In most pension schemes it is the trustees who decide to whom any lump sums payable on the death of a member should be paid. When reaching a decision trustees should act in accordance with their fiduciary duties; taking into account relevant factors and ignoring irrelevant factors.
However, it is clear from the number of complaints that are made to the Pensions Ombudsman, that decisions are still not being made properly by many trustees. We have seen cases where a complainant has referred the trustees of a scheme to the Ombudsman two or three times for repeatedly getting the decisionmaking process wrong, adding to the costs of running the scheme. Follow our “do’s and don’ts” guide below to avoid finding yourself in this situation.
If you are unclear about any of the above, DO make sure you obtain appropriate legal advice.
Following this guide and obtaining appropriate legal advice may not prevent a complaint from ending up with the Ombudsman but it should enable you to successfully defend it. In order for a complaint to be upheld it would be necessary for the complainant to show that the trustees’ decision-making process was defective or that, having considered the matter properly, the decision was a perverse one.