Investment Decision Reference 2022-0147

• Case Outcome: Rejected
• Subject Matter: Investment
• Reference: 2022-0147
• Date: 22 April 2022
• Finantial Sector: Investment
• Conducts Complained Of: Mis-selling

Decision Ref:

2022-0147

Sector:

Investment

Product / Service:

Investment

Conduct(s) complained of:

Mis-selling

Outcome:

Rejected

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

This complaint relates to two pension products as follows:

• An Executive Retirement Plan which facilitated a single investment in a Geared

Property Fund in June 2005.

The First Complainant is a Limited Company (“the Complainant Company”) having

two shareholders, and it is the Trustee of the Executive Retirement Plan.

The Second Complainant is the sole member of the Executive Retirement Plan and

he is also a shareholder and director of the Complainant Company.

• A Retirement Bond incepted in December 2010.

The Second Complainant is the plan holder of the Retirement Bond.

These pension products were sold by a third-party broker (the “Broker”) but this complaint

is maintained against the Provider, which is the product provider of the Executive

Retirement Plan and the Retirement Bond.

The Complainants’ Case

- 2 -

/Cont’d…

The Complainants submit that this complaint is in respect of the conduct of the Provider as

the product provider of the Executive Retirement Plan and the Retirement Bond.

The Complainants state that the true nature of those pension policies came to light in 2012

following correspondence between the Second Complainant and the Provider. The

Complainants say that the issues of trusteeship and commissions were first made clear, in

2012.

The Complainants state that this complaint relates to:

“…

• Incorrect completion of Occupational Pension Scheme Trust set up

documentation June 2005

• Lack of provision of requisite documentation at set-up - EG “Rules” - Letter of

Appointment of Trustee

• Lack of provision of full and clear information to [the First Complainant]

regarding scheme assets before and after sale of pension products

• Non adherence to the Consumer Protection Code Regulations

• Breach of duty of registered administration function to maintain accurate and

sufficient records to members and their pension entitlements

• Inappropriate Retirement Bond and acceptance of in specie transfers in 2010 as

qualifying criteria for such bond not met.”

The Complainants say that a legal trust was not created at any date in June 2005 as a

result of:

“…

1. [The Provider’s] failure to properly record and identify the parties to the scheme

2. Failure to obtain complete and correct completion of Letter of Exchange form

3. the failure to adhere to correct procedures and regulations in relation to

pension scheme fund set up and investment.”

The Complainants submit there has been “… a significant loss incurred in the pension

provision of the Principal as a result of such failures.”, and part of this loss crystallised in

September 2013, following the sale of the underlying investment in the Geared Property

Fund. The Complainants explain the investments made, have resulted in monetary loss but

also due to Approved Minimum Retirement Fund (AMRF) requirements, there can be no

access to pension funds by the Second Complainant, until the Second Complainant reaches

75 years of age in 2031.

The individual headings below are those that were used by the Complainants in their

submissions accompanying their Complaint Form.

- 3 -

/Cont’d…

Pension Regulations

The Complainants state that there were accumulated funds in a Defined Contribution

Scheme (the “DC Scheme”), of which the Second Complainant was the sole member.

The Complainants say that in late June 2005, the DC Scheme assets “were forwarded to

[the Provider]” and “converted” to the Geared Property Fund. The Complainants submit

that the Provider processed correspondence, including the application form, and had

access to the information in respect of the DC Scheme assets. The Complainants say that

the Provider dealt with the registration of the Executive Retirement Plan and approval

from Revenue.

The Complainants say that even if the First Complainant had been properly appointed

under the trust, it should be noted that the assets held in the Executive Retirement Plan

as at June 2005, comprised just one policy and that the investment strategy “lies/lay with

fund managers” and not with the Trustee.

Set up Documentation for the Scheme

The Complainants submit that “a legal trust was not created at any date in June 2005”. The

Complainants contend specifically in this respect, as follows:

Letter of Exchange: The Complainants submit that the Letter of Exchange bears a date of 9

June 2005 and is signed by the employer (the First Complainant) and employee (the

Second Complainant). They say that the Letter of Exchange, signed by the First

Complainant, was not in its capacity as Trustee. They also say that the name of the First

Complainant is spelled incorrectly.

Rules: The Complainants submit that a signed Rules document was not received. The

Complainants say that the Provider only supplied a copy of the Rules document entitled

Declaration of Trust and Rules of the Scheme when requested by the Complainants, in

2012.

However, the Complainants submit: “The document contains information of correct

completion, which includes the affixing of Company Seal and signatures of Directors. The

document furnished is blank and bears a 2008 ([reference number]) reference.

Deed of Trust: The Complainants say that no specific deed was signed and a Letter of

Appointment of Trustee was not received in 2005.