Transcript Presentation by the Pensions Ombudsman

LIA
The Role of the Pensions
Ombudsman
Paul Kenny
25 November 2010
What is an Ombudsman?
ombudsman (plural ombudsmen)
• An appointed official whose duty is to investigate
complaints, generally on behalf of individuals such as
consumers or taxpayers, against institutions such as
companies and government departments.
• A designated internal mediator in an organization whose
duty is to assist members with conflict resolution and
other problems and to serve as independent consultant
to recommend changes to policies or procedures to
improve organization effectiveness and efficiency.
- Wiktionary
Less Formality
• An Ombudsman is able to investigate and
determine complaints with greater speed
and flexibility and with less formality than
would be the case with the Courts
• The Ombudsman service should be
available free of charge to the consumer
/taxpayer /customer
Why is there a Pensions
Ombudsman?
• To fill a gap in the Pensions Act: Pensions Board can
investigate, prosecute, but not order redress if financial
loss incurred
• Pensions (Amendment) Act 2002Pensions Ombudsman
office established
– To investigate complaints of maladministration in relation to
pension schemes, PRSAs and “Trust RACs” (group selfemployed arrangements)
– To award redress in case of financial loss
– To decide matters of fact or law
• Maladministration and non-compliance with the Pensions Act are
not always the same thing
The legal angle
• 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
*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
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
* SI No 397 of 2003
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….
Whichever is the later
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 –
Regulations amended - this option is available
only in the private sector
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
Time Scale
• “Relevant Person” – i.e., Trustees,
Minister or PRSA Provider has
• Three Months from receipt of all
necessary information, to furnish
• Notice of Determination
What Happens in Practice?
• Complainants Don’t know about IDR
– Write to the Ombudsman
– Told about IDR and possible exceptions
– Apply for IDR ……………..
• Do the trustees know about IDR?
• Who’s the consultant?
• Is there a consultant?
– WE WILL WRITE TO THE TRUSTEES
And send them our booklet…..
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?
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
• 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
Persistent Complainants
Often my office is the last resort
- all other avenues exhausted
“Forum Shopping” doesn’t work
“Querulous Paranoia”
Sources of Complaints
• Public Sector, 47%
– But some may be generic
• Private Sector, 53%
• PRSAs – 2
• Total complaints, 2004: 298.
•
2005: 389 (+31%)
•
2006: 439 (+13%)
•
2007: 515 (+17%)
•
2008: 758 (+47%)
•
2009: 1760 (+71%)
•
2010: Down about 25%
Main Types of Complaint
• OTOR:
– Referral to Ombudsman, Regulator, or out of time
•
•
•
•
•
•
•
Post-retirement increases / Parity
Failure of scheme to respond
Membership/Entry Conditions
Calculation of Benefits:
Failure to remit contributions
Failure to Include in scheme
Failure to grant early retirement – solvency issues
What We Have Learned
• Public Service Admin is uneven
– Some Departments centralise, some don’t
• Loss of expertise
• Reluctance of people to stay in
Superannuation Section
– Promotional criteria a problem here
• Specialist Staff means fewer problems
– Need for recognition
What we have learned, continued
• Investment – “proper investment”
• Disinvestment of AVCs and DC in winding-up
– Can the trustee ever be right?
• Amalgamation of (DC) AVCs with DB fund
• A considered decision, or just laziness?
• “Having regard to the nature and duration of the
liabilities” is just a new way of saying something
very old:
“The duty of a trustee is not to take such care only as a prudent man would
take if he had only himself to consider; the duty rather is to take such
care as an ordinary prudent man would take if he were minded to make
an investment for the benefit of other people for whom he felt morally
bound to provide”. Learoyd -v- Whiteley, 1887
Investment and the member
• Many don’t know (or forget) how their
money is invested
• They should be reminded
– Option statements
– Annual Benefit statements?
– Communications re winding-up
• Is it enough to name the fund, or should
we be more specific?
• Do some employers/trustees offer too
narrow a range of options?
– Is “Lifestying” universally available?
Other Problems
• Failure to wind up promptly
• AVCs not administered with main scheme
benefits
• Public service AVCS – pensionable -vactual service
• Early Retirement – ill health and normal
– Deferred beneficiaries given options
previously
– Last-minute AVCs now locked in
Not all complaints are serious
- to start with
• Some should never get to my office, but
escalate due to
– Poor communication – both ways
– Lack of knowledge of trustee duties
– Failure to take complaint seriously
• And some were never serious in the first
place
– Failure to switch investment in less than 5 days
• Thursday to Monday!!
– The Great PO Robber
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?
Reporting, Legal Proceedings
• 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
• Power to Enforce Determinations
Questions?