Stream International Ni Ltd Employee Benefits Plan · CAS-59303-Y0Z8

CAS-59303-Y0Z8

Ombudsman’s Determination Applicant Mr Y

Scheme The Stream International (NI) Ltd Employee Benefits Plan (the Scheme)

Respondents Aviva; and The Trustees of the Scheme (the Trustees)

Complaint summary

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Summary of the Ombudsman’s Determination and reasons

Detailed Determination Material facts

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• Aviva was not the administrator for Lifesight and it did not provide document services. Only the Trustees would have access to obtain the HMRC certificate.

• A BANCS report would need to be requested through “BTS” to identify any transfer in details for this scheme number, if the information was not available from previous trustee reports and accounts.

• The investment funds available for Lifesight are set and available for the Trustees to check if they meet the eligibility.

On 18 September 2020, the Trustees emailed Mr Y and confirmed they wished to proceed with the transfer and had filed a request for the HMRC certificate but did not have access to this.

On 30 September 2020, Aviva emailed WTW and confirmed it had requested a copy of the HMRC certificate to facilitate the transfer and would provide this as soon as it was available.

On 6 October 2020, and 13 October 2020, Mr Y chased Aviva for further information regarding his complaint and his transfer. 6 CAS-59303-Y0Z8 On 14 October 2020, Mr Y submitted an application to The Pensions Ombudsman (TPO).

On 15 October 2020, Aviva sent an email to the Trustees which asked for an update regarding the HMRC certificate.

On 16 October 2020, the Trustees sent an email to Aviva which confirmed the PSTR number.

On 21 October 2020, Mr Y requested a call from a manager at Aviva. Aviva contacted Mr Y. Mr Y said the Trustees had sent the outstanding information to Aviva on Friday 16 October. Mr Y said he was unhappy with the speed of responses, lack of updates and the £300 offer. The manager undertook to find out what had been received by Aviva and to proceed if it was everything that was needed. Mr Y requested a further update by the beginning of the following week.

In fact, the Trustees had only sent the PSTR number and had not sent the required screen print from the HMRC online system. So, on the same day, Aviva sent an email to the Trustees and confirmed it already held the PSTR number, but WTW would not accept this in place of an actual HMRC certificate or screenshot of the Scheme details from the HMRC online system.

On 23 October 2020, Aviva chased the Trustees for a response.

On 24 October 2020, Aviva received a response from the Trustees. They said that they had provided the PSTR number from the pension scheme filing and asked how they could obtain the actual HMRC certificate. The Trustees also queried why they could not simply provide authorisation for the transfer themselves, given that the Scheme was their pension plan.

On 26 October 2020, Mr Y sent an email to the Trustees, which was copied to Aviva. He complained of the service given by Aviva and said he believed that Aviva had done nothing to assist in the request to obtain the HMRC certificate and that if anything it had delayed the process. He noted that the Trustees had provided the PSR and PSTR and that he would have expected that Aviva would have been able to “run with this information” and call HMRC then be able to come up with “something” going forward.

On 27 October 2020, Aviva sent an email to Mr Y and the Trustees. This provided a timeline of correspondence. It also attached the example screenshot that WTW had provided as guidance as to what was required. Aviva stated that it had tried to contact HMRC by email and telephone, but that HMRC would not give access for Aviva to obtain the outstanding information as these were the Schemes details rather than Aviva’s.

On the same day, the Trustees replied by email and said they had tried registering with HMRC but had not received the necessary access codes. They also queried the example screenshot as it did not relate to the Scheme.

7 CAS-59303-Y0Z8 On 28 October 2020, Aviva confirmed that the example screenshot was provided only to show the format that was required by WTW.

On 30 October 2020, Aviva emailed the Trustees and Mr Y regarding the advice it had received from HMRC. As Aviva was not the Trustees or the scheme administrator (as defined under section 270 of the Finance Act 2004), HMRC could not confirm the PSTR to it directly. The email included links to guidance on how to register the Scheme for HMRC’s online system.

On 2 November 2020, the Trustees confirmed that they had tried registering the Scheme with HMRC, and that they had been informed that a registration number would be sent by post, but this had not been received.

