TPO cases in review – express clarification of difference in approach to FOS

Summary

Looking back over determinations by the Pensions Ombudsman (“TPO”) from the past year, CAS-58612-P1X1 (Westerby Trustee Services) and CAS-81940-Z2S8 (Open Trustees) are particularly noteworthy in being explicit that potential differences in outcomes between TPO and the Financial Ombudsman Service (“FOS”) are driven by materially different legal and regulatory frameworks rather than mere differences in emphasis or approach. This is noteworthy as the review of the FOS redress system remains underway with the current consultation open until 11 May 2026: CP26/9: Modernising the redress system | FCA.  

In these cases, TPO makes clear that the existence and scope of any duty of care may depend on whether the transfer falls within the Financial Conduct Authority (“FCA”) regulatory perimeter, a distinction of central importance for those managing SIPP and SSAS books. Notably, there has been commentary suggesting that FOS might have reached a different conclusion in CAS-58612-P1X1, and the new CAS-81940-Z2S8 determination makes the divergence in approach even clearer.

What has happened previously

CAS-58612-P1X1 (Westerby Trustee Services)

Ms R complained that Westerby did not carry out sufficient due diligence before allowing her to invest £120,000 in a loan note issued by Renewable Land Resources Limited (RLR), which subsequently defaulted. She also challenged the level of fees charged.

Westerby’s due diligence was arguably extensive, including:

• Obtaining and reviewing RLR’s information memoranda.
• Verifying company details and directors via Companies House.
• Checking legal charges, debentures, and certificates of registration.
• Reviewing planning applications and land ownership.
• Confirming repayments and interest history for previous loan notes.
• Assessing the member’s financial sophistication (including reviewing LinkedIn profile and professional qualifications).F
• Stopping further investments when red flags (e.g., First Gazette Notice) emerged.

TPO quoted the RLR Checklist produced by Westerby which stated:

“despite the risks in relation to the unsecured shares/loan notes there is no reason to prevent a client from investing into Renewable Land Resources Limited. A random sample of Westerby Clients shows that previous loan notes interest/capital repayments have been kept up and repaid as expected. The IM [information memorandum] clearly outlines the risks, returns and costs involved with this venture. A random check of one of the opportunities listed on EW Capitals website shows that the planning permission for the project is in place and the land is real.”

Although some commentary suggested FOS might have taken a different approach—potentially finding fault even where due diligence was robust—TPO found Westerby’s actions reasonable and did not uphold the complaint. It is therefore possible that the outcome may have been the same if the complaint had been reviewed by FOS.

How TPO decided CAS-81940-Z2S8 (Open Trustees)

This determination makes the difference in approach between TPO and FOS even clearer. Mr D complained that Open Trustees failed to carry out sufficient due diligence when transferring his British Steel Pension Scheme benefits to a newly registered SSAS in September 2014. He had been subject to an unsolicited approach and unregulated advice, which led to investment in high-risk, unregulated overseas assets.

Factors FOS might have considered differently

The Ombudsman’s decision itself expressly identifies a key point of difference in approach, noting that FOS reaches its determinations by reference to what it considers to be fair and reasonable in all the circumstances, rather than by applying the law alone. In contrast to TPO’s legal and regulatory analysis, this broader evaluative framework means that FOS may place greater emphasis on consumer protection, scrutinising whether individuals were genuinely informed and safeguarded, rather than relying solely on formal documentation. Accordingly, the FOS may have considered the following points if they had assessed this complaint:

• The employment contract provided for the SSAS set out Mr D’s role but omitted key details such as remuneration and the nature of the business. It was witnessed by the same unregulated adviser who promoted the transfer, which may have raised suspicion that this was not a genuine employment arrangement.
• The fact that Mr D signed the Scorpion leaflet, while important, may not have been determinative for FOS—especially given it was one document among hundreds of pages in a large transfer pack, and there was no evidence he was taken through the risks in detail.
• The transfer and investment decisions were not made independently; the adviser recommended both, and the process facilitated the investment opportunity.
• FOS may have expected the trustee to take proactive steps beyond simply processing documentation, such as contacting Mr D directly to discuss the risks and confirm his understanding.

Points TPO found determinative

a) Regulatory Compliance
TPO found that compliance with s.95(1) PSA 1993 was paramount:
“The Trustee was presented with a member who wished to exercise his legal rights, and a receiving scheme that was properly registered with HMRC and that had provided the appropriate declarations and information. To the extent that the Trustee had a duty of care to Mr D, it would have been overridden by the statutory obligations to make the transfer.” 

b) Reliance on Signed Documentation
TPO treated Mr D’s signed declarations as sufficient evidence that the member understood the risks, taking the documents largely at face value. In contrast, FOS is reluctant to accept that a consumer genuinely understood all the risks simply because they had signed to say so—FOS typically looks beyond signatures to assess the actual circumstances and whether the individual was properly informed. 

c) Regulatory Guidance
TPO noted that, for transferring trustees of occupational pension schemes, following the checklist in the Pensions Regulator’s “Action Pack” or providing the “Scorpion Leaflet” are recommended practices but not legal or regulatory requirements. These materials are intended to guide trustees, but compliance with them is not mandatory under legislation or regulation. In contrast, FOS has been known to place greater weight on industry guidance as a factor in its decision-making and may treat adherence to such guidance as relevant when assessing complaints.

d) Duty of Care conflicting with Statutory Obligations
TPO noted that any duty of care would not arise where it might hinder the performance of a statutory obligation, that obligation in this situation being specifically the requirement to process a transfer within the deadline. 

