TPO refers pension scheme to TPR over failure to pay death benefits

The Pensions Ombudsman (TPO) has referred the Timoran Capital small self-administered scheme (SSAS) to The Pensions Regulator (TPR), after concluding that the scheme trustee failed to pay death benefits within a reasonable timeframe.

The ombudsman found that the trustee, Tristram Norriss, had failed to pay death benefits to the estate of Mr K within a reasonable timeframe, and ceased to properly administer the scheme.

The scheme, which held cash of £60,000 on Mr Ks behalf, previously invested £140,000 into Dolphin Capital through a five-year loan note returning a fixed rate of 13.8 per cent in August 2014.

However, on 23 January 2017, the scheme was informed that by Mr K's daughter, Ms N, that he had been diagnosed with terminal cancer and had less than 12 months to live, with a request that the Dolphin Investment be disinvested and the remaining £60,000 in cash paid to Mr K as soon as possible.

In June 2017, Dolphin wrote to Mr K to confirm that it would waive the investment redemption date and allow him to redeem £40,000 of the loan note immediately. Mr K died on 6 July 2017.

Around six months later, on 14 January 2018, the scheme administrator, Mark Carter, informed Ms N that he had been chasing the scheme trustee, Tristram Norriss for timescales for the payment of benefits, but had received no response, prompting Ms N to reach out herself to highlight the urgency of the situation.

Norriss responded on 17 January 2018, explaining that he was doing what he could for the pension to be settled, and that whilst he had achieved an ex gratia payment from Dolphin prior to Mr K’s death, the remaining funds held by Dolphin would not be returned until the due date on the loan notes.

He also reassured Ms N, however, that the funds would be paid out along with the cash with interest, providing an estimate of £187,000.

Ms N followed up further in January 2018, particularly in relation to the payment of the £60,000 held in cash, suggesting that the situation was causing sleepless nights due to the lack of information.

On 29 January 2018, Norriss informed Ms N that he would make further enquiries with Dolphin about possible further payments and on confirmation of this they would establish a date for settlement.

Ms N requested another update on the situation in September 2018, but received no updates despite chasing, including a separate request for an update sent by Carter in November 2018.

Norriss responded to Ms N in December 2018, suggesting that work to resolve the issue and make the appropriate payments was underway and that the parties should “work together to ensure the result we all expect in 2019”.

Ms N submitted a complaint about the non-payment of death benefits in February 2019, however, which was then referred to TPO.

The ombudsman confirmed that, despite multiple requests for information via email and post, it has received no responses from Norriss, concluding in the absence of any defence that his inaction in the case was "maladministration and a breach of trust".

"I also find it is maladministration for Mr Tristram Norriss not to have responded to Ms N’s complaint and to have ignored my office’s requests for information,” the ombudsman, Anthony Arter, said.

Arter confirmed that whilst such failures would typically warrant a distress and inconvenience award, he was unable to direct a distress and inconvenience payment in this case as Ms N is complaining in her capacity as the executor of Mr K’s estate.

However, Norriss has been ordered to produced a full account of the benefits attributable to Mr K’s share of the scheme at his own cost.

He is also required to pay the cash benefits attributable to Mr K’s share of the Scheme and any recovered sums from the Dolphin Investment to Ms N as executor of Mr K’s Estate, plus interest at 8 per cent per annum from 6 July 2017 to the date of payment.

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