Ombudsman attacks poor pensions protection

The Pensions Ombudsman, the legal watchdog, has attacked restrictions on the type of complaints he can investigate and which he says limit his ability to provide protection for pension scheme members.

The office of the Pensions Ombudsman was set up in the early 1990s as an independent adjudicator on points of law, concentrating on how pensions schemes are run. The current Ombudsman, David Laverick, told the Pensions Management Institute (PMI) earlier this month that: "The people who need the law's protection are not those in charge of the funds but those from whom money has allegedly been filched. A legal system which concentrates on preventing alleged maladministration from being called to account is failing the people."

Laverick had wanted to pursue a scheme where pension funds had allegedly been transferred to a bookmaker and distillery. However, he had been prevented from doing so because the transfers had not been carried out by a "person concerned with the administration of" the scheme and so the case fell outside his jurisdiction.

Laverick also used the PMI meeting to call for more security for pension scheme assets through some kind of government-backed guarantee. He pointed out that: "A pension scheme can be given an apparently clean bill of health by an actuary on a Friday, the company concerned can go into liquidation over the weekend and the employees may find on the Monday that despite the scheme having been described as adequately funded there is sufficient money available to pay only part of the promised pensions."