Alloy Sales Limited Executive Pension Scheme · CAS-49148-R5W6

CAS-49148-R5W6

Ombudsman’s Determination Applicant Mr N

Scheme Alloy Sales Limited Executive Pension Scheme (the Scheme)

Respondents Mrs L A Goodwin, Mr C I Goodwin, Mr R Goodwin (collectively ‘the other Member Trustees’)

Embark Group Limited (Embark) trading as Rowanmoor Group plc (Rowanmoor).

Outcome

Complaint summary

Background information, including submissions from the parties The sequence of events is not in dispute, so I have only set out the salient points. I acknowledge there were other exchanges of information between all the parties.

The Scheme is a Small Self-Administered Scheme (SSAS).

A SSAS is a type of Occupational Pension Scheme with fewer than 12 members, all of whom are trustees and take responsibility (together with any professional trustees appointed through the Scheme’s Trust Deed and Rules) for how the scheme operates in accordance with the Scheme’s Rules. 1 CAS-49148-R5W6 The Scheme was originally established with Rowanmoor but Rowanmoor was subsequently purchased by Embark. Correspondence continued to be produced under the Rowanmoor trading name and also by Embark. I have referred to both Rowanmoor and Embark as appropriate.

The Scheme is governed by a Definitive Trust Deed dated 2 November 2006 (the Trust Deed). The Trustees are Rowanmoor in the capacity of Independent Trustee, Mr N and the other Member Trustees.

Clause 8 of the Trust Deed deals with Trustee Meetings.

Sub clause 8.3 states:

“The quorum for a meeting of the Trustees shall be the Independent Trustee and a majority of the Member Trustees…”

Sub clause 8.4 states:

“Decisions at Trustee meetings…must be unanimous. If the Trustees cannot reach a unanimous decision on any matter…the matter shall be referred to an expert unanimously appointed by the Trustees whose determination shall be binding on the Trustees. The costs of any such expert shall be an expense of the Scheme…”

In March 2017, Mr N decided to retire. He says that by agreement with the other Member Trustees it was decided that he should transfer his share of the fund to a separate provider. In return for a fee of 2% of Mr N’s fund value, Rowanmoor agreed to administer the actuarial valuation of the Scheme and to provide Mr N with financial advice.

In July 2017, Mr N transferred £579,399 to Standard Life (the transfer value). Mr N queried why this was less than the original figure that had been quoted of £587,399. He was told that the sum quoted could differ from the actual value but that it had been checked and was the correct figure.

Early in 2018, Mr N had cause to again look at the original transfer value calculation and could see that several errors had been made with the fund split and that it had been incorrectly calculated. He raised these concerns with Rowanmoor.

In March 2019, Rowanmoor agreed it had made an error and there was an underpayment of the transfer value, amounting to £24,839. which was due to his Standard Life pension.

On 23 August 2019, Rowanmoor wrote to Mr N to say that the minimum fund share still to be transferred to Standard Life was £30,634. It said that it was arranging a meeting with the other Member Trustees to enable the required authority to make the transfer. It added that its actuaries were aware that funds were still retained in the Scheme bank account for Mr N’s benefit and that these could not be used by any other member of the Scheme.

2 CAS-49148-R5W6 On 26 November 2019, Embark responded to a complaint apparently raised by the other Member Trustees regarding the administration service provided by Rowanmoor. Embark said that it was upholding the complaint in part because:-

• It agreed that Rowanmoor had overlooked the certain benefit payments when processing the fund split in July 2017.

• As a result, Mr N’s transfer value had been underpaid by £24,839.00.

• While this had been caused by Rowanmoor, the remaining members were only entitled to the correct benefits and not to the figures quoted as a result of the mistake.

• The funds would always have been due to Mr N had the split been produced correctly and it therefore concluded that Rowanmoor should not fund the underpayment.

On 30 December 2019, Embark wrote again to the other Member Trustees. Embark said:

“…the funds held for [Mr N] are required to be transferred to his pension arrangement to complete the transaction. As Trustees, it is important that action is taken to ensure that this is completed as soon as possible…

…As you are aware the bank account is a joint signatory account and the Member Trustees are required to sign the instruction previously issued to effect the transfer.”

On 20 January 2020, Embark emailed the other Member Trustees asking for a response to its letter of 30 December 2019.

On 28 February 2020, Embark responded to Mr N’s complaint regarding the underpayment of the transfer value. Its letter repeated the points made to the other Member Trustees in its letter of 26 November 2019, but said that the other Member Trustees did not agree that the members were only entitled to the correct benefits and not the figures quoted in error and considered that Rowanmoor should fund the underpayment to Mr N.

The Pensions Ombudsman (TPO) has made several attempts to obtain the other Member Trustees’ response to Mr N’s complaint: initially writing to Mr C Goodwin at the company’s address on 30 December 2019, followed up by email on 20 January 2020. Further letters were sent to Mr C Goodwin on 29 September 2021 and 10 November 2021, and to Mr R Goodwin on 12 January 2022. However, no response has been received. Rowanmoor has advised that it also has received no response from the other Member Trustees on the issue of paying out Mr N’s remaining share of transfer value.

3 CAS-49148-R5W6 Adjudicator’s Opinion

• The other Member Trustees had failed to provide their response to Mr N’s complaint. Their position was therefore taken to be as set out in Embark’s letter to Mr N dated 28 February 2020.

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Mr N and Rowanmoor accepted the Adjudicator’s Opinion but the other Member Trustees did not respond and the complaint was passed to me to consider. I agree with the Adjudicator’s Opinion

Ombudsman’s decision

I uphold Mr N’s complaint.

5 CAS-49148-R5W6 Directions Within 28 days of the date of this Determination:-

29.1. Rowanmoor shall:

• recalculate the additional sum due to Mr N; and

• pay Mr N £250 for the serious distress and inconvenience its maladministration caused him.

29.2. The Trustees shall pay Mr N £750 for the serious distress and inconvenience its maladministration caused him.

Dominic Harris

Pensions Ombudsman 18 December 2024

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