Mr C was advised by a representative of Reliance Mutual, now Utmost Life & Pensions, to transfer his Armed Forces final salary scheme into a Reliance Mutual personal pension in 2000. Following conversations with the financial adviser, who informed Mr C that by transferring he would achieve “better growth” of his pension, Mr C transferred £14,834.63. However, Reliance Mutual failed to inform Mr C of the benefits of his final salary scheme, which included a guaranteed pension and spousal benefits for Mr C’s wife.
Mr C advised that if Reliance Mutual had clearly explained the benefits of his Armed Forces scheme and the loss of these benefits by transferring, he would not have transferred away.
A complaint was sent to Utmost Life & Pensions to investigate the advice given in 2000. Utmost Life & Pensions investigated and rejected the complaint, alleging that Mr C was fully aware of the benefits he would be giving up.
As they did not agree, the complaint was referred to the Financial Ombudsman Service (“FOS”) for consideration. The FOS provided their initial decision, upholding the complaint. They agreed that the pension transfer was not in Mr C’s best interests.
Reliance Mutual did not act fairly, as there were significant risks involved in transferring into a personal pension. These included the risk of whether or not the new scheme would match the benefits that the client would have received from the Armed Forces scheme.
Furthermore, the FOS agreed that Mr C’s future plans should have been considered by Reliance Mutual before advice was given. Utmost Life & Pensions then accepted the FOS’ findings and awarded Mr C £105,199.64, which he accepted.