Bmw Uk Operations Pension Scheme · CAS-54901-V6R7

CAS-54901-V6R7

Ombudsman’s Determination Applicant Mr S

Scheme BMW (UK) Operations Pension Scheme (the Scheme)

Respondent BMW (UK) Trustees Limited (the Trustee)

Outcome

Detailed Determination Mr S was a member of the Scheme, a defined benefit occupational pension scheme, administered by Aon Hewitt (Aon), by virtue of a previous period of employment.

On 14 February 2013, The Pensions Regulator (TPR) launched a new awareness campaign regarding pension liberation schemes. Part of this campaign involved issuing cautionary documentation informing members about the potential risks of pension scams. This comprised of:

1 CAS-54901-V6R7 Page 8 of the 2013 Action pack provided a number of warning signs/red flags that pension providers should be on the lookout for:

If any of these red flags were present, then it was recommended that direct contact should be made with the member to query the reason for the transfer, the nature of the receiving scheme and how they came to know of it.

The Scorpion Leaflet included examples of real-life pension scams and explained that the warning signs of a potential scam could be:

On 1 April 2014, Mr S appointed Henderson Carter Associates Limited, an independent financial advisory firm (the IFA), to assist him in a potential transfer of benefits. Mr S signed a letter of authority (LOA) allowing the IFA permission to request information in relation to his Scheme benefits.

On 30 April 2014, the IFA wrote to Aon and said, “we have been approached by the above policyholder to give advice about their financial affairs”. The IFA requested details about Mr S’ Scheme benefits and provided a copy of the signed LOA. The IFA also asked for the cash equivalent transfer value (CETV).

On 19 May 2014, Aon sent the IFA an illustration of a CETV, guaranteed until 19 August 2014, for £103,656.88, along with the necessary discharge forms. The CETV illustration stated:

2 CAS-54901-V6R7 “Before deciding to transfer, the member should get independent financial advice. The member should also take a few minutes to read the enclosed leaflet from [TPR] entitled “Predators stalk your pension” as it contains important information about possible severe tax consequences that could apply in certain circumstances.”

One of the transfer declaration forms included the following statements:

“I have read the enclosed “Predators Stalk your Pension” and understand that there could be serious tax consequences for my pension benefits if I transfer to a scheme or arrangement that is later deemed to have committed Pension Liberation Fraud.”

The CETV also included information about the death benefits available under the Scheme. These included a dependant’s pension, payable for life, which amounted to 50% of the member’s deferred pension. Alternatively, if the member was in receipt of their pension at the date of their death, the 50% dependant’s pension was based on the member’s pre commutation pension. These benefits would be lost upon the completion of a transfer.

In July 2014, the 2013 Action Pack was updated (the 2014 Action Pack). The updated guidance included:-

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On 24 September 2014, Mr S provided his authority for Deuten Services Limited (Deuten), the Receiving Scheme’s Administrator, to contact Aon to request information on his Scheme benefits.

On 3 October 2014, Mr S signed his transfer request form that stated he understood and agreed that:

On 14 October 2014, Deuten returned the necessary transfer discharge forms, completed, and signed by Mr S, to proceed with the transfer. The forms included confirmation of the Receiving Scheme’s registration status with HMRC, as at 20 March 2013. The Receiving Scheme was registered under the pension scheme tax reference (PSTR) 00797494RW.

On 28 October 2014, Aon wrote to the IFA and said that before the transfer could proceed, it required some additional information from Mr S and that it would write to him directly.

On 30 October 2014, Aon wrote to Mr S and said that it was unable to confirm what type of arrangement the Receiving Scheme was. Aon asked Mr S to complete the enclosed questionnaire and said: “complete questions 1-5 if the transfer is to your current employer’s occupational pension scheme and questions 6-12 if the transfer is to a pension scheme that is unrelated to your current employer”. Aon included a new transfer member declaration form for Mr S to complete and return if he wished to proceed with the transfer.

4 CAS-54901-V6R7 On 4 November 2014, Mr S completed questions 1-5 of the transfer questionnaire, rather than questions 6-12 as appropriate and completed a member declaration. Referring to “Receiving Scheme information” the questionnaire comments: “To allow us to verify the receiving scheme and complete this transfer please confirm the following information”. In completing the questionnaire, Mr S said that he was not employed by the company that set up the Receiving Scheme, nor was he actively contributing to it.

