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online technical resource



Pension arrangements are tax-efficient savings plans designed to provide someone with income in retirement. Some arrangements are also able to provide a tax-free lump sum.

Pensions arrangements fall into three broad categories:

  • personal pension arrangements
    where an individual takes out a policy in their own name to provide an income in retirement;
  • pension arrangements organised by employers
    providing their employees with an income in retirement; and
  • state pensions
    consisting of two elements - the basic state pension and the State Second Pension or S2P (previously called the State Earnings Related Pension Scheme or SERPS).

We cannot look at all complaints relating to pension arrangements. There are more details about the pension complaints we can and cannot deal with in the section on our website about our "pensions jurisdiction".

  • In particular, we cannot look at any complaints relating to state pensions. These are usually dealt with by The Pension Service (part of the Department for Work and Pensions).

Some pension issues are specific to the type of pension arrangement involved. But there are some more general issues that can affect a number of different pension arrangements.

how we decide complaints about pensions

personal pension arrangements

These are arrangements where an individual investor has a contract with a "product provider" to provide them with a regular income (or annuity) in retirement (and in some cases, a tax-free lump sum). An employer may contribute to this kind of arrangement.

Some personal pension arrangements have restrictions on the contributions that can be made - and on what can be paid out in the form of an income and/or tax-free sum.

We regularly see complaints that:

  • the pension arrangement recommended was unsuitable for the consumer's circumstances;
  • the investment funds chosen were inappropriate given the consumer's attitude to investment risk;
  • the consumer was ineligible to start the pension arrangement;
  • the consumer should not have been advised to contract out of the State Earnings Related Pension Scheme (SERPS) through a personal pension;
  • there have been delays in starting income or annuity payments, or payments have been made on the wrong basis;
  • the consumer was inappropriately advised to start an income-drawdown arrangement rather than purchase an annuity.

There are a number of personal pension arrangements that consumers are able to take out in their own name, and we are able to consider most complaints about them.

Where we cannot investigate a complaint, we will tell the consumer about any other organisation that might be able to help.

how we decide complaints about personal pension arrangements

We will take into account all the relevant circumstances of the case including:

  •  the suitability of the pension arrangement recommended to the consumer, given their personal circumstances and aims;
  • the suitability of the underlying investments in the pension arrangement given the consumer's attitude to investment risk; and
  • where income payments have started, whether they have been paid on the correct basis and in a timely manner.

Our technical note on assessing the suitability of investments gives more information on how we evaluate suitability.

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pension arrangements organised by employers

Some employers may organise pension arrangements for the benefit of their employees. We can look at most complaints about:

  • group personal pension plans (GPPs);
  • small self-administered schemes (SSASs);
  • executive pension plans (EPPS).

We are unlikely to be able to look at complaints about other employer-organised arrangements. There are more details about the pension complaints we can and cannot deal with in the section on our website about our "pensions jurisdiction".

We regularly see complaints that:

  • the advice given to start a pension scheme was unsuitable;
  • the benefits paid have been unduly delayed, or have been incorrectly calculated;
  • the benefits available under the pension scheme have been misrepresented;
  • the pension scheme has taken too long to be arranged, or has been arranged incorrectly; and
  • the money invested in the pension scheme tied up capital inappropriately.

how we decide complaints about group personal pension plans (GPPs)

Group personal pension plans (GPPs) are a collection of individual personal pensions arranged by an employer for individual staff members. The employer may or may not contribute to the pension arrangements.

Because GPPs are made up of a number of individual personal pension plans, most complaints we see about these arrangements are similar to those relating to individual personal pension arrangements.

We also see cases involving GPPs where the consumer complains about advice they have been given collectively as members of a GPP. Sometimes the business complained about says that it gave only general information to all members of the GPP - rather than individual advice to the consumer in question.

When we investigate complaints like this, we take into account both side's recollections of events - and the evidence provided - to decide whether, on balance, advice was given.

If we decide that advice was given, we then assess the suitability of that advice. There is more information about how we do this in the section of our website on assessing the suitability of investments.

complaints about small self-administered schemes (SSASs)

This is a pension arrangement run according to its trust deed and rules - and to obtain certain tax benefits it must also comply with Her Majesty's Revenue and Customs (HMRC) requirements.

