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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

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APTi Conference 2011

The Role of the Pensions Ombudsman

Paul Kenny


Why is there a pensions ombudsman
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
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
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
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
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
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
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
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
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
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
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
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
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 ex-employees, pensioners, dependants


Public sector
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
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 three-month deadline

    “to deem the process to be exhausted within its terms”


When a complaint is received
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
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
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
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
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
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
Other Matters, cont’d

  • Staff are Civil Servants in the Service of the State

  • Overall cost €1Million p.a.


Main types of complaint
Main Types of Complaint

  • OTOR:

    • Referral to Ombudsman, Regulator, or out of time

  • 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
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
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 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
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
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 Ombudsman36 Upper Mount St, Dublin 2

  • 01 647 1650

  • 01 676 9577

  • www.pensionsombudsman.ie

  • [email protected]


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