In completing the transfer member declaration forms, Mr S accepted the following statement:

“I have read and understood the enclosed leaflet “A lifetime’s savings lost in a moment” and understand that there could be serious tax consequences for my pension benefits if I transfer to a scheme or arrangement that is later deemed to have committed Pension Liberation Fraud”.

On 8 December 2014, Aon wrote to Mr S directly and said that he needed to complete questions 6-12 of the transfer questionnaire, before the transfer could proceed.

On 15 January 2015, Mr S returned the completed transfer questionnaire answering questions 6-12. In doing so, Mr S said “I believe so” when asked if the Receiving Scheme’s administrator was regulated by the Financial Conduct Authority (FCA). He also said that his reason for the transfer was to achieve a “better turnout”, however, he had not received a quote to confirm what his benefits in the Receiving Scheme might be.

On 12 February 2015, Aon received another copy of the transfer questionnaire, with all 12 questions answered by Mr S, dated 4 November 2014. In answering question 12, reasoning for the transfer, Mr S said “Better income not losing pension on death”.

On 24 February 2015, Aon wrote to Deuten and said that, before the transfer of Mr S’ benefits could proceed, it required additional information. The Receiving Scheme was noted as an occupational arrangement, but Deuten described it as a simplified defined contribution scheme. This type of scheme disappeared in April 2006; however, the Receiving Scheme was registered in 2013. Deuten should clarify the position.

On 26 February 2015, Deuten responded to Aon to clarify the type of arrangement the Receiving Scheme was. Deuten also provided additional information about the Receiving Scheme. It provided a copy of the Receiving Scheme’s Definitive Trust Deed and Rules (the Rules) and said:-

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“the employer will be recognised as a ‘sponsoring employer’ under section 150(6) of the Finance Act 2004 where one or more of its employees are members and the scheme benefits for those members are directly related to their employment with the employers in question”.

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On 16 March 2015, the Pension Scams Industry Group introduced a voluntary code of practice guide, the “Combating Pension Scams a Code of Good Practice” (the 2015 Practice Guide).

On 21 April 2015, Aon transferred £119,042.62 to the Receiving Scheme.

On 4 January 2018, it was established that the underlying assets for each of the Receiving Scheme’s remaining investments had been severely impacted. Subsequently, for the time being, the Receiving Scheme was unable to pay any pension commencement lump sums, allow for the draw down of benefits, nor could it agree to transfers out.

On 12 January 2018, the Trustees of the Receiving Scheme wrote to Mr S and explained that one of the scheme’s investments had entered into insolvency.

In February 2019, Mr S appointed Tynebank Claims Ltd, a claims management company (the CMC), to act on his behalf in submitting a complaint against the Trustee. Subsequently, the CMC submitted a subject access request to obtain all the information Aon held on Mr S.

On 13 March 2019, Aon sent the CMC a bundle of documents it held for Mr S.

On 27 November 2019, the Financial Services Compensation Scheme (the FSCS) awarded Mr S £50,000 due to the poor advice he received from the IFA.

On 17 February 2020, the CMC submitted a formal complaint, on behalf of Mr S, to the Trustee about the level of due diligence undertaken at the time of the transfer. It said:-

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Aon did not provide a response to the CMC’s complaint of 17 February 2020.

On 9 July 2021, the CMC asked for Mr S’ complaint to be investigated under stage one of the Scheme’s Internal Dispute Resolution Procedure (IDRP). The CMC

1 The Police Pension Scheme (PO-12763) | The Pensions Ombudsman (pensions-ombudsman.org.uk) 2 Local Government Pension Scheme – Hampshire Pension Fund (PO-21489) | The Pensions Ombudsman (pensions-

ombudsman.org.uk) 8 CAS-54901-V6R7 provided a hypothetical value of what Mr S’ transfer value might be at the current date, which was £219,559.67.

On 8 September 2021, the Secretary to the Trustee (the Secretary) did not uphold Mr S’ stage one IDRP complaint and explained that:-

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On 19 October 2021, Mr S asked for his complaint to be investigated under stage two of the IDRP.

On 8 December 2021, the Trustee did not uphold Mr S’ complaint and agreed with the reasoning provided under the Secretary’s stage one IDRP response.

On 27 January 2025, the PO issued a Preliminary Decision on Mr S’ complaint and gave both parties the opportunity to comment.

Both Mr S and the Trustee by way of their respective representatives made further submissions as set out below. I considered these additional submissions and the extent (if any) that they affected my earlier conclusions, and, on the 15 September 2025, I issued a Second Preliminary Decision.

