Not upheld: failure to locate historic pension policies and alleged unauthorized transfer of pension benefits complaint against Phoenix Life Ltd

Decision detail

Summary

Mrs O held two personal pension policies with National Provident (NPI) from 1986, paying 10% of her salary for approximately two years before stopping around 1987/1988. In 2024, after finding bonus notices from 1987, she approached PLL (which had acquired NPI's business in 1998) requesting annuity payments and arrears. PLL could not locate the policies in their records, showing only that they were marked 'out of force' on 14 May 1993. After multiple complaints and escalations, Mrs O brought the matter to the FOS. The ombudsman found that the policies had likely ceased to exist by May 1993 due to modest premiums paid, annual charges, and no further contributions, making it impossible for PLL to have transferred them. The ombudsman upheld PLL's position that they had no obligation to pay benefits and found the compensation already paid (£570) for communication errors to be fair.

The Ombudsman's reasoning

The ombudsman applied a balance of probabilities test given the limited evidence available. Key reasoning: (1) Mrs O paid premiums for only approximately two years, resulting in modest contributions; (2) the bonus notice values assumed continued premiums until retirement, which did not occur; (3) annual management charges and fees would have applied to the policy; (4) the policy was likely marked as 'paid up' when premiums ceased around 1987/1988; (5) the policy value could have eroded to zero over the five-year period between premium cessation and the May 1993 cancellation date; (6) PLL's records showing the policy as 'out of force' in May 1993 (5 years before they acquired NPI) are credible and supported by their explanation of their systems; (7) it is impossible for PLL to have transferred a policy in 1993 when they did not acquire the business until 1998; (8) PLL made reasonable efforts to search their systems and found no evidence of live policies; (9) the compensation paid for communication errors was appropriate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website