26 July 2010
According to an article in the Sunday Telegraph, tens of
thousands of pensioners may have been mis-sold an annuity and could
win compensation because they were not made aware of the Open
Market Option (OMO). An OMO allows the retiree to shop around for
an annuity rather than buy an annuity with the holding pension
arangement.
According to Sackers, a specialist pensions law firm, failure by
organisations who arrange annuities could give rise to complaints
if the retirees were unaware of the OMO and their right to find a
better deal elsewhere.
Campaigners have argued in the past that confused pensioners
have been pushed into annuities without knowing about the OMO
option where healthy retirees could have increased their income
elsewhere and where smokers, overweight people and those people
with medical problems could get income enhancements of up to 30 per
cent or more, depending on their condition.
The Pensions Regulator carried out an investigation about
nine months ago and found that six per cent of money purchase
occupational pension schemes had seriously breached the rules by
not telling scheme members that they could use their funds on the
OMO. Three in ten schemes had breached the rules to a lesser
extent.
The Financial Services Authority (FSA) reported in 2008 that
forty per cent of letters sent by pension providers had breached
regulations when it came to notifying retirees of their right to
shop around.
There is no charge for making a claim and no costs can be
awarded against a person making a claim.
If the complainant is making a claim against the pension scheme
trustees for maladministration, they should complain to the pension
scheme trustees. If they do not receive a satisfactory response,
they can ask The Pensions Advisory Service (TPAS) for guidance.
Similarly, if the complainant is making a claim against the
pension provider for maladministration, they should complain to the
pension provider. If they do not receive a satisfactory response,
they can ask The Pensions Advisory Service (TPAS) for guidance.
Complaints about maladministration can be determined by the
Pensions Ombudsman.
If the complainant is making a claim against an independent
financial adviser (IFA) for maladministration, they should complain
to the IFA. If they do not receive a satisfactory response they can
take their complaint to the Financial Ombudsman Service (FOS).
