Royal London Personal Pension Scheme · CAS-102155-R8M7

CAS-102155-R8M7

Ombudsman’s Determination Applicant Mr R

Scheme Royal London Personal Pension Scheme (the Scheme)

Respondent Royal London (RL)

Outcome

Complaint summary

Background information, including submissions from the parties The sequence of events is not in dispute, so I have only set out the main points.

The Scheme was formerly known as The Scottish Life Personal Pension Scheme. It was rebranded as part of the wider transition of Scottish Life products adopting the Royal London name.

Mr GR was a member of the Scheme. Under the Rules of the Scheme (the Scheme Rules), dated November 2006, RL as the administrator of the Scheme has discretion to determine to whom to pay benefits following the death of a member.

On 18 September 2020, Mr GR signed a nomination form which confirmed that he wished for 100% of his Scheme benefits to go to his son, Mr R, in the event of his death.

On the nomination form, Mr GR was given the choice of how benefits would be paid upon his death. Option one was at the discretion of the Scheme administrator, meaning if Mr GR selected this option, RL would consider paying benefits and in what proportions to the potential beneficiaries. Option two was a direction from the member

1 CAS-102155-R8M7 to the Scheme administrator, meaning if Mr GR selected this option, RL would pay the beneficiaries listed by Mr GR.

Mr GR selected and signed “Option one – At the discretion of the Scheme administrator” which contained the wording:-

“In most circumstances we’ll follow your wishes. However, it’s important to understand that under this option we’re not bound to follow your wishes. We may decide to pay your retirement savings to a different person or persons if your personal circumstances at the time of your death make this an appropriate course of action.”

On 29 September 2020, Mr GR’s independent financial advisor (the IFA) informed RL that Mr GR was terminally ill.

On 2 February 2022, RL received a nomination form from the IFA, which had been signed by Mr GR on 1 February 2022 (the February Nomination Form). The nomination form stated that he wished for 100% of his RL pension to be paid to his sister, Ms B, in the event of his death.

On the February Nomination Form, Mr GR was given the same two options as he received on his previous nomination form of 18 September 2020. Mr GR again selected option one for benefits to be paid at the discretion of RL.

Option One contained the wording:-

“While we’d look to follow your exact wishes, we’d have the option to adjust who received the money on your death if we felt it was appropriate to do so. For example, if your personal circumstances had changed since you last updated your death benefit nomination.”

On 31 December 2022, Mr GR died; he was aged 68.

On 5 January 2023, the IFA informed RL of Mr GR’s death.

On 23 January 2023, the second executor named on Mr GR’s Will, dated 25 December 2022, sent RL a completed Bereavement Information Form, a copy of the Death Certificate and Mr GR’s Will. The Will named Mr R as a co-executor, and Mr GR had also named his children, Mr R and Ms R, as beneficiaries in his Will. He had not named his sister, Ms B, as a beneficiary in the Will.

On 30 January 2023, Mr R telephoned RL regarding the nomination change his father had made in February 2022. RL suggested during this call that it appeared as if the nomination form of February 2022 had been completed with two different handwriting styles, and that the reasoning given for the nomination change was due to Mr R and his sister not getting along. RL also advised Mr R to write to it regarding his concerns and send in paperwork in relation to the death benefit claim.

On 31 January 2023, Mr R sent a completed Bereavement Information Form to RL. He said the following on the form:- 2 CAS-102155-R8M7 • He had several conversations with his father about expanding their family business prior to his death, and his intention to use his pension for that purpose.

• His father had nominated him in 2020 as a beneficiary of his pension in the event of his death, to enable him to carry out his wishes.

• They were still having meetings and conversations about purchasing the property next door for their family business in the last few weeks before his father died. His father had been very clear about his plans for his pension.

On 21 February 2023, RL confirmed to Mr R that it had received the relevant forms and information in relation to the bereavement claim following the death of Mr GR. It said that it had deemed Ms B to be the beneficiary as she was Mr GR’s nominated beneficiary. RL also sent a confirmation to the IFA and asked for contact details for Ms B.

On the same day, the IFA responded to RL. It said that it did not represent Ms B and that the only information it had regarding her was that she supported and provided care for Mr GR during his terminal illness.

On 22 February 2023, Mr R raised a complaint with RL as he was unhappy with its death benefit decision. He raised a number of concerns regarding the nomination form which had been completed in February 2022. He did not consider that his father was in the correct state of mind to make this decision as he had serious physical and mental health issues at the time due to his terminal illness. He also confirmed that he did get along with his sister, Ms R, and that they had communicated with each other to enable their father’s care.

On 28 February 2023, RL responded to Mr R’s complaint. It said that it would not be considered unusual that the February Nomination Form was completed with two different styles of handwriting, as these forms are quite often partially completed by a financial adviser. It checked Mr GR’s signature against the driving licence it had received. It also considered the nomination form to be legitimate as it was received from the IFA. It further confirmed that following a new review of the case file, it agreed with its first decision to not pay the death benefits to Mr R.

