All change at the Pensions Ombudsman?

 

Those involved in handling member complaints will be aware of the sizeable backlog of cases and lengthy waiting times being faced by TPO.  Demand for TPO’s valuable services has been on the rise over the last few years, bringing with it funding and resourcing challenges.

In a bid to tackle waiting times, TPO has undertaken a “root and branch” review of its operating model, with the aim of tackling complaints more efficiently.  Significant procedural changes following this review are now underway.

1. Changes to the resolution service

While legislation requires a member to complete their scheme’s IDRP before they can access TPO, this requirement had been relaxed for complainants seeking to use TPO’s informal resolution service – aimed at resolving complaints by agreement between the parties without the need for a formal adjudication

However, TPO announced in June 2024 that the resolution service will no longer be available unless a complainant has exhausted the scheme’s IDRP, to allow the service’s resources to be used more in a more efficient and targeted way.   TPO has published a factsheet explaining how the resolution service will now operate, including that:

• complaints which TPO considers possible to resolve informally by agreement will be referred to its resolution team after initial assessment
• when this happens, a resolution specialist will investigate the complaint and issue an informal assessment and suggested solution. If the parties agree with the suggestion, then the complaint will be closed on that agreed basis
• if the parties don’t agree, and the resolution specialist considers that the outcome of the complaint is clear, they will issue a formal Decision Letter. If the parties agree with the Decision Letter then the complaint will be treated as a resolved at that stage.  Only if the Decision Letter is not agreed will the complaint be passed for adjudication by an Ombudsman in the usual way.

2. A new expedited decision-making model

TPO’s governing framework currently allows any complainant to bring their case all the way to an Ombudsman for a formal determination, no matter the merits of the complaint or how clear the outcome.  As those who deal with complaints will know from experience, seemingly simple cases can still occupy significant time and resources, particularly when brought by a determined member.

TPO has recently rolled out an expedited decision-making model, focusing on complaints which are assessed at an early stage as having a clear outcome, including:

• cases where a member receives an incorrect benefit statement but has clearly not suffered any loss
• a member complaining that automatic fund switches in a lifestyling investment strategy cost have cost them investment returns, but it is clear that the arrangement was adequately communicated in advance
• where a member wants a scheme to honour a cash equivalent transfer value but the member was responsible for not meeting the statutory time limits.

Where cases are selected for the new expedited process:

• an initial decision will be issued to all parties setting out a caseworker’s view. The caseworker may need limited input from the parties to reach this decision if the complaint is sufficiently clear
• if either party disagrees with the initial decision, they can ask for it to be referred to an Ombudsman for determination. If the Ombudsman agrees with the caseworker, he will issue a short final and binding “expedited determination” approving the caseworker’s decision.

Expedited determinations will be short and generally not published, being designed to resolve simple complaints quickly and effectively – similar to “summary judgments” used by the courts in straightforward cases.   TPO’s expectation is that dealing with these cases more efficiently will free up resource for more complex complaints.  Early indications suggest the model could reduce waiting times for relevant cases by up to 18 months.

What does this mean for schemes?

Trustees should consider revising their IDRP policies and websites to reflect these changes and ensure that their signposting to TPO is up-to-date.

Trustees can also consider whether their complaints processes could be improved to mitigate the risk of a protracted complaint ending up before TPO.  Having a robust and up-to-date IDRP policy which is easily accessible and well-communicated  to members, investigating complaints thoroughly at IDRP stage and, where appropriate, making early attempts to resolve valid complaints with suitable offers of redress, can help to avoid cases escalating to TPO unnecessarily – and, when they do escalate, can make it more likely that those complaints will be suitable for an informal or expedited (and less costly) resolution process.

< Back to blog