The Trustee’s made no further submissions in response to my Second Preliminary Decision, while Mr S by way of his representative provided additional submissions in the form of a final appeal against both my first and second Preliminary Decisions.

Summary of Mr S’ position, as provided by the CMC

10 CAS-54901-V6R7 Mr S received a cold call which resulted in a free pension review with the IFA, during which he was informed that a transfer was in his best interest. Mr S was not familiar with pensions/investment, so he accepted the advice he was provided with by the IFA.

The IFA was FCA regulated. So, by association, Mr S also believed that Deuten was also FCA regulated, which it was not at any point before, during, or after the transfer.

Mr S was told that by transferring to the Receiving Scheme his pension benefits would increase in value. He was not offered any form of incentive to transfer to the Receiving Scheme.

At the time of the transfer, he was not working, and he was in receipt of ESA of about £78 per week due to his condition, Cervical Spondylosis.

Mr S did not carry out any background checks on the IFA, Deuten, or the Receiving Scheme as the IFA was FCA regulated.

In 2019, he received £50,000 from the FSCS based on the advice he received from the IFA. The FSCS told him that his losses were £151,638.46 in excess of what it could pay him.

Mr S did not receive a copy of the Scorpion Leaflet, nor was he directly contacted about the transfer.

While Mr S did not inform the Trustee that he was unemployed and in receipt of ESA, there was no requirement for him to do so. It formed part of the Trustee’s duty of care/due diligence checks to make reasonable enquiries with Mr S about his employment status. It was not sufficient to place the burden on Mr S.

If the transfer was made on a discretionary basis, the Trustee should have informed Mr S that his transfer was being considered as a discretionary one, as opposed to a statutory transfer.

Summary of Comments Following the Preliminary Decision

Mr S was not an “earner” as defined by the case of Hughes v Royal London [2016] EWHC 3191 (Ch) (Hughes) and the Trustee had no authority to approve a statutory transfer as Mr S was not an “earner” under the law.

The Trustee cannot use discretion to override Mr S’ statutory right to a transfer or in the alternative, if the Trustee, genuinely applied its discretion, it should have given Mr S formal notification of this. The failure to provide clear and timely information raises a legitimate concern over whether discretion was actually exercised or whether the reference to the discretionary transfer is used retrospectively as a defence.

The Trustee allowed a transfer to proceed despite numerous red flags that warranted additional scrutiny under the 2014 Action Pack and the failure to identify and act upon these warning signs constitutes a breach of fiduciary duty.

11 CAS-54901-V6R7 The assumption that the IFA was FCA regulated is legally and factually incorrect.

The Preliminary Decision is legally flawed under Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 as it is unreasonable, as it fails to take into account relevant considerations and/or is based on irrelevant ones. For example, the assumption that Mr S would have transferred anyway is speculative.

Response to my Second Preliminary Decision

On the 29 September 2025, Mr S’ representative confirmed a number of its earlier comments and submitted additional points not previously raised:

Summary of the Trustee’s position

A copy of the Scorpion Leaflet was provided to the IFA along with the CETV illustration on 19 May 2014. It was reasonable to believe that as the IFA was authorised, and regulated, the IFA would forward the Scorpion Leaflet onto Mr S along with the CETV illustration. This approach was accepted by the PO, in a previous Determination CAS-74470-Y3J14. Mr S also acknowledged that he had read and understood the Scorpion Leaflet by signing the member transfer discharge forms.

Aon undertook a sufficient level of due diligence checks, in line with the applicable TPR guidance, for the time. That is, checking that the Receiving Scheme held the necessary registration with HMRC for tax relief, which it did from 20 March 2013.

3Adams v Options UK Personal Pensions LLP (formerly Options Sipp UK LLP and Carey Pensions UK LLP)

(Financial Conduct Authority intervening) [2021] EWCA Civ 474

4 Standard Life Personal Pension One Plan (CAS-74470-Y3J1) | The Pensions Ombudsman (pensions-ombudsman.org.uk) 12 CAS-54901-V6R7 There was nothing to suggest that:

• Mr S was approached, or received a cold call, about the transfer;

• there was no pressure from Deuten or Mr S to speed up the completion of the transfer;

• at the time, Mr S was age 57, so he was not looking to access his benefits before age 55;

• there was nothing in the documentation provided by Deuten indicating any legal loopholes attached to the Receiving Scheme; and

• there was no evidence that the Receiving Scheme was involved in more than one transfer, from the Scheme, having been previously unknown to Aon.