On 11 November 2020, WTW sent a letter to Aviva and reiterated the information it required to proceed with the transfer.

On 18 November 2020, Aviva emailed Mr Y. It said the HMRC certificate was still outstanding, and, without this, it would be unable to complete the transfer. The challenge was that Aviva could not obtain this information from HMRC and could not proceed with the transfer without it.

On 1 December 2020, the Trustees emailed Aviva and said HMRC had notified them that it did not have a certificate in relation to the Scheme, as the Scheme originated before 2006. The relevant approval letters had also been destroyed after seven years so no copy remained.

On 11 December 2020, Aviva contacted Mr Y and concluded its previous response was appropriate. It said it could not do anything further until it had received all the necessary information and documentation from the Trustees.

On 21 December 2020, the Trustees contacted Aviva and asked for a copy of Lifesight’s policy document.

On 30 June 2021, WTW contacted Aviva, and informed it that, as it had not received the HMRC certificate or a screenshot of the current Scheme details, it was not in a position to proceed with the transfer. WTW asked Aviva what the Scheme had provided to others in the past to allow for other transfers to occur.

On 1 July 2021, the Trustees contacted Mr Y with an update, informing him that no HMRC certificate existed in respect of the Scheme.

On 7 July 2021, Mr Y submitted a complaint to the Trustees under Stage One of the Scheme’s Internal Dispute Resolution Procedures (IDRP).

On 29 July 2021, the Trustees confirmed with Aviva that a certificate did not exist and informed Aviva that HMRC had advised them that the certificate reference number and PSTR number would be sufficient for the transfer of Mr Y’s funds to proceed.

On the same day, Aviva confirmed it had only received one previous transfer into the Scheme for other members, however as this had been an internal transfer it had 8 CAS-59303-Y0Z8 proceeded on the basis of the PSO approval number, which showed that the Scheme had been approved by HMRC prior to 6 April 2006.

On 10 September 2021, the Trustees provided Mr Y with their Stage One IDRP response. The Trustees said:

On 1 March 2022, Aviva confirmed it had been unable to provide the HMRC certificate to finalise the transfer as the Trustees had been unable to provide this due to issues it was having with the HMRC website.

Mr Y continued to accrue benefits in the Lifesight scheme, including contributions from his then employer, until February 2022.

On 20 February 2023, Mr Y commenced employment with Babcock. The occupational pension scheme available to him in this employment is the Babcock International Group Pension Scheme – Babcock Retirement Savings Scheme (Defined Contribution Section) (the Babcock Scheme).

Mr Y requested a transfer of his Lifesight benefits to the Babcock Scheme and this transfer was made on 15 March 2024.

Following the complaint being referred to TPO, Mr Y, Aviva, and the Trustees made further submissions that have been summarised below.

Mr Y was a former employee of Stream International (NI) Ltd and had deferred benefits in the Scheme. He wanted to transfer the pension that he had in Lifesight to the Scheme.

His complaint fundamentally related to the failure to provide the information requested by WTW so that the transfer from Lifesight could be completed.

He was concerned Aviva may not have undertaken the proper due diligence on the Scheme as the company name had changed. He was also concerned about what would happen if any of the other companies became insolvent.

He was unsure whether the proper roles for the employer, the Trustees and Aviva had been explained during numerous telephone calls.

9 CAS-59303-Y0Z8 He was unhappy with the poor service he had received from Aviva and that it had failed to call him back as requested on several occasions.

The Trustees had still not provided the required information.

Aviva made the following additional submissions:-

Mr Y’s concerns related to the lack of details provided by Aviva in relation to the Scheme, as well as the poor service received.

Approved pension schemes which already existed on 5 April 2006 were deemed to be registered pension schemes from the following day and the scheme administrators would have been automatically issued with a PSTR number by HMRC in order to print out a HMRC certificate.

It took time to get the PSTR number and it was still liaising with the Trustees to get the information required by WTW.

