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Issues arising where member realises implications of switch to DC

United Kingdom
11/07/2007
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Reference: Q00857

The member complained that he had been improperly encouraged, in 1997, to switch from his employer’s DB section to its newly set up DC section. The Deputy Ombudsman held that while some of the company’s literature “could be viewed as unduly enthusiastic about the DC section”, it was clear that overall the literature was detailed and balanced and made potential risks clear. It also offered access to independent financial advice, which was taken up by the member at the time. The complaint was therefore not upheld.



However, the Deputy Ombudsman took a broad view of his powers to admit complaints “out of time” in these circumstances, saying that although the advice was taken and decision made in 1997, the member had only become aware of possible grounds for complaint following statements in a pension newsletter of June 2004, together with “subsequent media coverage”. He would therefore use his discretion to accept the application outside the normal three year cut-off, as it was reasonable in these circumstances for it not to have been made sooner: “Until Mr Seymour became aware of the consequences of having switched he had no reason to complain”“That is not part of the statutory test governing my jurisdiction, and in any event does not seem to have caused the respondents any difficulty”. He rejected arguments made by the trustees that reopening matters after the passage of a number of years might cause injustice to them given significant changes to the trustee board, and a company merger, since then. .


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