Lonely voice against ombudsman merger
UK - The Association of British Insurers (ABI) is opposed to plans to integrate the Pensions Ombudsman (PO) within the Financial Ombudsman Services (FOS).
"The two bodies have distinct remits and significant differences in their approach," the ABI commented on proposals made in Paul Thornton's final paper on a review of parts of the UK pension system.
"Rather than merging, the two bodies should concentrate on improving the handling of their existing cases," the ABI added.
So far, however, this is the only voice by a larger body related to the pensions industry to speak out against the merger.
The National Association of Pension Funds (NAPF), who had said in its submission to the Thornton commission they "can see no reason to change the functions of the PO and FOS", clarified to IPE the organisation was never opposed to a merger.
"There was not a strong view either way," Michelle Lewis senior policy adviser at the NAPF explained.
"In our response we said there would be a case for bringing them together in the same building, using the same back office support. But we are not opposed to a merger," added Lewis.
Thornton recommends a full integration of the two bodies "to create a single, free standing pensions jurisdiction within the FOS to manage those pensions cases currently dealt with by the PO".
The main reason he gives is the small scale of PO resources leading to concerns about "the timescales which have arisen in the past for resolution of some PO cases".
Furthermore, from the responses Thornton received from various pension bodies, he saw "evidence of confusion - among consumers and within the pensions industry - over which ombudsman handles which pensions cases".
Clear support for a merger of the ombudsman services has come from the National Consumer Council (NCC) in its response to the Thornton review.
Meanwhile, the Pension Protection Fund (PPF) has launched a booklet entitled 'Help! My employer has gone bust … and I think I might lose my pension'. The brochure aims to help people understand how the PPF compensation regime works.
The booklet is part of a new 'Protecting People's Pensions' initiative by the PPF targeting members of work-based pension schemes throughout the UK.
"Independent research showed us that while we are communicating well with employers and trustees, many scheme members were not aware of who we are or what we do," PPF chairman Lawrence Churchill said.
"This initiative is designed to help provide confidence to people who may be worried about losing their pensions through their employers going bust."