The Pensions Ombudsman (“TPO”) has recently published a blog on a review it has undertaken of its operating model and how this will impact the pensions industry moving forwards in terms of resulting actions and changes. 

This is the first in a series of blogs that TPO intends to publish outlining the changes that it will be making as part of “a clear plan for tackling our historical caseload and reducing our queue lengths and waiting times”. This first blog focuses on how TPO interacts with pension schemes and pension providers’ own complaint processes.

A requirement to go through IDRP before coming to TPO

The blog notes that one of TPO’s priority workstreams is looking to tighten up its requirements for new complaints into TPO. 

TPO has seen a significant increase in demand for its service over a number of years, and this is only set to keep increasing. TPO feels that its ability to appropriately consider and resolve disputes within a reasonable time period in future is being threatened as a result, as the current demand for service is already outstripping capacity. And this is without even considering the expected future increase in demand.

Therefore, TPO intends to introduce a requirement for complainants to go through a pension scheme’s IDRP first before complaining to TPO. As mentioned, this is described as the first of multiple tactics to help reduce decision wait times and progress case backlogs. 

The blog explains the rationale for this change as follows - “We know that many of the pension complaints we currently receive could and should be resolved under an internal resolution process, without the need for TPO input — and this change will empower schemes to do just that. […] This change to when we accept complaints looks to all those in the industry to step up and take greater ownership of their dispute resolution process”.

What will this change mean in practice? 

Once this change has been implemented, TPO’s Resolution Team will only consider investigating complaints following the completion of the IDRP. 

The blog does note that TPO has a team of volunteer advisers on hand who will still be able to provide impartial advice prior to the IDRP being exhausted although this volunteer support is aimed at supporting vulnerable members and cases. For example, where the risk of significant financial harm is high or where the situation is time critical. 

When will this change take effect? 

TPO is currently piloting some aspects of the change and intends to move to full implementation by autumn 2024. It notes also that TPO is keen to hear the industry’s views on implementation, including any impact on internal processes and member communications. 

Comment

As noted above, the catalyst for the change was to allow the Ombudsman to tackle their historical caseload, whilst simultaneously reducing the wait times for decisions. 

It is clear that TPO has been facing a tremendous volume of complaints and not surprising that they are struggling to keep on top of them. Pensions is far from straightforward at the best of times and each complaint will of itself demand a significant amount of time and resource.

As such, fairly drastic steps were clearly required in order for TPO to get on top of its workforce pressures, whilst also ensuring the quality of its determinations is maintained. And given that all schemes are required to have an IDRP in place, it seems logical to require that process is exhausted first before recourse to TPO.

We await more information on the other operating changes mentioned in TPO’s blog following its internal review, and will of course update on those once they are known. 

 This was co-written by Katy Dixon and Mairi Carlin.