Fighting the Tide – The Pension Ombudsman's Operating Model Review

It has been a busy year for The Pensions Ombudsman. For the last five years the service has seen referral volumes outpace capacity with record levels of referrals in 2024/25 (as noted in our blog yesterday). In order to meet the joint challenges of workload and funding, The Pensions Ombudsman is relying upon changes to its Operational Model, introduced in 2023. What are those changes and what's the likely impact?

The Operating Model Review (OMR), established by The Pensions Ombudsman (POS) in 2023, is aimed at exploring possibilities for improved efficiency across the 'customer journey', covering a number of issues, such as the way in which complaints are submitted, to the way decisions are made and communicated. The goal of the OMR is to expedite the resolution of complaints, with fewer handovers between teams.

The OMR so far

The majority of improvements made under the OMR so far have been small and aimed at removing barriers on day-to-day workloads. However, some improvements have been more permanent and substantive, most notably:

• Revised complaint approach: This requires complainants to exhaust their pension scheme's internal dispute resolution process before referring their complaint to POS. The rationale behind this is to allow trustees the opportunity to address complaints at scheme level before matters are referred to POS in a bid to promote efficiency and reduce POS' caseload.
• Expedited determination approach: This was introduced in September 2024 and allows caseworkers to issue quick initial decisions on cases with clear outcomes, if they are provided with all the necessary information and/or documents upfront (missing out the adjudication process). If unchallenged, the initial decision will become binding. POS considers that this improvement could reduce wait times by up to 18 months and streamline the complaints process and its annual report notes that 104 cases between September 2024 and March 2025 were closed adopting this approach.
• The use of lead cases: Where POS identifies a single case that represents a broader issue affecting multiple members, it can prioritise this case and use it as a 'precedent' that informs and expedites the resolution of similar complaints (this was used in the Rowanmoor SSAS cases).

POS has applauded the success of the OMR and credited it for maintaining the status quo despite the record number of referrals received in the last year.

Priorities for the second year

Following the success of the first year of the OMR, POS is now looking to identify whether further improvements can be made in the 2025/26 year. With the volume of POS referrals reaching record highs, it is vital that POS identifies areas to build upon and further improve efficiency without compromising customer expectations.

POS' target for 2025/26 is to increase complaint closure rates by a further 4% year on year, whilst building on the success of the previous year and the positive implementations already made. To support this goal, POS has identified the following areas of focus:

• Improving awareness and early dispute resolution: By making further efforts to increase awareness of need to first exhaust the internal dispute resolution mechanisms before approaching POS. POS intends to provide tools and information to schemes and individual applicants to support early dispute resolution.
• Enhancing pensions expertise early on: By implementing increased levels of specialised pensions knowledge at the early stages of complaint handling. This strategy seeks to identify and address issues promptly, ensuring that cases requiring intervention are prioritised effectively and that time is being spent on the cases that require POS' attention.
• Expanding the expedited determinations approach: By broadening its application across all stages of the complaint process.
• Streamlining the jurisdiction and response process: By simplifying the procedures for determining jurisdiction and obtaining formal responses from respondents. This is expected to improve the overall complaint resolution timeline and reduce waiting times for complainants.

What's next

Whilst it has been an unprecedented year for POS, the changes introduced via the OMR has allowed the service to maintain the status quo. However, if referral levels continue to grow at the same rate, the service may need to step up its game. POS is likely to look to automation and AI to assist, but that will take time and carry its own risks – and so for now, POS continues to look at ways to cut wait times.  We wait to see whether POS looks to FOS for inspiration and the introduction of case fees, for example, to encourage early resolution before reaching POS.