Out-Law News 1 min. read

New Pensions Ombudsman to overhaul 'lengthy and confusing' dispute resolution process


The way in which disputes referred to the Pensions Ombudsman are decided should be overhauled, with the "vast majority" of cases resolved by way of an informal opinion from an investigator, the current ombudsman has said.

Anthony Arter, who became the first former pensions lawyer to be appointed to the post in May this year, said that the service should stop issuing 'decision letters' and provisional decisions, in order to speed up the dispute resolution process and simplify what he described as a "lengthy and confusing" current process.

The Pensions Ombudsman deals with complaints from pension scheme members once they have reached the end of their scheme's own complaints process without coming to a satisfactory resolution. Complaints are usually dealt with in one of three ways: an informal opinion from an investigator, a slightly more formal decision letter or a formal determination by the ombudsman or his deputy. Provisional decisions are issued via letter in the most complex cases, but there is usually a three-week delay between this letter and final determination.

In an interview with trade publication Professional Pensions (registration required), Arter said that he wanted to increase the number of cases resolved informally and do away with the intermediary route altogether. Determinations would be reserved for those cases that involved a new point of law, were representative of a large number of complaints, were particularly complex or would almost definitely be appealed, he said.

"I think we should stop using decision letters, because I don't see the point, and increase the use of opinions, which in the past have only been used sparingly for very simple decisions," he told Professional Pensions. "The drafting of a provisional decision and then waiting three weeks before a determination is issued lengthens the process, in most cases unnecessarily."

Arter said that all parties would be able to reject an opinion and seek full determination from the ombudsman under the new system. He also intended to begun publishing opinions on the Pensions Ombudsman website where these would be useful to the industry, alongside formal determinations. Currently, only the latter are published.

The new ombudsman has already updated the service's guidance on compensation for non-financial injustice, doubling the usual "starting point" figure from £250 to £500; and has given an important determination in a case involving the equalisation of guaranteed minimum pension (GMP) benefits.

"Anthony hasn't been in his post for long, but already he is having an impact," said Isabel Nurse-Marsh, head of pensions litigation at Pinsent Masons, the law firm behind Out-Law.com.

"Anthony's approach is innovative and pragmatic, and his background as a pensions lawyer is helping to ensure that those determinations that are published are rigorously argued. He is right that there is no reason why all cases should result in formal determinations. We warmly welcome all steps to speed up the process," she said.

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