The Rules provided by Deuten included a number of provisions to counteract any attempts at pensions liberation. Namely clause 10.2 and rules 17.4 (pensions liberation) and 23.2 (terms of transfer).

Before Aon agreed to proceed with the transfer, it requested additional information from Mr S and Deuten. In response to these information requests, Deuten provided a thorough explanation of why Mr S did not hold an employment link to the Receiving Scheme. So, there was no cause for concern as to the geographical distance between the Company and Mr S.

Overall, Mr S received advice from the IFA, who, at the time, was regulated by the FCA. So, it was reasonable to assume that prior to the transfer, Mr S was provided with appropriate investment advice from an authorised adviser. Therefore, there was no requirement for additional due diligence checks.

The Trustee held the necessary discretion to agree to a non-statutory transfer. The Scheme’s Trust Deed and Rules (the Scheme Rules) stated:

“18(c) If a member leaves Service, or remains in Service but ceases to be in Pensionable Service, at any time in circumstances where he has accrued rights to benefit under the Scheme but does not require or exercise a statutory right to [CETV], the Trustees may, at the written request of the Deferred Member, apply an amount equal to the amount that would have applied if the Deferred Member had been entitled to a [CETV…]”

By signing the “transfer to an occupational pension scheme” form, Mr S agreed that his transfer request was made “in accordance with the option under the Rules of the …Scheme” and “in so far as my request relates to my statutory option under section 95(2)(a) of the Pensions Act 1993…”. So, Mr S agreed that his transfer was either made under the Scheme Rules, or in accordance with UK legislation.

The Trustee should not be held accountable for the failure of the Receiving Scheme’s investments. Mr S was provided with advice on the Receiving Scheme and its

13 CAS-54901-V6R7 investments by the IFA, not the Trustee as it is not permitted to provide advice on such matters. The payment of compensation from the FSCS supported the view that it was the IFA’s poor advice that led to Mr S’ decision to transfer to the Receiving Scheme.

Section 1(1)(a)(ii) of the 1993 Act makes it clear that occupational pension schemes can provide benefits to an employee and “to, or in respect of, other people”. This was also reflected in section 150 of the Finance Act 2004 which allowed for the admission of people who were not employed by the sponsoring employer into an occupational arrangement.

The rights that Mr S received in the Receiving Scheme were “transfer credits” as defined under section 181 of the 1993 Act, insofar as they were the same as the rights allowed to earners. These rights already acquired did not become something else on onward transfer as they continued to be a transfer credit even if Mr S ceased to be an earner.

The use of the term “transfer credits” under section 73(2)(a) of the 1993 Act was likely used for convenience and was unlikely to be intended to import a requirement for members to be earners before being able to take a discretionary transfer. Doing so would bar people who might benefit from a discretionary transfer, such as those who had retired, but were not claiming a pension, or had been made redundant. There was no policy intent that it was aware of that discretionary transfers to occupational/personal plans should be treated differently.

Occupational pension arrangements are permitted to allow non-employed members. So, there is no reason why a non-employed individual should be prevented from transferring into an occupational scheme. It was reasonable for the Trustee to be satisfied that it was appropriate for Mr S to transfer into the Receiving Scheme, pending any due diligence checks by Aon.

Mr S received express warnings about being cold called and signed a declaration confirming that he had read and understood this warning. The fact that Mr S read and understood warnings about being cold called, reinforces the conclusion that he was set on proceeding with his transfer in any event.

Conclusions

Mr S has complained that the Trustee did not conduct adequate due diligence checks before agreeing to transfer his benefits to the Receiving Scheme.

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“If a Member leaves Service, or remains in Service but ceases to be in Pensionable Service, at any time in circumstances where he has accrued rights to benefit under the Scheme but does not acquire or exercise a statutory right to a cash equivalent, the Trustees may, at the written request of the Deferred Member, apply an amount equal to the amount that would have been applied if the Deferred Member had been entitled to a cash equivalent (but so that that the particular circumstances of the Deferred Member will not be deemed to be altered for the purposes of calculating the amount) or any other amount that the Trustees decide, after consulting the Actuary, in whichever of the ways described in sub-clause (b) of this Clause that the Deferred Member chooses.”

