Heinz Uk Pension Plan · CAS-30236-C6J9

CAS-30236-C6J9

Ombudsman’s Determination Applicant Mr E

Scheme Heinz UK Pension Plan (the Scheme)

Respondents The Trustee of Heinz UK Pension Plan (the Trustee), Capita (the Scheme Administrator)

Outcome

Complaint summary

Background information, including submissions from the parties The sequence of events is not in dispute, so I have only set out the salient points. I acknowledge there were other exchanges of information between all the parties.

Mr E was an active member of the Scheme until he took redundancy on 1 May 2015.

In March 2015, Mr E wrote to Capita (the Scheme Administrator) and said he had been offered voluntary redundancy and would like to take his pension entirely as a lump sum from age 50 in 2016.

On 8 April 2015, the Scheme Administrator replied to Mr E and provided him with a Pension Option Form (the Form) and accompanying notes on his options (the Notes). The letter to Mr E said:-

“I can confirm that you are unable to take a one off lump sum from the Plan. You do however have the following options available to you:

• A maximum annual pension (payable on a monthly basis)

• A tax free cash lump sum, and a reduced annual pension (paid on a monthly basis) 1 CAS-30236-C6J9 • Transfer your benefits out of the Plan

• Defer taking your benefits until the normal retirement date (65).

If you decide to transfer your benefits you will be required to seek independent financial advice from a FCA registered adviser before making any decisions. We will be able to provide you with a guaranteed transfer value once you have left the Plan.”

The Form also said the following (amongst other things):

“Alternative Option

As an alternative to the above retirement benefits you can opt to transfer the value of your benefits to another registered pension arrangement (see note 2).”

The Notes under “2” said:

“Under the Plan, up to the point you start to draw your pension, you are entitled to transfer your benefits to another registered pension scheme….

If you draw your pension from the Plan, you will receive the pension benefits set out in this statement. The pension will be set regular income taking into account which retirement option (1, 2 or 3) you chose; you cannot later change the option to decide to draw your pension more slowly or quickly.

If instead of drawing your pension from the Plan you transfer your benefits to a suitable alternative arrangement, you would potentially be able to draw your pension in a more flexible way due to the changes to pensions introduced in April 2015…

It is now a requirement for you to take independent financial advice before your transfer. We suggest therefore that if you are considering transferring, you contact an independent financial adviser at an early stage….

If you do wish to consider the option to transfer then do not complete and return this form and instead contact Capita…”

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On 1 April 2019, the Trustee replied to Mr E under stage two of the IDRP and said:-

Information about the option to transfer was explicitly stated in the Scheme Administrator’s letter to Mr E of 8 April 2015.

The Form and the Notes provided an explanation of the option to transfer.

As Mr E’s pension was in payment it was not possible for it to be transferred to another pension arrangement under current legislation.

The Trustee could not “buy out” his pension.

The option of a lump sum under triviality would not have been available to Mr E, due to the value of his pension benefits in the Scheme.

Adjudicator’s Opinion

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Mr E did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider. Mr E said:-

He was not given any advice about transferring his pension before he left in May 2015 and took his pension in 2016.

Other members were advised to get a financial adviser and following advice the members had transferred their pension benefits out of the Scheme.

He would have to live to “over 100 years of age” before he received the same amount to what he would have received had he transferred.

He has been unfairly treated and had lost out financially.

I note the additional points raised by Mr E, but I agree with the Adjudicator’s Opinion.

Ombudsman’s decision

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Anthony Arter

Pensions Ombudsman 15 September 2021

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