On the go: The Pensions Ombudsman has ruled that Aegon did not fail in its duty of care when allowing a member to transfer his savings to a “bogus employer”, once again emphasising that trustees are not responsible for certain historic cases of fraud.
The ombudsman decided in March that the pension provider did not act negligently when in December 2012 it allowed a member, referred to as Mr R, to move £12,722.08 to a scheme with a company named Bovey Cranbrook.
Only in 2013 did The Pensions Regulator find that this was a pension liberation scheme – funds that claim to let you withdraw your savings before the minimum age of 55 without warning savers of the punitive tax consequences. In February that year the Financial Conduct Authority also issued a warning that Portland Wealth Associates, which facilitated the transfer, was not authorised and had been “targeting people in the UK”.
Aegon “was taking instructions from a bogus employer” and “dealing with a bogus [independent financial adviser]”, said Mr R’s representative, according to the ombudsman’s record.
“Alarm bells should have been ringing in Aegon’s offices from the outset,” the representative added. “Aegon sent the transfer payment to the scheme, which screamed from the documentation as being a scam.”
But while the ombudsman, Anthony Arter, had “every sympathy for the position that Mr R now finds himself in”, he found that the complaint only came “with the benefit of hindsight”, as due diligence standards were “much less onerous” in 2012.
This ruling follows a long line of similar decisions by Mr Arter in recent years, after former Pensions Ombudsman Tony King decided in a 2015 case that Aviva was not responsible for a transfer to a pension liberation scheme, which was made before official guidance on these scams was issued by TPR in 2013.
Following the 2015 case, fewer than a third of the 16 complaints concerning pension liberation have been upheld. In 2019 and 2020, all six complaints were rejected.
Aegon “was sympathetic to Mr R’s unfortunate circumstances”, according to the ombudsman’s record, but it “does not accept that there was any maladministration or any breach of duty”.
There was nothing that “would have aroused suspicions in a reasonably competent pension administrator”, Aegon argued, and it carried out Mr R’s request “in accordance with his statutory right to transfer”.
