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New dispute resolution powers for Pensions Ombudsman proposed

Plans to extend the dispute resolution powers of The Pensions Ombudsman (TPO) have been published for consultation by the government.21 Dec 2018

Among the proposals are plans to allow TPO to resolve disputes early, before proceeding to a full determination, and to resolve disputes by way of mediation between the parties. The consultation is also seeking views on allowing an employer to make a complaint or refer a dispute to TPO on behalf of itself, for example in relation to maladministration of a group personal pension (GPP) arrangement it has selected for its employees.

Pensions disputes expert Hayley Goldstone of Pinsent Masons, the law firm behind Out-Law.com, welcomed the proposals, which follow the integration of the dispute resolution powers of the Pension Advisory Service (TPAS) into TPO on 1 April 2018.

"Since Anthony Arter's appointment as Pensions Ombudsman in 2015, many steps have been taken to improve the customer journey so that complaints can be resolved quickly and effectively. This consultation continues to drive that theme forwards," she said.

"Some of the measures may appear ambitious, but if TPO's office is well-resourced and organised then we would welcome the suggested changes," she said.

TPO deals with complaints brought by pension scheme members about pension administration. It can also consider complaints about the actions and decisions of the Pension Protection Fund, and some decisions made by the Financial Assistance Scheme.

The 1992 Pension Schemes Act allows TPO to "investigate" and "determine" complaints and disputes, and provides that its determinations are final and binding. The consultation is seeking views on the best way to give legal effect to a new power of 'early resolution', in line with the trend towards less formal means of dispute resolution. For example, the consultation asks whether TPO should be able to make legally binding directions at the end of an early resolution process, and what the legal status should be of any agreement reached between the parties.

The consultation also considers what should happen once an early resolution process has concluded. It asks whether there should be provision for TPO to close a case; whether parties should have the right to proceed to full investigation or determination by TPO if they are unable to reach agreement; and whether there should be any specific types of enforcement once the process has concluded.

Currently, employers are not permitted to bring TPO claims on their own behalf against a scheme provider or administrator. The consultation proposes changing that, in response to an anticipated increase in the number of small and micro-enterprises choosing GPPs schemes to provide pensions to their employees that they are legally required to automatically enrol into a suitable workplace pension. The government is also seeking views on whether the complaints 'signposting' requirements for firms should be amended to reflect this change.

The consultation closes on 18 January 2019. The government intends to make any necessary legislative changes when parliamentary time allows.