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I acknowledge that the interpretation of the definition of “transfer credits” accepted in Hughes is that it is a requirement for Mr S to have “earnings” at the time of the transfer, albeit from any source. I note however that the only point actually determined in the case was whether Mrs Hughes needed to be an “earner” in relation to a scheme employer or whether having “earnings” from any source would be sufficient.

5 https://www.thepensionsregulator.gov.uk/en/document-library/scheme-management-detailed-

guidance/administration-detailed-guidance/dealing-with-transfer-requests 6 Section 5.1 - The PSIG – Combating Pension Scams – Practitioner Guide (Interim) – 20 March 2023

17 CAS-54901-V6R7 I carefully considered whether I am bound to follow the interpretation of “transfer credits” accepted in Hughes in my recent Determination Mrs T v Lloyds Banking Group Pensions Trustees Limited (CAS-78486-R9D8) and for the reasons set out in that decision I do not consider that I am bound to follow the assumed interpretation of Hughes.

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7 See the decision of the Court of Appeal in Hamar v French also dealing with a waiver of requirements under section 95 of the 1993 Act. 20 CAS-54901-V6R7

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8 More broadly I have considered whether the Trustee had an obligation to consider Mr S’ best financial

interests and note Asplin J’ comments in Merchant Navy Ratings Pension Fund Trustees Ltd v Stena Line Ltd [2015] EWHC 448 (Ch) at para [228] that the “best interests of beneficiaries” should not be viewed as a paramount standalone duty or separate from the proper purposes principle.” 22 CAS-54901-V6R7

9 See Pitt v Holt [2013] UKSC 26

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Since the discretion to allow the transfer under Clause 18(c) was exercised in his favour, Mr S can have no cause of action against the Trustee in respect of its exercise of discretion, and there is therefore no need for me to make any finding as to whether or how the discretion was exercised.

I am satisfied that Clause 18(c) enabled the Trustee to pay Mr S’ transfer on a non- statutory basis, in accordance with his clear wishes, taking into account the legislative requirements of the time and the wording of his signed “transfer to an occupational pension scheme” form and that the transfer was therefore paid in accordance with the Scheme Rules.

The Pensions Ombudsman has considered the obligations of trustees of occupational pension schemes to carry out due diligence in respect of statutory transfers in the Determination of Mr D v Open Trustees Limited (CAS-81940-Z2S8). Having reviewed the Scorpion Leaflet, the 2013 Action Pack and case-law on duties of care in tort and equity, the Pensions Ombudsman concluded that, in law, no duty of care exists on trustees to carry out the due diligence suggested by the 2013 Action Pack and, if necessary, then warn members of any red flags that might be apparent such that it would allow the member to mount a claim in negligence against the trustee.

As set out in Mr D v Open Trustees Limited in relation to a statutory transfer, trustees only have a duty to undertake checks to fulfil the express statutory requirements within section 95 of the 1993 Act and therefore no duty to carry out the due diligence in the 2013 Action Pack. For the same reasons, I find that there would be no duty to carry out the due diligence suggested in the 2014 Action Pack in relation to a statutory transfer. While the recommendations in the 2014 Action Pack were wider in

24 CAS-54901-V6R7 the sense that it addressed pension scams as well as pension liberation, it was not materially different and, above all, its status as guidance was no different.

The same applies to a transfer under the Scheme Rules: the Trustee needed only to confirm that the transfer was in accordance with Clause 18(c). I find that the Trustee fulfilled these requirements, as it went to some length to obtain the appropriate responses from Deuten to confirm the status of the Receiving Scheme and its willingness to accept the transfer (see paragraph 35). In any event, the requirements were met.

Mr S has argued that the provision of section 99 of the 1993 Act requiring trustees dealing with a statutory transfer request to do “what is needed to carry out what the member requires” creates a duty to carry out due diligence and the guidance from the Pensions Regulator in the 2013 and 2014 Action Packs (the Action Packs) effectively clarifies what is required. But the problem with that is that there’s nothing in the statute or regulations that includes the undertaking of due diligence as part of what the member requires.

Mr S’ argument is that section 99 effectively creates a novel freestanding duty on the Trustee that to do due diligence as part of what he as the member required. I don’t consider that section 99 should be construed in this way. It would be contrary to the principle against doubtful penalisation, where a statute will be presumed not to operate to the detriment of a person, including the imposition of civil liability, unless imposed by clear words. It's also clear from the rest of the CETV legislation what the words “what the member requires” are intended to express: the words are used in section 95(1) which sets out the ways in which the cash equivalent can be taken. In section 97, reference is made to the trustees doing “what is needed to comply with what he requires under section 95” making the link with section 95 explicit. So, the concept of what the member requires is linked to section 95 and I find that the words in section 99 should similarly be read as referring to what the member may require under section 95 and not as creating new obligations to carry out due diligence. I do not consider that section 99 creates a duty to carry out additional due diligence for statutory transfers and equally it does not create a duty to carry out due diligence for a transfer under Clause 18(c).

