Sally says:
What a horrible ordeal you have been through. Fighting for justice over your husband’s pension was the last thing you should have had to face while grieving. It was tough for you to do, while reliving painful memories, but I asked you to provide extra background to put me in the picture properly. You explained that when your husband was tragically given just six months to live he rightly wanted to ensure the best financial arrangements were in place for his family before it was too late.
He asked for help from an adviser who, as you said in your letter, worked for a firm that was later taken over by wealth manager Quilter. He wanted advice regarding the final salary pensions held with his various employers: Fujitsu, EDS and Ferranti. It was decided all three should be transferred into a personal pension plan as this was thought to be more advantageous for you. But these arrangements could not be organised in time.
However, following your husband’s death, the three pension schemes told you that they had not been informed of his terminal illness. Had they known, they could have explained the option of taking a “serious ill-health lump sum”, which would have provided a far bigger payout than transferring the funds to a personal plan.
When you complained, Quilter made you an offer of £60,000 to settle the case, which you rejected. You then started a complaint with the Ombudsman. As you said in your letter to me, the Ombudsman upheld your claim, pointing out that had the ill-health benefits from your husband’s occupational plans been paid, plus a widow’s pension from the EDS scheme, this would have given you an estimated pot of about £736,000. However, the actual sum you were on track to receive was expected to be £450,600 – about £285,000 less.
As a result, the Ombudsman calculated that Quilter should pay you this total estimated loss with interest at 8pc. However, the rules that applied at the time of your original claim meant that although the Ombudsman could recommend a higher sum, the maximum it could legally ask Quilter to pay you was the arbitrary sum of £150,000 plus interest.
You were not happy with this outcome, especially as in more recent times the Ombudsman limit has been increased to a more generous £355,000 for complaints referred to the organisation after April 1 2020, about problems that arose on or after April 2019.
I felt very sorry for you as your husband had endeavoured to do his best by his family at a most difficult time – and it appears that even the Ombudsman, the organisation charged with mediating on such disputes, believed that you had been short-changed. You contacted me in mid-September this year and within a day I had asked Quilter if it would reconsider its position over the level of compensation. I pointed out that while the official rules might limit its obligation to pay the recommended sum, it surely had a moral duty to ensure you were paid in full.
Quilter agreed to go back and investigate the details of the case. Two weeks later it returned with the news I was hoping to hear. A spokesman said: “We have thoroughly reviewed this case and we will pay the redress owed in full. We apologise to his widow, given this would have been a personally upsetting process for her.”
The company said your case had several layers of complexity because of the number of organisations involved, such as your late husband’s former employer and various pension scheme administrators. It added that the adviser had not entered the advice process nor taken any fees when your husband died. It also felt it should not have been the only party to consider the ill-health benefits since your husband’s employer will have known about his poor state of health.
However, the company agreed that there was a failure by the adviser involved for not sending a covering letter to the pension schemes spelling out how gravely ill he was. It is for this reason that Quilter says it has taken full responsibility in order to bring the matter to a close.
You told me you were in shock when I broke the news to you that after my intervention you would be receiving in the region of £285,000. This was £135,000 more than Quilter had agreed to pay following the Ombudsman ruling. It seems wrong to me that there is any limit at all set on the Ombudsman’s awards. Surely the right thing to do is for companies to be compelled to pay the full compensation owed in cases where a claim is upheld.
The money you are due from Quilter is not yet in your bank account, as the compensation calculation, including the 8pc interest owed, is currently being double checked by independent scrutineers and the Ombudsman. Hopefully, it will not be long before the total is finalised and transferred to you.
