Where a provider cannot meet this timeframe, the ombudsman stated that he would expect it to consider suspending transfers until changes to its processes and member communications could be sought.
Ombudsman tightens timeframe
According to Herbert Smith FreeHills, the decision signals a significant tightening of the timeframe within which pension providers, schemes and administrators might be expected to update their processes in response to new regulatory guidance relating to scams and transfers.
The law firm explained that although the timeframe of one month was not significant in the context of this complaint, it might be relevant for others relating to transfers made shortly after February 2013, when the new pension scams leaflet was introduced.
“This decision also highlights the need for pension providers, schemes and administrators to ensure that they have effective systems in place to identify and respond to future regulatory guidance in this area, Herbert Smith FreeHills added.
Tim Smith, professional support lawyer at Herbert Smith FreeHills, said the new one-month deadline was “a significant shortening of the timetable”.
He said: “Previously, providers may have thought that they were in the clear because they had three months to make changes, whereas this recent determination suggests that if they made a transfer outside of that one-month window, that might be at potential risk of a successful claim from a member.”
Smith noted that going forward, providers will need to pick up the new scams regulatory guidance “very quickly, and also decide how to respond to it and implement those changes within a matter of weeks of the guidance being updated”.
Margaret Snowdon, chairwoman of the Pension Scams Industry Group, is not concerned about the new timetable, since “there is no hard and fast rule” from the Pensions Ombudsman.
However, she added: “Where a regulatory change has been well-trailed and reflects existing good practice, you would expect administrators to update their practices fairly swiftly.”
Rolhat Zen-Aloush is a reporter at FTAdviser's sister publication Pensions Expert
