Reassure Pension Group Stakeholder Pension Plan · CAS-48258-Q9P3

CAS-48258-Q9P3

Ombudsman’s Determination Applicant Mr S

Scheme ReAssure Pension (Group Stakeholder Pension Plan) (the Plan)

Respondents ReAssure Limited (ReAssure)

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 salient points. I acknowledge there were other exchanges of information between all the parties.

Mr S was a member of a Group Stakeholder Pension Plan provided by ReAssure. He was living abroad when he requested the transfer of his pension to a Qualifying Recognised Overseas Pension Scheme (QROPS).

On 6 August 2019, Reassure sent Mr S’ adviser in Malta a letter explaining:-

• The current value of Mr S’ Plan on 6 August 2019 was £152,270.16.

• The options open to Mr S.

• The requirement to return to it all of the necessary documents within 60 days from the date ReAssure received the signed Transfer Payment Release form.

• Mr S also needed to complete and return the following forms before the transfer could take place:-

1 CAS-48258-Q9P3 o An Overseas Transfer Payment Release Form – Mr S would need to ask the receiving scheme to complete the sections that related to them, and an authorised signatory would also need to sign it before it could be sent to ReAssure.

o An Overseas Pension Transfer Questionnaire.

o HM Revenue & Customs (HMRC) Form APSS263.

o A copy of the HMRC APSS251 Form from the receiving scheme. The receiving scheme would also need to provide its QROPS reference number, along with a copy of the acknowledgement letter from HMRC that confirmed this number.

On 15 November 2019, ReAssure wrote directly to Mr S about his intention to transfer his pension to a Self-Invested Personal Pension (SIPP). It confirmed the value of his policy was now £158,294.78, net of charges and any potential final bonus.

ReAssure also confirmed that the value was not guaranteed as it moved in line with the stock market, and would be revalued on the day after receipt of all the requested documents. It also reminded Mr S of the requirement to send the signed Transfer Payment Release Form and the Original Policy Schedule before it could proceed. It also required evidence that the receiving scheme had been registered with HMRC.

On 5 December 2019, Mr S signed the necessary forms, and they were sent to ReAssure by PSG SIPP Limited, (the SIPP provider) which was the intended recipient of the transfer. However, the forms were not received by ReAssure, so the transfer was delayed.

On 24 January 2020, the SIPP provider wrote to ReAssure confirming Mr S’ intention to transfer the Plan as follows:-

• It asked ReAssure to complete the Ceding Scheme form attached to its letter.

• It enclosed the following bundle of documents:-

o Authority to release information signed by Mr S and dated by him on 19 November 2019.

o The Ceding Scheme Form.

o The signed and completed discharge form and Declaration for the Receiving Scheme.

o A copy of the HMRC Approval letter confirming the receiving scheme’s Pension Scheme Tax Reference.

o Identity evidence for Mr S.

o Section 2 page 2 of the Transfer Payment Release Form, signed and dated by Mr S on 10 January 2020.

2 CAS-48258-Q9P3 o Section 2 page 4 of the Transfer Payment Release Form was signed by the Trustee of the Receiving Scheme on 24 January 2020.

On 28 January 2020, ReAssure received the letter from the SIPP provider dated 24 January 2020, which it accepted as evidence that Mr S had sent the forms when he claimed to have done so. ReAssure agreed to proceed on receipt of this evidence.

On 6 February 2020 Mr S had a telephone conversation with ReAssure about the remaining due diligence requirements.

On 10 February 2020, ReAssure wrote to Mr S confirming that it had paid the transfer value of £167,636.03 to his SIPP.

On 12 February 2020, Mr S emailed the SIPP provider to ask for assumed rates of growth on his transfer on the following basis:-

• A period of delay of approximately three months from December 2019.

• Loss of growth on £302,000, the approximate total amount he was transferring to the SIPP, including external funds not part of the Plan.

• He acknowledged the ReAssure fund grew during this period and that he had added further contributions during the period.

• He was sure there would have been greater growth than had been suggested by ReAssure.

The SIPP provider responded by return as follows:-

• A lump sum of £302,000 achieving an assumed growth rate of 5% would have grown to £317,100 or an increase of £15,100 during the period Mr S had specified.

• The Plan had grown in value over the same period by approximately £6,342 net of the two months’ contributions Mr S had made in December and January, totalling £3,000.

On 12 February 2020, Mr S forwarded the SIPP provider’s email to ReAssure.