On 1 March 2023, Mr R responded to RL’s response. He stated that he remained unhappy with RL’s death benefit decision. He confirmed that he was one of the executors of his father’s Will. He also raised additional concerns and asked RL to reconsider its decision.

On 2 March 2023, RL responded to Mr R and said that the settlement decision had been completed and that it would not change this decision.

On the same day, Mr R responded to RL and stated that he still had concerns regarding the decision and that he had taken steps to escalate the matter.

On 28 April 2023, RL confirmed to Ms B’s representatives that it deemed her to be the beneficiary of Mr GR’s pension. 3 CAS-102155-R8M7 On 21 June 2023, RL wrote to Mr R in response to his formal appeal of its decision to award 100% of Mr GR’s pension to Ms B, based on the February Nomination Form. It stated that it did consider the February Nomination Form to be legitimate as it had cross referenced Mr GR’s signatures with previous forms. It asked Mr R to submit further evidence as he had stated that Mr GR may have been coerced into making the nomination change. It said it would put the bereavement claim on hold for 14 working days to give him time to submit the evidence.

On the same day, RL sent an email to Ms B informing her that the bereavement claim had been put on hold as it had received a formal complaint regarding the beneficiary decision.

On 5 July 2023, Mr R provided a response to RL’s response of 21 June 2023. He remained unhappy and provided additional information about his father’s health situation and his relationship with him. He also questioned Ms B’s intentions.

On 20 July 2023, RL telephoned the IFA to make further enquiries regarding the February Nomination Form. During the telephone call, and in a subsequent email, the IFA confirmed the following:-

• Mr GR decided to nominate his sister, Ms B, as the beneficiary of his pension in the event of his death as she was caring for him while he was ill.

• Mr GR was not getting along with his son, Mr R, and there were disputes.

• It was definitely Mr GR who signed the nomination form, and the IFA had no doubts about this. The form was also sent directly to him.

• Mr GR was sure that he wanted to make the nomination change and he discussed the matter with the IFA.

• Mr GR was still working at the time of the nomination change. He was not confused and definitely of sound mind when he made the decision to nominate his sister.

On 26 July 2023, RL sent an email to Ms B confirming its decision to pay the full settlement of the claim in relation to Mr GR’s Scheme pension to her.

On 3 August 2023 and 31 August 2023, RL wrote to Mr R stating that his complaint was still being investigated.

On 14 September 2023, RL issued a final complaint response to Mr R. It did not uphold Mr R’s complaint. It agreed with the settlement decision and said that all potential beneficiaries and facts presented were considered before a final decision was made.

Following the complaint being referred to The Pensions Ombudsman (TPO), Mr R and RL have made further submissions which are summarised below.

Summary of Mr R’s position:- 4 CAS-102155-R8M7 • RL failed to look into the concerns he raised regarding the change of the beneficiary to his father’s pension in the event of his death, which occurred in February 2022.

• His father was on intensive chemotherapy and very vulnerable at the time of the nomination change. His mental health was also deteriorating. He was not in the right mindset to make this decision without being influenced by others.

• Two different handwritings were on the February Nomination Form.

• He had a number of conversations with his father about using his pension to grow the family business. They had discussions in October and November 2022 about expanding the business. He therefore considers that it was his father’s intention for the death benefits from the Scheme pension to go to him.

• He worked with his father until he passed away, and he had a professional and personal relationship with him. He attended all of his father’s hospital appointments and supported him through his chemotherapy.

• He questioned Ms B’s intentions as she announced that she would be closing her business shortly after she found out that Mr GR did not have long left to live.

• The IFA was not present when the February Nomination Form was completed and signed, and so he considers that it would not be able to ascertain whether Mr GR was of sound mind when the form was completed.

• He is also concerned that RL has concealed information during TPO’s investigation into his complaint.

• He does not consider that RL carried out a thorough investigation of his complaint, and it paid the claim to Ms B before his complaint had been resolved.

Summary of RL’s position:-

• The value of Mr GR’s pension was held within the Royal London Master Trust and it was payable at the discretion of RL. It was its obligation to select the most appropriate beneficiary or beneficiaries to settle the claim to. The claim did not form part of Mr GR’s estate.

• It has noted Mr R’s comments about his father’s wish to use his pension to keep the family business going, and that there had been discussions in October and November 2022 to expand the business. However, RL cannot comment on why Mr GR chose to change his nomination or his reasons for doing this.

• It also cannot determine whether or not Mr GR was of sound mind when he completed the February Nomination Form, even if it is aware that he was in chemotherapy at the time.

• It checked the signature on the February Nomination Form against the application form Mr GR completed when taking out his pension with RL in 2011, and

5 CAS-102155-R8M7 subsequent forms signed by him in June 2015, March 2019 and September 2020. It believed that based on this, the February Nomination Form was signed by Mr GR and that it is legitimate. It had no reason to assume that Mr GR’s instruction in the form was not his intention.

