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UK Pensions speedbrief: Pensions liberation: new Ombudsman determinations and related announcement

  • United Kingdom
  • United Kingdom
  • Pensions - Speedbriefs


The Pensions Ombudsman has recently published two determinations, and a related announcement, regarding suspected pensions liberation fraud. (For a summary of pensions liberation fraud, see our previous speedbrief here).

The determinations and announcement relate to a Mr Winning who, in late 2012, transferred his pension funds from L&G and Scottish Widows to a suspected pensions liberation vehicle – the Capita Oak Pension Scheme (“Capita Oak”). With the benefit of hindsight, Mr Winning argued that L&G and Scottish Widows should have carried out greater due diligence regarding Capita Oak, and claimed the amount of his transfer values as compensation.


Leaving aside contractual rights under a scheme’s governing documentation, when the trustees or administrators of a pension scheme suspect that a scheme to which a member wants to transfer their funds is a pensions liberation vehicle, they find themselves in a “highly unenviable position” (to quote the Ombudsman):

  1. they are under a legal duty to effect transfers to legitimate occupational or personal pension schemes within six months, under threat of enforcement action and fines from the Pensions Regulator and Ombudsman;
  2. but if they process a transfer to a scheme that turns out not to be a legitimate occupational or personal pension scheme, they will not receive a statutory discharge in respect of the funds (i.e. the member may still be able to claim benefits from the transferring scheme), and may be in breach of their duty to act in the member’s best interests.

In decisions issued in January 2015 (see our previous speedbrief here), the Ombudsman has gone to some lengths to release trustees and administrators from this predicament, by holding that a receiving pensions liberation vehicle was not a legitimate occupational pension scheme, and so the member concerned did not have a statutory right to a transfer of their funds.

In December 2014, however, the Ombudsman had accepted that Capita Oak appeared to be a legitimate occupational pension scheme, albeit in the context of a member’s request to transfer out of that liberation vehicle (which no doubt affected the Ombudsman’s approach), and without the benefit of the scheme’s governing documents.

Key points in the Ombudsman’s determinations and related announcement

In late 2012 Mr Winning signed discharge forms, releasing both Scottish Widows and L&G from all liability following the transfers to Capita Oak. Capita Oak confirmed that it was an occupational pension scheme registered with HMRC, and that Mr Winning’s funds would be used to provide benefits consistent with such registration.

Capita Oak had not yet risen to prominence at this time, and the Pensions Regulator’s guidance “Pension liberation fraud: an action pack for pension professionals” dated February 2013 (which sets out a number of checklists for trustees and administrators to follow if liberation fraud is suspected) had not yet been published.

In deciding whether Scottish Widows and L&G were guilty of maladministration, the Ombudsman looked to their legal obligations and good industry practice at the time the transfers were made. Referring to the Regulator’s 2013 guidance as “a point of change in what might be regarded as good industry practice”, the Ombudsman dismissed the complaints, holding that any duty of care to Mr Winning was overridden by his statutory right to a transfer of his funds. However, note that:

  1. this right only arose because the Ombudsman accepted that Capita Oak was a legitimate occupational pension scheme; and
  2. at the time of the transfers in late 2012, pensions providers were not subject to (and did not have the benefit of) the Regulator’s 2013 guidance.

In his related announcement issued alongside the determinations, the Ombudsman stated that similar complaints in respect of transfers to Capita Oak are unlikely to be upheld (unless they can be distinguished), and should first be addressed through the transferring scheme’s independent dispute resolution procedure.


With the exception of claims by members of the Capita Oak scheme, these determinations are only likely to be of direct relevance where a scheme has, prior to February 2013, transferred benefits to a pensions liberation vehicle that is (or the Ombudsman may accept is) a legitimate occupational or personal pension scheme.

We welcome, however, the broader principle that the Ombudsman will assess maladministration on the basis of the knowledge, understanding, and industry practice in place at the time of the act in question.

The Ombudsman’s determinations do not reveal whether Mr Winning had a contractual right, under his arrangements with Scottish Widows and L&G, to transfer his funds outside of the statutory regime. In a separate determination of the same date (Harrison), the Ombudsman followed the same approach as in his January 2015 determinations, holding that the onus is on trustees and administrators to consider properly and establish the validity of such transfer requests, and that any refusal must be justified to the member in detail.