The Scheme had been set up by Stream International in 1998 and was initially held by Friends Provident. Friends Provident was later taken over by Aviva and the Friends Provident plans, such as the Scheme, were classified as ‘heritage schemes’. Aviva often found that details for heritage schemes were not up to date. It undertook due diligence periodically to find out if there had been changes in trustees or scheme contacts but would not be aware of any company name changes unless informed of that under an addressee contact. If the Scheme name was still the same and the Scheme only held benefits for employees who had worked at the company when it was called Stream International, the company name would not need to be amended with Aviva.

The Scheme was relatively small, with only up to 150 members, most of whom were no longer active. So, the Trustees may not have received many, or any, transfer requests of this nature, which may help to explain why the Trustees had been unprepared.

The lack of understanding shown by the Trustees regarding their legal obligations to know HMRC requirements may be explained by the Trustees having been replaced during company transitions over the years. Aviva asked for HMRC guidance on registering pension schemes, so that it could assist the Trustees. It could not do anything further to assist the Trustees but would continue to chase HMRC.

Aviva concedes that its lack of updates and failed call backs to Mr Y were unacceptable. While calls up until 29 July 2020 were handled well, Aviva could have explained the process more clearly. The call held on 18 August 2020 was unacceptable and Aviva was aware of the distress this caused Mr Y. It also apologised for the call handler’s failure to call Mr Y back and stated that this had been fed back to that call handler.

10 CAS-59303-Y0Z8 It had not been possible to transfer the funds to Aviva in the absence of the Scheme being registered with HMRC. The Trustees are responsible for the day-to-day management of the Scheme.

Stream International Ltd had changed its company name to Concentrix Group and moved to America, although there was no change to the main contact for the Trustees at Concentrix.

Even so, HMRC had been able to give the Trustees the necessary information for the Trustees to obtain the HMRC certificate.

Mr Y’s concerns regarding the details held for the Scheme have now been resolved, with an up-to-date deed being executed and the Trustees’ details being updated on Aviva’s records. However, no further progress had been made with the HMRC certificate and it had not heard from the Trustees regarding this. It had asked the Transfers Team to pick this up.

Aviva initially intended to send a cheque or make an electronic payment for £300 for distress and inconvenience caused. It later increased its offer to £500 as an apology for poor service offered throughout June to August 2020.

Any financial loss that may have occurred as a result of the transfer not being completed would need to be assessed once it has been completed. This was because fund values continued to fluctuate, and Aviva could not know the correct calculation to use until the date of the final price.

Aviva could only be held liable for the delays between July 2020 and September 2020. The subsequent delays have been solely due to the outstanding HMRC certificate.

The Trustees made the following additional submissions:-

The Trustees had chosen to exercise their discretion to receive a transfer of Mr Y’s pension from Lifesight and provided the PSTR number to Lifesight for this purpose. However, as the administrator of Lifesight, WTW had insisted on evidence of the Scheme’s PSTR number. Providing that evidence has proven complicated for the Trustees.

Initially, WTW had insisted on obtaining the Scheme’s HMRC certificate. After investigation and correspondence with HMRC, Aviva and the Trustees established that no such certificate existed for the Scheme.

WTW revised its request and asked to be provided with a screen-print of the “Current Scheme Details” from Pension Schemes Online (which is the HMRC’s online system).

The Trustees sought advice and then took steps to register the administrator of the Scheme with Pension Schemes Online and to register the Scheme under the

11 CAS-59303-Y0Z8 administrator. The Trustees experienced delays in receiving the necessary information and activation codes from HMRC.

As of 18 February 2022, the Trustees were in correspondence with HMRC to finalise the Scheme administrator details and hoped to be able to provide the screen-print to WTW within “two to three weeks”.

In relation to the offer of redress, Mr Y did not quantify the total financial loss he suffered as a result of the delay or provide any evidence of his loss. The Trustees did not have an insight into the value of transferring benefits or the assets in which Lifesight’s funds were invested.

Given that there was insufficient information to allow the transfer to proceed, the Trustees would have expected Lifesight’s funds not to have been disinvested.

The Trustees apologised for the time it had taken to resolve the matter. Whilst some of the delays stemmed from other parties (HMRC and Aviva) they acknowledged that they had not dealt with the matter as promptly as possible and offered Mr Y £1,000 for non-financial injustice.

