Cowen International Group Personal Pension Plan · CAS-43963-S1M6

CAS-43963-S1M6

Ombudsman’s Determination Applicant Mr Y

Scheme Cowen International Group Personal Pension Plan (the Plan)

Respondents Aviva Life & Pensions UK Ltd (Aviva)

Outcome

Complaint summary

Background information, including submissions from the parties

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On 7 August 2019, Mr Y completed the discharge transfer forms electronically.

On 8 August 2019, Mr Y’s funds in the Plan, which amounted to £180,571.25, were transferred to Interactive Investor through Origo. Mr Y then raised a complaint with Aviva.

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Mr Y was unhappy with this outcome and asked Aviva to review its decision.

Aviva reviewed the calls again and decided that Mr Y had in fact specified that he wanted to transfer on 31 July 2019. To put matters right, Aviva explained the timeline of events: -

• Aviva therefore agreed to pay Mr Y the difference between the transfer values for the dates in question either directly into the SIPP or as a cash settlement, less tax.

3 CAS-43963-S1M6 Mr Y’s position

“…we have agreed in these situations to offer [compensation] to customers as a cash settlement and not to transfer it to the other scheme. This is because any payments made now after the transfer has been completed would be treated as additional contributions and not as part of the original transfer, which can have tax implications. However, there is nothing stopping [Mr Y] paying this into the scheme himself should he so wish. In fact, he could actually benefit by this.

If he accepted the additional £602.66 gross we would pay him £512.26 net. This is because we would pay him as if it were a pension payment; 25% tax free and the rest net of 20% tax.

If he were then to pay this into his pension he would actually receive relief on this meaning £614.71 would get added.”

Adjudicator’s Opinion

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• The Adjudicator’s view was that Mr Y had suffered a financial loss because of the incorrect information given by Aviva and so Aviva should establish what the current value of the SIPP would be, assuming the transfer had taken place on 31 July 2019 with the higher transfer value, taking into account any withdrawals or fund switches.

Mr Y accepted the Adjudicator’s Opinion, but Aviva did not, and the complaint was passed to me to consider. Aviva provided further comments which do not change the outcome. I agree with the Adjudicator’s Opinion and note the additional points raised by Aviva.

Aviva’s additional comments

Aviva maintained that:

No transfer could (or would) have been started and concluded on 31 July 2019, even if Mr Y had been informed that an Origo transfer was possible.

Mr Y did not send his transfer request on 8 August 2019 as the Adjudicator has stated. Instead, it was on 7 August 2019 as outlined in the Origo transfer paperwork.

It took three business days in total to process the transfer request; it was received on 7 August and was completed after business closure at 19:25 on 8 August.

Mr Y was undecided about whether to transfer during the call on 1 August “regardless of how the transfer could proceed”. This was demonstrated by Mr Y’s use of comments such as “I am considering transferring” and “do I have to go ahead with the transfer after I get the pack”.

5 CAS-43963-S1M6 Mr Y showed no urgency over the transfer during the telephone call on 1 August. He did ask for the transfer forms to be emailed but could not open these on his computer and so he opted to receive the transfer forms by post.

Mr Y was not incentivised to transfer by the cashback offer, but by the fund change that was taking place in mid-August.

Aviva said, “the correct delay to look at is 3 working days giving a price point of 5 August and a shortfall of £602.66 gross as this is the timeframe it took the customer and his new scheme to make a decision and effect the transfer”. It is rarely ever possible to enact a transfer from start to finish any quicker than this.

Insufficient consideration has been given to the telephone call on 1 August 2019 or the Origo transfer paperwork which are key to the investigation.

Mr Y’s additional comments

Mr Y said:

• that to accept Aviva’s position and version of events, one would have to believe Aviva somehow knows more about his “mind, thoughts and intentions” than he does himself.

• He has been honest and truthful, but Aviva ha instead denied responsibility and delayed resolution of the issue which has caused him further upset and distress.

Ombudsman’s decision

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I uphold Mr Y’s complaint.

Directions

Anthony Arter

Pensions Ombudsman 21 July 2021

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