scheme, if it accepted the transfer; or
• if the receiving scheme refused to accept the transfer, to another scheme of Ms N's choosing which was either a registered scheme under Finance Act 2004 or which had been a QROPS at the transfer date;
• to pay HMRC an amount to cover any tax charge arising under the Finance Act 2004 in consequence of the transfer;
• if the provider was not able to effect the transfer from the personal pension scheme, to pay the transfer from its own funds, in which case:
• the provider must also cover any tax charge arising from the making of an unauthorised payment; and
• the provider would then no longer be liable to Ms N for any of the value of her fund within the personal pension scheme;
• if Ms N provided evidence of any investment gain she would have made had her funds been transferred on the transfer date:
• to pay an equivalent amount to the receiving scheme, if it accepted the payment or, if not, to a scheme of Ms N's choosing; and
• to pay HMRC any amount necessary to cover any tax charge arising from this payment;
• to increase Ms N's award for distress and inconvenience to £1,000; and
• in the event that these redress arrangements prove unworkable, to refer the matter back to the Ombudsman promptly for further directions.

Date Accessed: 28/05/2022