As such, I find that the Trustee had no duty under legislation to carry out due diligence in relation to a statutory transfer or a non-statutory transfer, save to the extent of ensuring applicable requirements of legislation or of the Scheme Rules were met. It also owed no duty of care to Mr S in tort or equity to carry out due diligence to protect him from the risk of financial losses in the Receiving Scheme or consequent on the transfer as it had no duty to check that the transfer was in the best interests of Mr S.

As explained in Mr D v Open Trustees Limited, the Action Packs are not statutory requirements. They are issued by the Pensions Regulator under its powers to provide information, education and assistance to those administering pension schemes. It is not suggested that trustees should not carry out such due diligence in the interests of 25 CAS-54901-V6R7 limiting scams and fraud and as suggested in the Action Packs, so as to collect evidence which the Pensions Regulator may consider in exercising its power to allow additional time for the payment of a statutory transfer. However, the Action Packs could not themselves impose on trustees or administrators an obligation to carry out such due diligence or a liability to members for any failure to carry out such due diligence if the trustees or administrators did not have a pre-existing duty to the member to protect them from such risks. As I find that there is no such pre-existing duty under general law or any provision of legislation or of the Scheme Rules, I find that the Trustee had no duty to Mr S to carry out the due diligence suggested by the Action Packs.

Further, and for the same reasons, it had no duty in law to provide the Scorpion Leaflet to Mr S. There is disagreement as to whether or not Mr S received a copy of the Scorpion Leaflet. However, Mr S did sign at the time to say he had read it. If material, on balance I am satisfied that it was sent. However, I consider that there was no legal duty to provide it for the same reasons that there was no duty to carry out the due diligence suggested in the 2013 or 2014 Action Packs.

Voluntary Assumption of Duty

Recognising that a trustee or manager of a pension scheme has no general duty of care to carry out the due diligence suggested in the 2013 or 2014 Action Packs, before permitting a statutory or non-statutory transfer, it is necessary to consider whether the Trustee nevertheless assumed a duty to Mr S to carry out such due diligence to protect him from the risk of scams or poor investments in the Receiving Scheme.

At common law, a party may be held to be liable in tort for economic losses suffered by another where they have voluntarily assumed responsibility to that other party for a statement, service or task (or are to be treated as having done so)10.

In order for a duty of care to arise on the basis of a voluntary assumption of responsibility, it would be necessary to find that:

10 There is considerable case law on voluntary assumption of responsibility and the above is only a summary

of the principles as applicable in this case. Recent cases considering the voluntary assumption of responsibility as a basis for liability in tort for pure economic loss include HMCEC v Barclays Bank [2006] UKHL 28; NRAM v Steel [2018] UKSC 13; Phelps v Hilingdon LBC [2001] 2AC 619(HL); Banque Keyser Ullmann SA v Skandia (UK) Insurance Co Ltd [1990] 1 QB 665, and Hamble Fisheries Ltd v L Gardner & Sons Ltd (The Rebecca Elaine) [1999] 2 Lloyds Rep 1. 26 CAS-54901-V6R7

Merely exercising a discretion to pay a transfer does not amount to a voluntary assumption of responsibility to do due diligence in relation to the transfer. It is a decision to allow the transfer and implementing the transfer may require certain actions including due diligence checks necessary to ensure the transfer meets statutory or scheme requirements. But the exercise of discretion is not in itself an assumption of duty to do something not already required by the Scheme Rules, general law and legislation in respect of paying transfers. As set out above in paragraph 125, to establish a voluntary assumption of responsibility a member will need to have been advised by the trustee that it was undertaking additional due diligence so that the member relied on the trustee and that it was known or foreseeable to the trustee that the member was relying on it to undertake such additional due diligence.