On 17 February 2020, Mr S telephoned ReAssure to discuss the delay in transferring the Plan, which he contended had resulted in a financial loss to him. ReAssure did not agree that there was a financial loss on the Plan value, which had increased since 5 December 2019, when Mr S had signed the original forms. It did not accept any liability for losses incurred on external funds that Mr S had chosen not to invest until receipt of the Plan value into the SIPP.

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On the same day, ReAssure emailed Mr S to thank him for his email and earlier telephone call. It stated that:-

• It accepted that Mr S had sent the necessary paperwork to complete the transfer in December 2019, and although it had not received those forms, it was willing to review the matter.

• It agreed to consider the assumed financial loss as indicated by the SIPP provider.

• It agreed to assume it had received the transfer forms on 7 December 2019.

• It would calculate the difference between the values on 7 December 2019 and 28 January 2020 to establish whether, or not, a loss had been incurred.

ReAssure sent a further email Mr S on that day as follows:-

• It apologised for the delay in carrying out the transfer and for any losses incurred as a result.

• It confirmed it had not received the transfer forms he had sent on 5 December 2019 which was the reason why the transfer did not proceed earlier.

• However, as the SIPP provider had now sent a copy of the forms signed by Mr S and sent on 5 December 2019, it was willing to accept they were sent, and would treat them as if they had been received. 4 CAS-48258-Q9P3 • As a gesture of goodwill, it was willing to make an assessment of investment losses Mr S may have incurred, but only on the Plan value. This did not extend to non-ReAssure funds.

• It would make good on any investment losses incurred had the Plan transfer been initiated on 7 December 2019.

• It was pleased to note that Mr S was willing to accept this offer and would be in touch as soon as it had assessed the figures.

Also on 20 February 2020, ReAssure provided a loss calculation to Mr S as follows:-

• Dealing first with the loss approach used by Mr S and his SIPP provider, it confirmed that:-

o The transfer value as at 7 December 2019 was £156,820.02 which was the sum that would have been transferred if it had received the transfer forms in December 2019.

o The transfer value as at 28 January 2020 was £167,636.03, which is the sum that was paid to the SIPP provider.

o It confirmed the unit price for Mr S’ fund was higher on 28 January 2020 than it had been on 7 December 2019, producing a transfer value that was higher by £7,816 than the transfer available on 7 December 2019. This additional growth was net of the £3,000 contributions Mr S had made in the interval.

o If it had transferred £167,636.03 in December 2019 (ignoring the two premiums totalling £3,000 Mr S had paid between 7 December 2019 and 28 January 2020) and assuming 5% growth during the delay period, the loss calculated would have been £6,342.

o However, the figure of £167,636.03 could not be used for the investment loss calculation because it was not the value Mr S would have obtained had the funds been transferred in December 2019. The transfer value that should have been transferred in December 2019 was £156,820.03.

o The transfer value in January 2020 was £167,636.03. However, £3,000 had to be deducted for contributions made during the delay period. As the unit price had grown during the delay period, Mr S’ fund value had increased by a net amount of £7,816.00, meaning he had not incurred a financial loss.

o Even based on the loss approach used by the SIPP provider, the gain of £7,816.00 was greater than the projected loss of £6,342 assuming an estimated 5% growth rate in the interval.

o This meant Mr S had incurred no financial loss and was in a better financial position than he would have been had the transfer proceeded in December 2019.

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Adjudicator’s Opinion

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ReAssure confirmed it accepted the outcome and had no further comments to make.

Mr S did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider. Mr S provided his further comments which do not change the outcome. I agree with the Adjudicator’s Opinion and note the additional points raised by Mr S, which are summarised below:-

• He did not agree with the Adjudicator’s findings, and totally disagreed that he had not made a loss, as ReAssure had not transferred the monies in a timely manner.

• ReAssure should have released the funds at the same time as the other, external funds he held. Instead, ReAssure delayed releasing them, and was aware of this delay.

• He and his adviser had contacted the external fund holder and ReAssure at the same time to request the closure of pension plans and the moving of funds. This was to avoid the cost of reinvesting individual amounts.

• This delay was a major issue in setting up the final pension and it did cause a loss in what the total sum could have earned, regardless of what the total did actually earn when it was invested. This was the main point of the complaint.

• It took many emails and other contact to push ReAssure into sending the monies, which arrived some three months later than the external funds. This meant the external funds sat in a holding account until ReAssure’s monies were received.

• Had he carried out the transactions as two separate investments, the set-up costs would have been greater than if the two tranches were invested together.

Ombudsman’s decision

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I do not uphold Mr S’ complaint.

Anthony Arter

Pensions Ombudsman 28 February 2022

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