The Pensions Ombudsman’s Operating Model Review

We at The Pensions Ombudsman (TPO) have been grappling with several challenges, many of which I know feature consistently across the complaint handling sector. Our biggest challenge is the consistent increase in demand for our important service – resolving complaints and disputes about workplace and personal pensions – and the historical caseload that has built up as a result.

The significant increase in demand, which I see as a reflection of the important role we play in the pensions industry, has largely been driven by the evolution of pensions policy and consequential growth in the number of savers being brought into pension scheme membership. Constant change in both policy and the law also mean that our caseload is becoming ever more complex, requiring greater input from our in-house pensions and legal experts. This, in turn, emphasises another challenge that I know you will all be able to relate to; recruiting and retaining skilled staff within the constraints of a public sector budget. 

These challenges have unfortunately resulted in extended queue lengths and long waiting times for our customers. However, since becoming the Ombudsman last year, reducing these has been my top priority. 

I recently commissioned a ‘root and branch’ review of our operating model, exploring all potential options for improved efficiency across our ‘customer journey’ – from the way complaints are submitted to the way decisions are made and communicated. Following this review, we are now in the process of implementing a package of changes that will transform our service and lead to an improved experience for our future customers.   

Some of the improvements will lead to small changes – the niggles that get in the way of our day to day working. Others are more revolutionary and will involve a significant shift in the way we currently operate. For example, we know that many of the pension complaints we currently receive could and should be resolved under the respondents’ own internal resolution process, without the need for TPO input. Therefore, going forward, we will be requiring all complainants to exhaust the respondent’s formal complaints process before we will consider investigating their complaint. This will see us return to being an ombudsman of last resort, like many of our counterparts. 

We will also be introducing more closure points at the earlier stages of our ‘customer journey’. Generally speaking, we currently have to rely on agreement between parties in order to close a case at an early stage. That means entrenched complainants and respondents can take things to the bitter end, however clear cut the complaint is. In future, we will extend the use of short-form decisions and determinations across all stages of our processes, bringing forward our decision-making, reducing the number of hand-offs between teams and creating more opportunities to close cases sooner.

We have other activity underway too, including a review of whether there are certain categories of complaints that are more appropriately dealt with by other organisations, and whether a de minimis threshold should be applied in some circumstances.

Of course, when making significant changes, learning from our peers is invaluable. My colleagues who attended the Ombudsman Association’s conference in June this year all commented on how fantastic it was to learn from other similar organisations, and I’m grateful to all who have shared their experiences and insights with us both at the conference and through our wider engagement. We hope to continue our collaboration as we all strive to achieve fair outcomes for our customers in the best ways we can.

Dominic Harris – The Pensions Ombudsman