In principle, where a trustee or administrator informs a member that they have carried out or intend to carry out due diligence, as set out in the 2013 or 2014 Action Pack or otherwise to confirm that there are no red flags or risks associated with the transfer, and that it will make a discretionary decision based on these checks or contact the member about any red flags, the trustee or administrator could be held to have assumed a duty of care to the member in respect of such due diligence. This is in contrast to a scenario where a trustee undertakes due diligence, as set out in the Action Packs or otherwise, but does not communicate this to the member. This is because a key requirement for establishing a duty at common law by voluntary assumption of responsibility is the expectation of the other party’s reliance. This generally requires direct or indirect communication that the due diligence is being carried out and reasons to expect reliance. If the fact that the trustee is carrying out or intends to carry out due diligence is not communicated to the member, the trustee may have no reason to expect the member to be reliant on its due diligence.

Likewise, if the trustee is aware that the member is being advised by an IFA or some other party, it may be reasonable for them to expect the member to be relying on such other adviser11. Sending out the Scorpion Leaflet and/or asking a member to confirm that they have read it, would also tend to negate any assumption of duty in respect of the Scorpion Leaflet checks.

In this case the Trustee has asserted that the Scorpion Leaflet was issued to Mr S’ IFA and it is accepted that Mr S signed the transfer forms to acknowledge that he had read and understood the Scorpion Leaflet. The CETV quotation was accompanied by a statement referencing the Scorpion Leaflet. As such, while it is disputed that Mr S ever received the Scorpion Leaflet, I find that the Trustee was expecting Mr S to be appraised of its contents and, at the least, was expecting Mr S to consider the

11 See NRAM v Steel [2018] UKSC13 in contrast to Dean v Allin and Watts [2001] EWCA Civ 758.

27 CAS-54901-V6R7 matters referenced in the Scorpion Leaflet. This would tend to negate an assumption of duty in relation to the contents of the Scorpion Leaflet.

As to whether the Trustee voluntarily assumed a responsibility to carry out the due diligence in the 2013 or 2014 Action Packs (and then warn Mr S if there were any red flags) I do not consider that the Trustee did assume responsibility to carry out such due diligence. The checks carried out by Aon were principally those necessary to ensure that Mr S’ transfer request could be satisfied in accordance with the Scheme Rules. Carrying out due diligence that is necessary to ensure the transfer is in accordance with Scheme Rules does not imply or suggest an assumption of responsibility to carry out other due diligence. In any event, the fact of carrying out some due diligence, to satisfy the regulatory requirements is not sufficient for an assumption of responsibility to carry out the due diligence as recommended in the Action Packs.

To establish a voluntary assumption of responsibility the Trustee would need to have taken on some responsibility to Mr S for carrying out the due diligence set out in the Action Packs in circumstances that would make it reasonably foreseeable that Mr S would rely on it to do so in relation to his transfer. Mr S then also needed to rely on the Trustee having done this due diligence in requesting the transfer. The investigations and questions asked by Aon were not of themselves sufficient to communicate an undertaking to carry out the due diligence, set out in the Action Packs, in the expectation of reliance, given that it was legitimate and relevant for Aon to be carrying out such investigations and asking such questions for the benefit of the Trustee and to ensure that the conditions for a transfer under Clause 18 and section 95 of the 1993 Act were met.

As evidenced above (see paragraphs 9, 10, 32 and 56 to 61), Mr S’ relationships prior to the completion of his transfer were primarily with his IFA and Deuten who provided him with financial advice and assistance in the management of his transfer request. I do not consider that there is any doubt that rather than placing reliance on the Trustee, Mr S relied on the advice provided by his IFA and the assistance of Deuten. The involvement of both the IFA and Deuten, to the knowledge of Aon and the Trustee, also mean that it was reasonable for the Trustee to take the view that Mr S was being professionally advised and that he was not relying on the Trustee to provide him with either advice or further information on whether the transfer was in his best interest. The requirement that Mr S confirm he had read and understood the Scorpion Leaflet further supports the conclusion that the Trustee was not assuming responsibility for risks mentioned in the leaflet but leaving it to Mr S to consider for himself.

For these reasons, I find that the Trustee did not assume a duty of care by voluntary assumption of responsibility to carry out due diligence either as suggested in the 2014 Action Pack or otherwise.