The scheme can invest in a variety of permitted assets. And it has the ability to borrow money to finance investments such as property purchases.

We see a wide variety of complaints involving SSASs, including complaints that:

  • it took too long for the pension arrangement to be set up - or it was set up incorrectly;
  • the investments recommended within the arrangement were not suitable - or incurred excessive charges; and
  • there were delays in setting up annuity payments on retirement.

When reaching a decision, we take into account the rules that govern these schemes that were in place at the time of the dispute.

We will also take into account the members' rights and the duties of the trustees. And we assess the general suitability of the advice given. There is more information about how we do this in the section of our website on assessing the suitability of investments.

complaints about executive pension plans (EPPs)

These pension arrangements generally have few members. They are usually set up by company directors for themselves - and sometimes for their spouse.

The only asset of an executive pension plan is an insurance policy. The pension amounts it can provide on retirement will be affected by any benefits a scheme member has accrued under other pension arrangements - and also whether the scheme member is what is classified as a "controlling director".

We see a wide variety of complaints involving EPPs, including complaints that:

  • the consumer was advised to start regular contributions rather than single contributions - and that this has increased the charges incurred or is an unaffordable commitment;
  • the amount of either the tax-free sum or the pension income was misquoted to the consumer - or that the actual sums paid to the consumer were too high and must now be repaid;
  • excessive penalties have been applied on transfer; and
  • commission taken by an adviser has been excessive.

When we reach a decision, we consider all the relevant circumstances and the arguments put forward by the consumer and business.

This includes taking into account the information given to the consumer when the executive pension arrangement was set up - and, where relevant, whether the consumer was likely to be able to meet any regular premium commitments.

pension issues in general

Some complaints are about issues that can relate to more than one type of pension arrangement. These include complaints about:

  • the loss of Guaranteed Annuity Rates (GARs);
  • problems with pension-sharing orders;
  • the application of a Market Value Adjustment (MVA) on money held in a "with-profits" fund;
  • electing not to join an employer-organised pension scheme with guaranteed pension benefits;
  • pension transfers;
  • issues arising from the industry-wide Pension Review;
  • pension contributions being re-directed from an existing pension arrangement to a new arrangement (sometimes called "churning");
  • pension mortgages, where the tax-free lump sum from a pension arrangement is intended to repay a mortgage.

The types of cases we see include complaints that:

  • the adviser failed to take into account the loss of guaranteed annuity rates (GARs) when recommending that pension benefits should be transferred to a new arrangement;
  • the adviser gave unsuitable recommendations for investing a payment received from a pension-sharing order;
  • an MVA has been applied when a consumer transferred their "with-profits" pension fund;
  • the adviser failed to take into account the guaranteed benefits that were available under an employer-organised pension scheme;
  • advice relating to the transfer of pension arrangements has resulted in lower pensions benefits;
  • the business has failed to carry out a Pension Review in accordance with the regulator's guidance;
  • the consumer says they have incurred additional charges by re-directing contributions from an existing pension arrangement to a new one;
  • using a pension arrangement as a mortgage repayment vehicle was unsuitable or inappropriate advice.

how we decide complaints about generic pension issues

When we investigate a case relating to one of these generic pension issues, we consider the specific circumstances of the case and the arguments put forward by both sides. This includes taking into account:

  • what information the consumer was given at the time that the event complained about occurred;
  • the general suitability of any advice provided. There is more information about this in the section of our website on assessing the suitability of investments.

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help for businesses and consumer advisers

contact our technical advice desk on 020 7964 1400

This is part of our online technical resource which sets out our general approach to complaints about a wide range of financial products and issues. We would like your feedback on how helpful you found it. Please also use the feedback form below to tell us about anything you think we could clarify or explain better.

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  • The law requires us to decide each case on the basis of our existing powers and what is fair in the circumstances of that particular case.
    We take into account the law, regulators' rules and guidance, relevant codes and good industry practice at the relevant time.
    We do not have power to make rules for financial businesses.
    Our current approach may develop in the light of circumstances disclosed by further cases we receive.
    We may decide that fairness requires a different approach in a particular case.