3000 complaints made about public sector pension transfers

By Lenore Rice

A survey by The Pensions Regulator (TPR) has revealed that there were almost 3,000 complaints made in respect of delays or refusals of requests to transfer public sector pensions.

There were 12,753 complaints overall in respect of public pension funds over the last year - a significant increase on the 8,011 registered complaints in the previous year. Just under a quarter of the complaints specifically related to pension transfers, with members of the Local Government Pension Scheme (LGPS) raising the most complaints, followed by members of pension schemes for police and fire-fighters.

The new freedoms introduced in April 2015 has resulted in a swift rise in the number of people transferring out of their defined benefit pension schemes, to take advantage of high transfer values with a move to defined contribution schemes. Figures from the Office of National Statistics suggest the total funds transferred out of pension schemes tripled to £34.2billion in 2017 - the highest amount on record.

The 12,753 complaints most commonly related to:

  • disputes over ill health eligibility (40 per cent)
  • incorrect estimates of benefits (31 per cent)
  • slow/ineffective communication (30 per cent)

 

Senior pension analyst at Hargreaves Lansdown, Nathan Long, considers that complaints are on the increase as a result of improved awareness about pension options and the lack of flexibility of defined benefit pension schemes.

Unfunded public service pension schemes cannot be transferred, resulting in a large number of complaints from members of these schemes who are hearing about the options other members have to trade in their guaranteed pension income for a cash equivalent transfer value.

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