Reliance

28 CAS-54901-V6R7 In my Preliminary Decision, I considered the due diligence that had been carried out, that Mr S had confirmed that he had read the Scorpion Leaflet and that he had confidence in his IFA. Based on the evidence available, I concluded that even if further additional due diligence measures were undertaken, and Mr S was directly contacted with more questions, he would more likely than not still have proceeded with the transfer. Mr S' representative (see paragraph 54) has suggested this conclusion was speculative. On reflection and having reviewed The Pensions Ombudsman’s decision in Mr D v Open Trustees Limited, I consider that I do not need to make a finding on what Mr S might have done had additional due diligence been carried out and had further questions been put to him. The Trustee had no duty to carry out such additional due diligence or issue any warnings or check whether his decision was in his own interests when acceding to his request to transfer under Clause 18(c) and did not assume a duty to do so, and as such the Trustee can have no liability to Mr S in respect of the transfer. I make no finding as to what Mr S would have done had due diligence been undertaken in line with the Action Packs and had the Trustee discovered more and issued warnings to him.

Conclusion

For the reasons set out above, I conclude that the Trustee owed no duty to Mr S, to carry out due diligence checks in respect of the Receiving Scheme, in accordance with the 2013 and 2014 Action Packs or otherwise, before transferring his benefits to the Receiving Scheme either under the Scheme Rules including Clause 18(c), the statutory transfer provisions of the 1993 Act, general law or by voluntary assumption of responsibility.

While I find that Mr S did not have a statutory right to a transfer because he exercised or purported to exercise his statutory right after the expiry of the three-month guarantee period under section 95 of the 1993 Act, I find that the Trustee was:

I also find that the Trustee:

29 CAS-54901-V6R7

I also find that the transfer was made in accordance with his request and that it complied with the requirements of Clause 18(c) (including the requirements of Clause 18(b) and section 95 of the 1993 Act insofar as required by Clause 18(b)).

I appreciate that this will not be the outcome that Mr S had hoped for.

While I sympathise with Mr S’ circumstances and the losses he suffered in the Receiving Scheme, I do not uphold his complaint.

Camilla Barry Deputy Pensions Ombudsman

25 November 2025

30 CAS-54901-V6R7 Appendix 1

Excerpts from Action pack for the trustees and administrators

31 CAS-54901-V6R7

32 CAS-54901-V6R7 Appendix 2 The Social Security Contributions and Benefits Act 1992

Section 3 - “Earnings” and “earner” “(1) In this Part of this Act and Parts II to V below—

(a) “earnings” includes any remuneration or profit derived from an employment; and

(b) “earner” shall be construed accordingly.”

Section 4 - Payments treated as remuneration and earnings

“(1) For the purposes of section 3 above there shall be treated as remuneration derived from employed earner’s employment—

(a) any sum paid to or for the benefit of a person in satisfaction (whether in whole or in part) of any entitlement of that person to—

(i) statutory sick pay; or

(ii) statutory maternity pay;

(iii)... statutory paternity pay;

(iv). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(v) statutory adoption pay; ...

(vi) statutory shared parental pay; or

(vii) statutory parental bereavement pay; and

(b) any sickness payment made—

(i) to or for the benefit of the employed earner; and

(ii) in accordance with arrangements under which the person who is the secondary contributor in relation to the employment concerned has made, or remains liable to make, payments towards the provision of that sickness payment.”

Section 112 - Certain sums to be earnings

“(1) The Treasury may by regulations made with the concurrence of the Secretary of State provide—

33 CAS-54901-V6R7 (a) that any employment protection entitlement shall be deemed for the purposes of Parts I to V of this Act to be earnings payable by and to such persons as are prescribed and to be so payable in respect of such periods as are prescribed; and

(b) that those periods shall, so far as they are not periods of employment, be deemed for those purposes to be periods of employment.

(2) In subsection (1) above “employment protection entitlement” means—

(a) any sum, or a prescribed part of any sum, mentioned in subsection (3) below; and

(b) prescribed amounts which the regulations provide are to be treated as related to any of those sums.

(2A) Regulations under subsection (2) above shall be made by the Treasury with the concurrence of the Secretary of State.

(3) The sums referred to in subsection (2) above are the following—

(a) a sum payable in respect of arrears of pay in pursuance of an order for reinstatement or re-engagement under the Employment Rights Act 1996;

(b) a sum payable by way of pay in pursuance of an order under that Act or the Trade Union and Labour Relations (Consolidation) Act 1992 for the continuation of a contract of employment;

(c) a sum payable by way of remuneration in pursuance of a protective award under the Trade Union and Labour Relations (Consolidation) Act 1992.”

Section 122 – Interpretation of Part I and VI and supplementary provisions

““employment” includes any trade, business, profession, office or vocation and “employed” has a corresponding meaning;..”

34