The Pensions Ombudsman has rejected a complaint alleging that Alexander Forbes Financial Services (AFFS) misled the complainant into switching from a final salary to a defined contribution (DC) pension scheme.
The complainant, P Walker, claimed he thought he was being given independent advice by an AFFS representative, but AFFS denied it was contracted to give advice.
Walker was a member of the British Petroleum (BP) defined benefit (DB) scheme. In 1998, BP bought chemical firm Blagden Cellobond and transferred Walker to its employment.
At this point Blagden employed AFFS, then known as Johnstone Douglas (JD), as consultants to run a communication service for new employees about transferring their benefits from the BP scheme to the new money purchase scheme.
Walker joined the Blagden scheme and, believing the JD representative was an independent financial adviser acting in his best interest, took BP's offer of an enhanced transfer value (ETV) of his final salary benefits into his DC scheme.
He could have remained a member of the DB scheme and deferred his benefits until retirement.
However, Walker later alleged he did not know his benefits in the BP scheme were guaranteed, index-linked, and provided a 66% spouses' pension, or that he would lose these benefits if he transferred.
He also claimed he did not know transferring from the final salary scheme to the money purchase arrangement would mean taking a higher risk.
Other employees of BP who also transferred their benefits at the same time gave evidence on the information they received from a JD representative during seminars on the transfers.
Several said they believed that the JD representative was an IFA, and that they were not told to seek advice elsewhere.
One said: "The meetings were certainly not factual only and I can recall discussion on at least stopping paying AVCs, drawdown options, and performance."
"The tone was certainly of this being an offer (joining the new scheme) not to be missed and that we were being rewarded by BP. This most certainly was a sellingjob," another testimony said.
Others claimed they did not know they even had the option to stay in the BP scheme.
AFFS said that JD was employed to run an communication service and if any representative had exceeded that brief, the issue would lie outside of the ombudsman's remit.
However, the ombudsman ruled that JD had made it clear that Walker did not have to leave the BP scheme to join the new scheme.
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