The Adjudicator’s Opinion

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Further Submissions from Aviva

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Further Submissions from the Trustees

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Following a request for information from TPO as to the steps taken after January 2022 and whether any of the Trustees had been successfully registered with HMRC as Scheme Administrator, the Trustees set out that:

I issued a Preliminary Decision (PD) in April 2025.

Conclusions - Preliminary Decision

Negligence – the Trustees

19 CAS-59303-Y0Z8 that they owed a duty of care to Mr Y in respect of the particular matter; that the purpose or scope of the duty was to protect him from the type of risk or loss he suffered; • that the duty of care was breached; and • that the breach caused a foreseeable loss to Mr Y of the type that the law required them to protect him from. Duty of Care

In Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 (Henderson v Merrett) the House of Lords considered (inter alia) whether Lloyd's underwriting members' agents and the managing agents of syndicates had a liability in tort towards those 20 CAS-59303-Y0Z8 underwriting members who had suffered losses. Any action under contract was time barred.

The House of Lords held that the agents and the managing agents owed a duty of care to the underwriting members, to prevent them from suffering relational economic loss as a result of negligent management. Further, a duty of care to prevent relational economic loss arises where a person (A), who renders professional or quasi- professional services, voluntarily assumes responsibility for another person’s economic interests, knowing the other relies upon (A) to provide those professional or quasi-professional services with reasonable care.

For such a duty to exist, there must be both a voluntary assumption of responsibility and a concomitant reliance by the person who suffers the loss.

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• Damage which is foreseeable; • A sufficiently proximate relationship between the parties; and • For it to be fair, just and reasonable in all the circumstances to impose a duty of care.

Foreseeability

"As I have already mentioned, it is almost always foreseeable that someone, somewhere and in some circumstances, may choose to alter his position upon the faith of the accuracy of a statement or report which comes to his attention and it is always foreseeable that a report - even a confidential report - may come to be 22 CAS-59303-Y0Z8 communicated to persons other than the original or intended recipient. To apply as a test of liability only the foreseeability of possible damage without some further control would be to create a liability wholly indefinite in area, duration and amount and would open up a limitless vista of uninsurable risk for the professional man.”

“As I have already suggested, "proximity" in cases such as this is an expression used not necessarily as indicating literally "closeness" in a physical or metaphorical sense but merely as a convenient label to describe circumstances from which the law will attribute a duty of care. It has to be borne in mind that the duty of care is inseparable from the damage which the plaintiff claims to have suffered from its breach. It is not a duty to take care in the abstract but a duty to avoid causing to the particular plaintiff damage of the particular kind which he has in fact sustained.”

Scope of the duty

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However, Aviva concedes that there were shortcomings in the service it provided to Mr Y in the period June to August 2020. It has acknowledged that the telephone call of 18 August 2020 was unacceptable and that it caused distress to Mr Y. Aviva has also acknowledged that there were other failings in its communication with Mr Y, including occasions where it failed to provide updates.

Aviva informed Mr Y that it had addressed the call of 18 August 2020 with the employee concerned. It also offered redress; first of £300 and later of £500 to recognise the distress caused.

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I issued a Preliminary Decision (PD) in April 2025. Mr Y, the Trustees and Aviva responded to that Decision as detailed in paragraphs 248 to 253 below.

Mr Y’s representations

The preliminary decision should be reviewed and overturned to elevate the non- financial injustice redress from the severe category to the exceptional category.

Aviva’s representations

Aviva agreed with the findings and had no further comments. It contacted Mr Y separately and made payment, as stated in the PD, of £500 within 28 days of the PD being issued.

The Trustees representations

The Trustees confirmed that it agreed with the findings and had no further comments.

Conclusions As no party has raised questions or concerns about my preliminary decision, all parties have agreed with the outcome.

The only additional submission provided by Mr Y was that an increase should be applied to the distress and inconvenience award to reflect the exceptional non- financial injustice he says he experienced. In line with my guidance on non-financial injustice, I disagree that an increase should be applied and find that the severe category is reasonable and justified in the circumstances.

27 CAS-59303-Y0Z8 I uphold Mr Y’s complaint in part.

Directions

Camilla Barry Deputy Pensions Ombudsman 12 June 2025

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