A landmark ruling is offering fresh hope to the victims of pension scams, after the Pension Ombudsman ruled that the Northumbria Police failed in its duty to protect one of its members.
The case relates to a police officer who transferred his police pension into an alternative scheme, which he now to believes “may have been lost or misappropriated”.
The Ombudsman says Northumbria Police failed to protect the officer in two ways:
- It had not sent him specific literature from The Pensions Regulator (TPR) offering advice on avoiding scams.
- It did not investigate or conduct proper checks on the pension scheme that the money was being transferred into.
The scheme that the money was moved into was an occupational pension called London Quantum. It had only been established recently and TPR said that it should have been obvious to Northumbria Police that its officer would not have had a working relationship with it.
The Pensions Ombudsman has told Northumbria Police it must reinstate the officer’s pension rights as far as is possible.
Steve Webb, director of policy at financial provider Royal London and former pensions minister, says the ruling highlights the duties schemes have to protect their members.
“This is a very important ruling. While individuals obviously have a responsibility to take good care of their pensions and to take proper advice, this ruling shows that pension schemes also have important duties to protect members.
“Not only should they flag the risk of scams, but they should also be undertaking thorough checks about where the money is going to be transferred to. It might be the case that some past victims of scams who have complained to a pension scheme and been turned away could still get redress if the Ombudsman thinks that their scheme trustees did not do a proper job in protecting them”.