At the end of 2018, the DWP and the Pensions Ombudsman launched a consultation on suggested changes to the jurisdiction of the Pensions Ombudsman. The main focus of the consultation was dispute resolution, including how best to introduce a new early resolution service. However, respondents were also asked to give their views on an extension of the Pensions Ombudsman’s jurisdiction in respect of group personal pension plans.
On 8 August 2019, the consultation response was published.
What does the consultation response say?
The consultation response says that the government supports the introduction of a new, informal, ‘Early Resolution Service’, to be provided by the Pensions Ombudsman’s Office.
The idea is that the ERS could “offer a route for resolving complaints that are less complex in nature, allowing parties to explore a route to resolution that is relatively quicker and therefore more cost-effective, in a potentially less formal manner”.
Use of the ERS would be voluntary: the parties would have to agree.
It is expected that, in the “majority” of cases, the ERS would be used before a complaint went through a scheme’s IDRP.
If the parties agreed a settlement as a result of using the ERS, then the Pensions Ombudsman would have the power to close the case, but the parties would need to record and enforce their own settlement.
If the parties do not agree to use the ERS, or if the complaint is not resolved as a result of using the ERS, then the member/beneficiary will be able to make an IDRP application and, if necessary, take their complaint through to the Pensions Ombudsman.
The government also intends to make two further changes:
- To introduce some flexibility for parties to agree to bypass the IDRP, For example, the parties might be able to agree that a complaint can go straight to the Pensions Ombudsman’s office if “…Dispute A .. has been through IDRP but several other disputes which raise an issue that are identical to the issue in Dispute A have not”; and
- To allow an employer to make a complaint to the Pensions Ombudsman about a dispute of law with, or a complaint of maladministration by, the provider or administrator of the Group Personal Pension plan it offers to its employees. This will give these employers a similar right of complaint to that enjoyed by employers who operate trust-based schemes.
When will the changes be made?
The consultation response does not give a timetable for making these changes.
It is possible that draft legislation will be included in the next Pensions Bill. However, the consultation response also refers to other work streams. For example, the DWP is going to work with the Pensions Ombudsman on some of the concerns that were raised about the Early Resolution Service. These concerns included, for example, that: the Pensions Ombudsman’s office should not be seen as an advocate for complainants; without prejudice discussions in an early resolution procedure should not be referred to if a complaint does not settle and goes on to the Pensions Ombudsman; and complaints without merit should still be dismissed at the early resolution stage (the ERS should not become “a means to apply pressure for paying members off”).
Open Trustees comment
At the moment, the early resolution team at the Pensions Ombudsman’s office provides the same, extremely valuable, assistance to members that was provided by the TPAS advisers before they transferred across. The Early Resolution Service will be slightly different and we look forward to seeing it develop. We will also follow, with interest, the development of any flexibility to bypass the IDRP.
12 August 2019