Clarifying Trustees' Duties: The Pensions Ombudsman's Determination on Statutory Transfers

On 26 August 2025, the Pensions Ombudsman (POS) issued a significant determination that goes some way to clarifying the duties of pension scheme trustees for pre-2021 statutory transfers from occupational pension schemes.

The complaint was brought by Mr D who was a former member of the British Steel Pension Scheme (BSPS) and transferred his pension to a Small Self-Administered Scheme (SSAS) in 2014. Mr D claimed that the BSPS trustees failed to carry out adequate due diligence on the receiving scheme prior to the transfer being affected, which would have identified the warning signs of a scam and as a result, the transfer should have been stopped.

The trustees argued that they had complied with the duties that were in place at the time of the transfer, the statutory conditions for a transfer were met and Mr D had been provided with regulatory warnings, including the Scorpion leaflet, which warned of the risks of pension scams. The trustees maintained that there was no statutory authority or obligation to block the transfer.

The Determination – Statute vs Guidance

At the heart of the complaint was a tension between statutory obligations and regulatory guidance. At the time of the transfer, a trustee had no general, common law or equitable duty of care to conduct the due diligence Mr D was suggesting. However, it was acknowledged that there was regulatory guidance in place (set out in the Pensions Regulator's Action Pack and the Scorpion Leaflet) which indicated that trustees could exercise their discretion when it came to processing a transfer.

The Ombudsman ultimately rejected the complaint on the basis that the law in 2014 provided members with a statutory right to transfer if certain conditions were met. It was the responsibility of a trustee to verify those conditions and once met, the trustee had a statutory obligation to process the transfer. It was found that a trustee had no statutory duty to go beyond this (irrespective of the regulatory guidance) which included investigating whether the receiving scheme was a scam.

The significance for Trustees 

This determination is significant for several reasons. First, it provides much-needed clarity on the duties of trustees handling transfer requests in the years before the Pensions Schemes Act 2021 introduced stronger safeguards.

Second, the determination offers some assurance to trustees that they will not be judged with the benefit of hindsight. The Ombudsman specifically noted that actions must be assessed based on the legal and regulatory context that existed at the time of the transfer, rather than by today's standards – noting that applicable standards have evolved significantly in response to the rise in pension scams.

Implications going forwards

The implications of the decision are potentially wide-reaching, particularly as the Ombudsman considers that this determination is likely inform outcomes on similar complaints.

For trustees, the determination provides some comfort that adherence to statutory obligations is the baseline standard in pre-2021 matters. Trustees were not expected to second-guess members' intentions or go beyond their statutory duties unless they voluntarily assumed such responsibilities.

For members, the determination is a reminder of the importance of understanding personal responsibility in pension transfers. 

Conclusion

POS's determination is an important ruling that reaffirms the limits of trustee obligations for pre-2021 statutory transfers. Whilst the outcome may disappoint some members seeking redress, it brings much needed clarity to trustees operating in a legally complex, and emotionally charged, area. 

POS's determination will be welcomed by the pensions industry, as it may assist in stemming the tide of retrospective claims against trustees – particularly those executing transfers in the 2010s – a welcome confirmation for PTL insurers.