• It does not ask for a reason for change when a nomination change is made. This is also not something it would investigate further.

• The claim decision was made based on the information it had received at the time, including the February Nomination Form, which was signed by Mr GR. The final decision was made after taking into account all potential beneficiaries and information it had received. It acted fairly and correctly with the information provided.

• Although the information in Mr GR’s Will can be taken into account, it only provides his wishes, or instructions in regard to his estate, which is separate from his pension with RL. It would not necessarily give any cause of concern that a nominated beneficiary, in this case Ms B, was not included in the Will.

• It has carried out a thorough investigation of any potential beneficiaries, before exercising its discretion. It gathered as much relevant information as possible to ensure that a properly informed decision was made, and it could only base its decision on the evidenced facts it was presented with.

Adjudicator’s Opinion

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7 CAS-102155-R8M7 Mr R did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider. Mr R submitted further comments in response to the Opinion. In summary he said:-

• He does not consider that RL should have based its decision on information obtained by the other executor of Mr GR’s estate. The other executor named in the Will is a third party and is no longer acting for his late father’s estate. The information obtained was used by RL to determine whether any of the potential beneficiaries were financially dependent on his father.

• His father had conversations with his solicitor in September 2022 about starting the purchasing process of a unit to expand the family business.

• He considers that RL should have looked into his late father’s physical and mental health during its investigation.

• He disagrees that the signature on the February Nomination Form is the same as in previous documents signed by his late father. The form was also completed with two or three different handwritings.

• His complaint to RL was dealt with by biased members and was not carried out in a professional manner.

• He believes that RL has concealed information from TPO during the investigation. Some of the documents it has provided contains marks which suggests that information may have been covered.

• He disagrees that he suffered nominal distress and inconvenience as a result of maladministration by RL. He was informed that the investigation was ongoing after the final distribution had been made. So, RL lied to him. He also experienced distress and inconvenience through the process of removing the other executor of his father’s estate, which involved taking the case to the High Court.

I have considered Mr R’s further comments, but they do not change the outcome; I agree with the Adjudicator’s Opinion.

Ombudsman’s decision

Under the Scheme Rules, RL, as the Scheme’s administrator, had discretion regarding payment of death benefits from Mr GR’s Scheme pension.

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I do not uphold Mr R’s complaint.

Pensions Ombudsman 9 March 2026

10 CAS-102155-R8M7 Appendix The Scottish Life Personal Pension Scheme – Rules

1 Interpretation

“Act” means Part 4 of the Finance Act 2004 and the schedules relating to that Part.

…

“Dependant” in relation to a Member has the meaning it has in the Act and includes a person who was married to the Member when the Member first became entitled to a pension under the Scheme but excludes, in relation to an Individual Fund, any person of whose existence the Scheme Administrator is unaware of having made reasonable enquiries.

…

“Relative” in relation to an individual means:

(i) any ancestor or descendant (however remote) of the individual or of his Partner; (ii) any stepchild, brother or sister of the individual (whether of the whole or the half- blood) and any descendant of any such stepchild, brother or sister; (iii) any Partner of the individual or any person within (i) or (ii) above; (iv) any stepbrother or stepsister of the individual

…

19 Benefits following death of Member

19.1 On the death of a Member the Scheme Administrator shall apply his Individual Fund in such one or more of the following ways as the Scheme Administrator in its absolute discretion may determine;

19.1.1 designation as available for the provision of unsecured pension or alternatively secured pension for one or more surviving Dependants in accordance with Rule 22.

19.1.2 purchase of a dependant’s annuity in accordance with the provisions of the Act.

19.1.3 if the Member died before age 75, provision of one or more lump sum death benefits in accordance with Rule 23.

19.1.4. if the Member died at or after age 75 and there are no Dependants provision of one or more lump sum death benefits in accordance with Rule 24.

…

23 Lump Sum Death Benefits (on death before 75)

23.1 On the death of an individual who is a Member or Dependant, any part of his Uncrystallised Fund or Unsecured Fund to be applied in accordance with this Rules shall be paid to or for the benefit of (or by way of settlement or otherwise to Administrators, 11 CAS-102155-R8M7 including Administrators of any discretionary trust, for the benefit of persons including) such one or more of the following and in such proportions as the Scheme Administrator in its absolute discretion may determine:

23.1.1 the individual’s Relatives;

23.1.2 any person for whom income withdrawal may be provided on that death (whether actually provided or not);

23.1.3 (on the death of a Member) any person or body nominated for this purpose by the Member;

23.1.4 (on the death of a Dependant) any person or body nominated for this purpose by the Member (or if the Member made no nomination, the Dependant);

23.1.5 any person entitled under the individual’s will to any interest in the individual’s estate; and

23.1.6 the individual’s personal representatives (but not if the payment would then pass as bona vacantia).

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