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Pensions in Dispute

Pension schemes are complex and even the best-run schemes have to deal with complaints. Knowing how to deal with a complaint can save you time and money and hopefully avoid it becoming a full-blown dispute.

 

Here is your essential toolbox, to make life easier

 

Avoiding disputes: our top ten tips for avoiding disputes are a great starting point and brushing-up on our “how to” guides will help you minimise challenges in areas where complaints typically arise. Our regulatory action guide ensures that you are also aware of potential issues in the regulatory sphere.

Handling disputes: our guide on common member complaints and scheme disputes will keep you up-to-date with best practice where a dispute arises.

Resolving disputes: if you are dealing with a potential dispute, ensure you have our top ten tips on managing disputes to hand. Also, check out our guides to resolving disputes, which looks at resolution procedures, whether internally, via the Pensions Ombudsman or through the courts.

Keep informed: we will keep you up-to-date on key cases and developments.

If you need more help or advice on a specific issue or complaint, please get in touch. Our experts will be happy to advise you. You can read more about our practice here or get in touch with any of our key contacts.

Our top 10 tips ...

... for avoiding disputes

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1. Know your rules

All trustees should be familiar with and refer to their scheme’s rules when making decisions. Don’t rely on scheme booklets or your internal protocols being sufficiently accurate.

2. Watch the clock

Ensure that any statutory deadlines are met without unnecessary delay. Remember that the Pensions Regulator often expects trustees to act in advance of statutory time limits.

3. Communicate carefully

Ensure that all members are given up-to-date and accurate information about your scheme and their benefits, in accordance with the statutory requirements. Avoid jargon as much as possible. Your scheme booklet is particularly important and must be reviewed regularly to ensure consistency with the rules. Changes being made to your scheme should be confirmed in writing to all affected members.

4. Correct your data

When you discover incorrect data in your records, you should check and correct it as soon as possible before (further) problems arise. Aside from the fact that there may be a breach of legal requirements, poor record-keeping can lead to much larger problems, so put robust controls in place to ensure the accuracy of scheme data. Where checks reveal errors, work together with the employer and administrators to take corrective action.

5. Quote with caution

Be clear about what is being quoted in a benefit estimate, and specify any limitations or assumptions made. Is the quote an estimate or a guaranteed figure (and if guaranteed, for how long)? Be alert to anything in a member’s record that could flag potential issues, such as breaks in service or part-time working.

6. Ask the right questions

When you are required to make a decision, you should go about it methodically. Read the relevant rules again so that you direct yourselves correctly. What is the question that needs to be answered? Is it a question of fact or an exercise of discretion? What information do you require to make the decision?

7. Exercise your discretion carefully

Be careful to take into account all relevant factors – ignore anything that is not relevant. Double-check the rules, and use your powers only for their proper purpose. You may need to seek further information or advice to make your decision – don’t be afraid to ask for this! When you inform the member and any interested parties (eg potential beneficiaries) of the outcome, give them enough information to see how you reached your decision.

8. Keep records

Keep a central record of documents that would be necessary to defend a future legal claim (eg booklets, announcements, other communications to members, minutes recording decisions, and all deeds and rules). Complaints often relate to decisions or documents from many years ago – scheme documentation is vital for dealing with such complaints. Ensure that you comply with data protection requirements.

9. Formalities are important

Scheme rules often set out the precise way in which the scheme can be changed. Ensure that those requirements are complied with and that your scheme documents have been properly executed.

10. Seek advice where needed

In any situation, if you are not sure of the appropriate course of action, seek help from your professional advisers, even if the matter is not yet in dispute. Doing so could help you to avoid costly mistakes.

Click here for a printable version

... for managing disputes

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1. Don’t ignore the dispute

Complaints should be addressed promptly. If a complaint is not properly acknowledged and managed at the outset, this may become a ground for complaint to the Pensions Ombudsman in its own right.

2. Use the IDR procedure

Following the internal dispute resolution procedure not only gives the member the chance to articulate a complaint, but helps trustees to resolve the member’s complaint in a structured way.

3. Locate relevant documents

It is important to undertake a thorough search for documents at the outset. This helps assess the strength of the case at an early stage. If relevant documents are missed, you could make the wrong decision in respect of the member’s complaint or embark on unnecessary court litigation.

4. Early assessment

Look carefully at the dispute in question and analyse the strengths and weaknesses of the case and your position in relation to that dispute. If you fail to accurately assess the dispute at the outset and as a result change position at a later date, that inconsistency might damage your case.

5. Legal advice

Check with your legal advisers to ensure that you understand all legal aspects correctly. It is also important to take advice before making any admission of liability or otherwise committing to a disadvantageous position.

6. Retain documents

It is important that relevant documents are retained rather than destroyed, so that they can be disclosed if required by the courts and/or the Pensions Ombudsman. Ensure that you comply with data protection requirements.

7. Trustee protection against risk of costs

It’s important to know who will bear the costs of any action – particularly if you are considering hostile litigation in the courts, where in some circumstances the court may order a party to bear both sides’ costs.

8. Limitation and deadlines

Diarise important dates such as the expiry of any relevant limitation periods and the dates by which certain procedural steps (e.g. filing of documents in court or issuing of IDRP decisions) need to be completed.

