Pension Transfers Decision Reference 2022-0249

• Case Outcome: Rejected
• Reference: 2022-0249
• Date: 26 July 2022
• Year: 2022
• Subject Matter: Pension Transfers
• Finantial Sector: Investment
• Conducts Complained Of: Failure to advise on key product/service features

Decision Ref:

2022-0249

Sector:

Investment

Product / Service:

Pension Transfers

Conduct(s) complained of:

Failure to advise on key product/service features

Outcome:

Rejected

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

The complaint relates to the closure of a fund under a personal pension policy. It is

suggested that the clause relied on by the Provider to close the fund in question is an unfair

term within the meaning of the European Communities (Unfair Terms in Consumer

Contracts) Regulations 1995, SI No 27/1995 (as amended) (UTCC Regs).

As the complaint was first received by the Financial Services Ombudsman’s Bureau (“FSOB”)

in 2013, references in this Decision to “this Office” should be taken to include both the

Financial Services and Pensions Ombudsman and its predecessor, the Financial Services

Ombudsman’s Bureau.

The Complainant’s Case

The Complainant argues that in May/June 2010, after researching different pension

investment options, he decided to transfer his personal pension plan from a third party into

the Provider’s Gold Fund. The Complainant states that he made it very clear to the Provider

that this was his pension fund and he was very specifically investing in the Provider's Gold

Fund for the long term. The Complainant states that, entirely against his wishes in May/June

2015, the Provider transferred the funds into its high yield fund.

The Complainant argues that the Provider justifies what he refers to as unauthorised actions

based on clause 2(3) of the policy terms. The Complainant states on reading these terms, he

recognises that clause 2(3) falls within the unfair terms in consumer contract rules, as the

provisions are all embracing and unfairly open ended and restrictive.

- 2 -

/Cont’d…

The Complainant submits that his original pension fund was with a third party incorporating

a diversification split of 50/50 between gold and silver. He a rgues that he very consciously

opted for 100% gold for the long term. The Complainant submits that he informed the

Provider that he was not consenting to the proposed change and he did so by contacting it

by email several times during the appropriate timeframe. He argues that the Provider

entirely disregarded his wishes and went ahead and transferred his funds to another entirely

different plan.

The Complainant submits that his fund had already suffered a downturn but he was in the

fund for the long term and an important part of the strategy was that he would wait for the

bounce back from the medium and short term peaks and troughs.

The Complainant alleges that the Provider’s response to his complaint demonstrates an

effective bias against him. He submits that the comparison of the Gold Fund and the

alternative high yield fund at a point in time in December 2015 is irrelevant, given the

intended unexpired medium-term timescale during which the Complainant wished to

remain in the Gold Fund. He argues that the giving of notice is of little relevance or merit to

him. The Complainant argues that instead of closing off the Gold Fund, the Provider could

have geared down the existing Gold Fund over a phased timescale, perhaps while not taking

on any new business for the specific fund.

The Complainant takes the view that this Office is entitled to consider the UTCC Regs in

adjudicating complaints. In the alternative, the Complainant submits that given that the

conduct complained of was the Provider's refusal to provide a financial service, this Office

could still determine that the refusal was unreasonable, unjust, oppressive or improperly

discriminatory in its application to the Complainant.

The Complainant argues that, having been sold a gold product which incurred short terms

losses (as he would anticipate consistent with the product risk-taking), he was compelled to

accept substantial losses as the bottom of the gold performance cycle in 2015. He argues

that he was not given the opportunity to allow his gold product to recover and regain

continuing profitability. He argues that the Provider was aware of his normal retirement

date in November 2017.

The Complainant asked for the Provider to either restore his pension investment into a gold

related fund henceforth as a medium or long term investment or, in the alternative, to

compensate him.

The Provider’s Case

The Provider submits that a review of its investment fund range was carried out in 2015 to

ensure that it offers funds that it believes are most appropriate to all of its customers. It

submits that the objective is having a more focused range of funds available, with greater

potential growth opportunities in the longer term.