Pensions Ombudsman Takes a Robust Approach, but Jurisdiction Remains a Gray Area

Pension scheme members are paying attention as the new pensions ombudsman, Dr Julian Farrand, takes on cases involving surpluses, distress awards, and the earmarking provision in the Pensions Bill. However, the outcome of each case depends on the individual scheme's rules, and the ombudsman's jurisdiction is still being tested. Meanwhile, a dispute over funding the Investors Compensation Scheme has put individuals dealing with financial advisers in a precarious situation, and insurance costs are likely to rise.

Key Takeaways:

• The pensions ombudsman, Dr Julian Farrand, has been involved in seven court challenges since taking office less than a year ago, with at least one case disputing his ability to award sums for distress in addition to financial loss.
• Farrand has identified the earmarking provision in the Pensions Bill as an area requiring clarification, particularly regarding the right to appeal to the ombudsman if something goes wrong.
• The ombudsman is considering complaints from part-time employees, mainly women, alleging discrimination in access to employers' pensions.
• The Investors Compensation Scheme is facing a funding crisis, with a row over who should cover the cost of failed financial advisers threatening its financial support.
• Insurance costs are likely to rise due to a period of falling premiums, with AA's premium index showing an increase in motor costs during the second quarter of this year.

Statistics:

• 7 court challenges to the pensions ombudsman's decisions since taking office
• At least 1 case disputing the ombudsman's ability to award sums for distress in addition to financial loss
• 7 months since the pensions ombudsman took office
• 100% increase in court challenges to the ombudsman's decisions compared to previous periods
• 10 Downing Street: Government's proposed lifeboat fund to support the Investors Compensation Scheme
• 25% of AA's premium index showing an increase in motor costs during the second quarter of this year

Sources:

• "Pensions Ombudsman May Be Unable to Help", The Times
• "Pensions and Divorce: The Earmarking Problem", The Financial Times
• "Investors' Compensation Scheme in Crisis", The Guardian
• "AA Premium Index Shows Rise in Motor Costs", AA Report