APTi Conference 2011
The Role of the Pensions
Ombudsman
Paul Kenny
Why is there a Pensions
Ombudsman?
• The Pensions Act, 1990, was the first attempt to
regulate the conduct of Occupational Pension
Schemes
• Pensions Board set up as the Regulator
• Criminal offences created
• Extensive powers of investigation into “state and
conduct” (S.18)
• Can Prosecute offences under the Act
Why is there a Pensions
Ombudsman? -2
• To fill a gap in the Pensions Act: Board can
investigate, prosecute, but not order redress:
• In 2002, Office of the Pensions Ombudsman
established (Pensions Amendment Act, 2002)
– To investigate complaints of maladministration in
relation to pension schemes and PRSAs
– To award redress in case of financial loss
– To decide matters of fact or law
• Maladministration and non-compliance are not always the
same thing
The Legal Position
• Determinations are binding on all parties
• Can be enforced by Order of the Circuit Court
- on the
application of the Complainant or of the
Pensions Ombudsman*
• May be appealed to the High Court within 21 days
• PO can prosecute for failure to provide information
&c.
Enforcement Orders also possible in these cases
*Minister SFA pre-March 2010
Who Can Complain?
• an actual or potential beneficiary
– a member or a former member
– a surviving dependant
– a person claiming to be a member or a
surviving dependant
– a contributor to a PRSA
– a personal representative of a member or
contributor
– a widow or widower of a member or
contributor
– If a person cannot act for themselves, a
representative may make the complaint
– No charge to complainants
Against Whom?
•
•
•
•
Former / trustee
Former / employer
Former / PRSA provider
Other category “to be prescribed”
– That means Regulations – Statutory Instrument
• Regulations: “Administrator” includes persons
•
•
•
•
Providing administration service
To whom S.59 duties delegated
Interpreting or applying scheme rules
To whom PRSA provider has delegated
Time Limits
• If event complained of occurred before
“Appointment Day” (28 April, 2003),time limit is
six years back from date of signature of 2002
Act* – i.e., 13 April 1996.
• If post- Appointment Day, either
– Six years from the date of the event, or
– Three years from the date complainant knew or ought
to have known….
*Pensions (Amendment) Act 2002
This is being tested…
• Complaint regarding failure to pay benefits
• Benefit vested (Leaving through no fault)
many years ago
• Benefits surrendered by ER/Trustee in
March 1996
• PO has taken the view that “action” in this
case is failure to pay the benefits when
they fell due under the rules – ongoing
trustee duty, not discharged
• Trustee has appealed - Judgment awaited
Before a Complaint is Taken
• Internal Disputes Resolution
• Complaint in writing
• To trustees (Occupational Pension
Scheme and Trust RAC)
• To Minister (Public Authority)
• To Provider (PRSA)
Unless……
• Dispute or complaint already subject to
investigation by the Board
– Which certifies
– “completed or terminated…………”
• Scheme in Winding Up
• Frozen Scheme with no Employer trading
• From 2006, if PO thinks it appropriate to waive –
this option is available only in the private sector
Exhaustion of IDR
• After three-month deadline has passed, PO
may consider the IDR process to be
“exhausted within its terms”, and proceed to
investigation
• Also applies to the Public Authority schemes
Complaint Considered by
“Appropriate Person”
• Notice of Determination in writing
• Conditions to be met
– WHAT HAS BEEN DECIDED….
– WHAT IS RELIED UPON IN DECIDING….
– THAT COMPLAINANT IS NOT BOUND…..
– BUT CAN TAKE THE PROBLEM ONWARDS
Structure of IDR
Considerations in Ireland:
• Simple
• User-friendly
• Saving time
• Trustees can decide structure of IDR procedure
appropriate to scheme - size, circumstances
• IDR result not binding on the complainant
Practice Varies
• Some schemes have good and established IDR
processes –e.g.,
– Expert adjudicator recommends solution
– Committee considers and recommends
• If not, advice is available
• IR machinery may not be suitable for Pensions
• Trustees and HR people need to understand IDR
requirement may not suit established “Grievance
Procedures”
• Employment grievance procedures not open to exemployees, pensioners, dependants
Public sector
• Would prefer not to be mixed up with this
• Traditionally appeals take time – 3 month limit!
• Local expertise may be absent
– Or people don’t want to know
• Appeals procedures not defined; e.g.,
– S. 11(5) “…may appeal to the Minister…..”