Notwithstanding that the statutory deadline for processing a transfer is six months, TPO’s determination refers to Her Majesty’s Commissioners of Customs and Excise v Barclays Bank plc [2006] UKHL 28, a case concerning the implementation of freezing orders. The comparison reflects TPO’s reliance on the principle that legal duties – whether arising at common law or in equity – should not be imposed in a way that would impede the performance of a statutory obligation, even where the statutory and factual context of pension transfers differs materially from that of freezing injunctions. 

e) Assumption of Responsibility
TPO discussed assumption of responsibility, noting that in this case, the trustee had not voluntarily taken on such a responsibility to carry out due diligence. 

What TPO said about the differences between their approach and FOS

TPO uses the determination to set out some of the key differences between their approach and the FOS’ approach. The following passages are quoted in full, as they set out TPO's understanding of the difference and are therefore important to consider when assessing the regulatory landscape and potential outcomes:

Para 89:

“Firstly, TPO and FOS are separate entities that make decisions on a different basis. Secondly, and importantly, the regulatory regime that surrounds occupational and personal pension arrangements are not the same (and thus can result in different outcomes). Indeed, …  the difference between the regulatory environments is such that I may well conclude that different obligations could apply in respect of a personal pension arrangement when conducting due diligence in the past, when compared to an occupational pension scheme.” 

Para 90:

“TPO was established under Part X of the Pension Schemes Act 1993, and its remit is to investigate and determine complaints of maladministration and disputes of fact or law concerning personal and occupational pension schemes. TPO’s decisions are made in accordance with relevant legislative provisions, together with common law principles, such as duties of skill and care. I must follow the law – and so those principles, and not FOS’s decisions or ‘current views’, are key to my thinking.” 

In paragraph 175, the Pension Ombudsman sets out which counterfactuals may have produced a different result, noting:
“The situation where the transfer is from a personal pension scheme that sits within the FCA perimeter, and therefore the transferring trustee or operator is caught by the FCA Handbook which imposes its own regulatory obligations [noting COBS 2.1.1]. In those cases, it could be that a duty of care to meet the expectations of the relevant regulator emerges from that different regulatory regime.” 

Importantly, TPO is not merely acknowledging that FOS may reach a different conclusion as a matter of fairness.  He is expressly recognising that, where a transfer sits within the FCA regulatory perimeter, he himself might reach a different conclusion on the existence of a duty of care because the applicable legal framework – including FCA Handbook obligations – is materially different.

Takeaways for SIPP and SSAS operators

• While it is well established that FOS determines complaints by reference to what is fair and reasonable in all the circumstances, it is important to recognise that TPO’s role and legal framework are fundamentally different: TPO is concerned with trustees’ legal duties to members, whereas FOS’s broader statutory remit allows it to be driven by consumer protection and the realities of consumer understanding.
• TPO’s determinations reinforce that trustees and operators should prioritise statutory and documentary compliance for members. In contrast, FOS may expect additional steps to ensure consumers are genuinely protected and properly informed. Understanding which forum a complaint may be heard in is therefore essential, as the standards and expectations are said to differ fundamentally.
• For SIPP operators within the FCA perimeter, proactive due diligence remains advisable to meet regulatory expectations and mitigate risk.
• For SSAS trustees and operators outside the FCA perimeter, strict compliance with statutory obligations may suffice, and careful consideration may be required if assuming responsibility for additional due diligence unless required.
• TPO also emphasised the limits of its role, noting that while it had considerable sympathy for the member and recognised that the legal and regulatory landscape has since evolved, it was required to determine the complaint by reference to the law as it stood at the relevant time. It is not the role of TPO (or the courts) to develop policy or extend duties beyond those imposed by statute or established legal principles.

These determinations clarify the standards applied by TPO and highlight the importance of understanding which forum a complaint may be heard in. We note that HM Treasury has concluded its review of the FOS, with the government indicating an intention to bring forward legislative reform when Parliamentary time allows, and that the FCA and FOS are currently consulting on proposals to modernise the redress system, with responses on Chapter 2 open until 11 May 2026. Any resulting changes to FOS’s approach will be addressed in separate publications. 

If you have questions about implementing these learnings, please Suzanne Padmore, Trilby James or Hercules Phillips.

"TPO’s decisions are made in accordance with relevant legislative provisions, together with common law principles, such as duties of skill and care. I must follow the law – and so those principles, and not FOS’s decisions or “current views”, are key to my thinking."

https://www.pensions-ombudsman.org.uk/sites/default/files/decisions/CAS-81940-Z2S8.pdf