9. Involve and inform relevant stakeholders

If a complaint involves other parties (eg the employer) notify them about the complaint in case they have relevant information. If the complaint could result in a claim under an insurance policy, notify the insurers about the claim.

10. Consider any wider implications

An individual member complaint could highlight an issue affecting a wider group. If so, you may want the High Court to resolve the matter so the decision binds all members – a decision by the Pensions Ombudsman only binds the parties to a complaint.

Click here for a printable version

 

1. Know your rules

All trustees should be familiar with and refer to their scheme’s rules when making decisions. Don’t rely on scheme booklets or your internal protocols being sufficiently accurate.

2. Watch the clock

Ensure that any statutory deadlines are met without unnecessary delay. Remember that the Pensions Regulator often expects trustees to act in advance of statutory time limits.

3. Communicate carefully

Ensure that all members are given up-to-date and accurate information about your scheme and their benefits, in accordance with the statutory requirements. Avoid jargon as much as possible. Your scheme booklet is particularly important and must be reviewed regularly to ensure consistency with the rules. Changes being made to your scheme should be confirmed in writing to all affected members.

4. Correct your data

When you discover incorrect data in your records, you should check and correct it as soon as possible before (further) problems arise. Aside from the fact that there may be a breach of legal requirements, poor record-keeping can lead to much larger problems, so put robust controls in place to ensure the accuracy of scheme data. Where checks reveal errors, work together with the employer and administrators to take corrective action.

5. Quote with caution

Be clear about what is being quoted in a benefit estimate, and specify any limitations or assumptions made. Is the quote an estimate or a guaranteed figure (and if guaranteed, for how long)? Be alert to anything in a member’s record that could flag potential issues, such as breaks in service or part-time working.

6. Ask the right questions

When you are required to make a decision, you should go about it methodically. Read the relevant rules again so that you direct yourselves correctly. What is the question that needs to be answered? Is it a question of fact or an exercise of discretion? What information do you require to make the decision?

7. Exercise your discretion carefully

Be careful to take into account all relevant factors – ignore anything that is not relevant. Double-check the rules, and use your powers only for their proper purpose. You may need to seek further information or advice to make your decision – don’t be afraid to ask for this! When you inform the member and any interested parties (eg potential beneficiaries) of the outcome, give them enough information to see how you reached your decision.

8. Keep records

Keep a central record of documents that would be necessary to defend a future legal claim (eg booklets, announcements, other communications to members, minutes recording decisions, and all deeds and rules). Complaints often relate to decisions or documents from many years ago – scheme documentation is vital for dealing with such complaints. Ensure that you comply with data protection requirements.

9. Formalities are important

Scheme rules often set out the precise way in which the scheme can be changed. Ensure that those requirements are complied with and that your scheme documents have been properly executed.

10. Seek advice where needed

In any situation, if you are not sure of the appropriate course of action, seek help from your professional advisers, even if the matter is not yet in dispute. Doing so could help you to avoid costly mistakes.

Click here for a printable version

 

1. Don’t ignore the dispute

Complaints should be addressed promptly. If a complaint is not properly acknowledged and managed at the outset, this may become a ground for complaint to the Pensions Ombudsman in its own right.

2. Use the IDR procedure

Following the internal dispute resolution procedure not only gives the member the chance to articulate a complaint, but helps trustees to resolve the member’s complaint in a structured way.

3. Locate relevant documents

It is important to undertake a thorough search for documents at the outset. This helps assess the strength of the case at an early stage. If relevant documents are missed, you could make the wrong decision in respect of the member’s complaint or embark on unnecessary court litigation.

4. Early assessment

Look carefully at the dispute in question and analyse the strengths and weaknesses of the case and your position in relation to that dispute. If you fail to accurately assess the dispute at the outset and as a result change position at a later date, that inconsistency might damage your case.

5. Legal advice

Check with your legal advisers to ensure that you understand all legal aspects correctly. It is also important to take advice before making any admission of liability or otherwise committing to a disadvantageous position.

6. Retain documents

It is important that relevant documents are retained rather than destroyed, so that they can be disclosed if required by the courts and/or the Pensions Ombudsman. Ensure that you comply with data protection requirements.

7. Trustee protection against risk of costs

It’s important to know who will bear the costs of any action – particularly if you are considering hostile litigation in the courts, where in some circumstances the court may order a party to bear both sides’ costs.

8. Limitation and deadlines

Diarise important dates such as the expiry of any relevant limitation periods and the dates by which certain procedural steps (e.g. filing of documents in court or issuing of IDRP decisions) need to be completed.

9. Involve and inform relevant stakeholders

If a complaint involves other parties (eg the employer) notify them about the complaint in case they have relevant information. If the complaint could result in a claim under an insurance policy, notify the insurers about the claim.

10. Consider any wider implications

An individual member complaint could highlight an issue affecting a wider group. If so, you may want the High Court to resolve the matter so the decision binds all members – a decision by the Pensions Ombudsman only binds the parties to a complaint.

Click here for a printable version

Awards and accolades

Pensions Litigation Firm of the Year

UK Pensions Awards 2019
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Pension Lawyers of the Year

UK Pensions Awards 2019
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Pensions Law Firm of the Year

FT PIPA Awards 2017
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European Pensions Law Firm of the Year

European Pensions Awards 2017
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Best Law Firm

Engaged Investor Trustee Awards 2016
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