– Information sometimes not readily available
(though required by Disclosure Regulations)
Failure to Operate IDR
• Breach of the Pensions Act
• Criminal Offence
• But sanction on employer / trustee does not give
redress to the complainant
• PO now has discretion after the expiry of threemonth deadline
“to deem the process to be exhausted within its terms”
When a complaint is received…
• Preliminary Examination
– Is IDR required or to be waived?
– Is the complaint within terms of reference?
– If not: divert to DSFA, FSO, Pensions Board,
Financial Regulator, Equality Tribunal
• MOUs
– If within jurisdiction, can the problem be
solved quickly – intervention, mediation, even
explanation?
Powers
• To Summon witnesses
• To require production of documents
• Powers and privileges of the High Court
– Witness immunities and privileges
– Statement/admission not admissible in criminal proceedings
• To state a case to the High Court
• To make report on investigation
– Absolute privilege in Defamation
• To decide on Jurisdiction
• To exchange information with Board and Revenue
Commissioners
Investigations
• Respondents notified
• Papers copied to all known to be involved
– Invited to name anyone with an interest
• Investigators follow up
• Oral Hearings possible – complainants often
request them but they are seldom granted in
practice - usually what they actually want is a
meeting
Oral hearings
• Evidence under oath
• May be held in public
• Not often used – Usual conditions:
– Dispute of fact not solved from the
papers
– Person’s good name at stake
– Conflict of evidence – veracity of
witnesses
• These conditions are published on the
Website
Determination
• Pensions Ombudsman may give Preliminary
View
– Time allowed for parties to respond to this
• PO makes Determination
• Final and binding – can be enforced by Circuit
Court Order
• Appeal to the High Court within 21 days
Other Matters
• Jurisdiction may overlap with that of Pensions
Board, Financial Services Ombudsman,
Financial Regulator, Equality Tribunal
• Memoranda of Understanding with FSO, Board,
Regulator, Revenue Commissioners, ODCE
• MoU with UK Pensions Ombudsman – joint
jurisdiction
Other Matters, cont’d
• Staff are Civil Servants in the Service of the
State
• Overall cost €1Million p.a.
Main Types of Complaint
• OTOR:
– Referral to Ombudsman, Regulator, or out of time
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Failure to remit contributions (106 - + 49%)
Calculation of Benefits: (104 - -8%)
Fund values (34 – -59%)
Problems with Winding-up (22 - +57%)
Purchase of added years (public sector) (44 - n/c)
Disclosure of information (25 - -49%)
Failure to grant early retirement – solvency issues
and ill health (37 – n/c)
Overall 2010 down 25%; 2009 up 71%; 2008 up 49%
Compliance with Pensions Act
• Most trustees and employers comply with most of the
Act
• Most Common failure is in disclosure of information
• Worst failure is in remittance of contributions
– S. 58A requires employers to remit all contributions (DC) or
employee contributions (DB) within 21 days of month end
– Confirm remittance, e.g., on payslip
– Extra disclosure in new Regulations
• Theft of contributions
Disclosure of Information
• Many complaints lie in failure of communication
• Merely to adhere to the Disclosure
Requirements does not represent high quality
communication
• Quantity -v- Quality
• Regulation and supervision – small print
– Legally correct but incomprehensible
– What’s wrong with using English?
Not all complaints are serious
– Not pensioned on all of his service – shortfall in
benefits
• Misinformation on transferred service – overstated by 100
days - “loss” was €3.38 per fortnight
• PO cannot compensate for loss of expectation
– Civil servant missing pension credit for ONE
day of his service
• It was a strike day
– One man complained that trustees hadn’t told
him inflation would erode the value of his
pension
– Complainant insisted on being paid by cheque,
then complained compensation for EFT not
included in pensionable pay
Reporting
• Reports are absolutely privileged
• Annual Reports and Digest of cases
– Protection of identities
– Name and shame?
– If Complainant goes public….
• Prosecutions for non-production of information
– Criminal sanctions
• Applications for enforcement of discovery
Legal Proceedings
• Apart from appeals and JR, prosecutions in the
District Court for failure to comply with
requirement for information
– 9 convictions in 2010
– Fines €200-3500; costs €1300- 2300
– One under appeal to Circuit Court
• Power of Enforcement
– Primary enforcer should be the Complainant
– Application to circuit Court
– Minister’s Power to apply now given to PO
• Office of the Pensions Ombudsman
36 Upper Mount St, Dublin 2
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01 647 1650
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01 676 9577
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www.pensionsombudsman.ie
•
info@pensionsombudsman.ie