Rothesay Life Plc · DRN-6014606

The complaint Mr M has complained that Rothesay Life Plc (“Rothesay”) has refused to backdate his annuity payment to his retirement date. What happened The background to this complaint was clearly set out in the Investigator’s opinion letter, dated 7 November 2025. So I don’t intend to repeat it in full here. Instead I’ve provided a summary of what I consider key to my decision. Mr M held a group personal pension (‘GPP’) with Rothesay. The GPP was established after Mr M’s previous employer’s pension scheme was bought out by Rothesay. Mr M contacted Rothesay to request a retirement illustration with a retirement date of 30 January 2025. Mr M accepted the retirement quote and returned the relevant documents and identification documents that Rothesay needed. After asking for an update on the progress of his retirement application, Mr M was told on 30 January 2025 that there was a section of the form that was missing and needed to be signed. On 3 February 2025, Mr M signed and returned this to Rothesay. At this point, Rothesay had everything it needed to move forward with Mr M’s retirement application but the benefits needed to be recalculated. Mr M received the updated value on 7 February 2025. On 10 February 2025, Mr M called Rothesay to discuss his retirement quotation. During this call Mr M was told his annuity payments would be backdated to his retirement date – 30 January 2025. On 12 February 2025, Mr M accepted the updated retirement quotation from Rothesay. Rothesay confirmed to Mr M the following day by letter that his retirement application had been successful. It said his lump sum payment would be received by him on, or around, 18 February 2025. And the first regular payment would be received on 21 March 2025. The letter also said it would include all applicable back payments. Mr M called on 11 March 2025 after he had received his first payment as he believed he was missing 21 days of payments, covering the period of 30 January 2025 to 21 February 2025. At this point, a complaint was raised. Rothesay looked into the matter. After its investigation had concluded it issued its final response confirming that Mr M had been provided with all the back payments he was entitled to. Mr M referred the matter to our Service for an independent review. One of our Investigators initially thought Rothesay needed to compensate Mr M for missed payments between 30 January 2025 and 21 February 2025. The Investigator also thought Mr M had his expectations raised unreasonably based on a conversation he had with

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Rothesay on 10 February 2025. So he was reasonably expecting to receive a much higher sum as his first payment. In recognition of the distress and inconvenience this had caused, the Investigator recommended Rothesay pay Mr M £250 compensation. Mr M accepted the Investigator’s findings but Rothesay didn’t and it provided further information. After reviewing the new information, the Investigator updated his findings; he was no longer satisfied Mr M was entitled to a back payment between 31 January 2025 to 21 February 2025. This was because having reviewed the buy-out agreement, the Investigator said it was clear that no proportionate payment would be paid. And he explained that had the GPP benefits remained with Mr M’s former employer’s scheme - and Mr M had taken his benefits directly from the former scheme - the evidence suggests Mr M would not have been entitled to payment for the period in question. But the Investigator remained of the view that Rothesay should pay Mr M £250 for the distress and inconvenience caused as a result of Mr M having his expectations raised unreasonably during a call with Rothesay. Mr M didn’t accept the Investigator’s findings. In summary he said: • He was not made aware of the terms of the buy-out agreement regarding pro rata periods. And the 4 weekly payment dates are selected by Rothesay and not publicised, and so he could not have made an informed decision to select a retirement date that aligned with a payment date. • None of this was disclosed to him by Rothesay in any documentation or subsequent telephone conversations. In fact during telephone conversations he was told exactly the opposite. He was informed that he would be paid pro rata. • Rothesay has not exercised its duty of care, and its continued actions in this matter have caused him distress. Rothesay responded to the Investigator’s opinion and confirmed that it didn’t agree Mr M had suffered a loss of expectation and it was unhappy the Investigator had awarded £250 compensation. The complaint has been passed to me to reach a final decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. My role is to consider the evidence presented by Mr M and Rothesay in order to reach an independent, fair and reasonable decision based on the facts of the case. In deciding what’s fair and reasonable, I must consider the relevant law, regulation and best industry practice. And, having done so, I’m partially upholding Mr M’s complaint and it’s largely for the same reasons that our Investigator has set out - I’ll explain why below. The responsibility for Mr M’s former employer’s pension scheme was transferred to Rothesay and the terms of the buy-out agreement insured that benefits were to be paid in exactly the same way as they were prior to the buy-out. The agreement went on to set out the payment terms. These were confirmed as: “3.4 Payment Terms 3.4.1 Date pension to commence payment The first day of the next four-weekly pay period following the retirement of the member.

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3.4.2 Frequency of payment 4 weekly. The pay date in January 2019 was 4 January 2019 and they are four weekly thereafter. 4.3 Day of payment Friday. If the Friday is a bank holiday, payment is made on the preceding working day. 3.4.4 In advance or in arrears In advance, so pension payments made on the 4 January are for the period 6 January to 2 February. 3.4.5 Proportionate first payment No – paid in full as payment commences on first day of next four-weekly pay period following retirement of the member” Rothesay also provided the payment schedule showing that the next payment date after Mr M’s chosen retirement date of 30 January 2025 was 21 February 2025. Given that the above terms specifically state that proportionate first payments don’t apply, I’m satisfied that Mr M was only entitled to start receiving his pension payment from Rothesay on 21 February 2025. However, the first payment wasn’t made until 21 March 2025, so Rothesay’s payment was increased to include the payment that should have been paid from the 21 February 2025. Having considered all the information provided, I think this payment was in line with the terms of the buy-out agreement and so I don’t think Rothesay were contractually obliged to back date the payment to 30 January 2025, as Mr M has requested. Mr M has said he wasn’t made aware of the terms of the buy-out agreement regarding pro rata periods. And the 4 weekly payment dates are selected by Rothesay and not publicised, and so he could not have made an informed decision to select a retirement date that aligned with a payment date. And I note in correspondence to Rothesay, Mr M said that had he known, he would have modified the pension start date to align with the payment date so he could have received three full payments rather than two for his first payment. However, the payment dates were set by the former scheme prior to Rothesay taking over the pension. And even if I did think this was information that Rothesay was required to tell Mr M when he called to request his retirement quotation, I don’t think Mr M would be in a different position now, had he known about these dates. I say this because Mr M didn’t return the retirement forms to Rothesay until 22 January 2025. This was two days before the next payment date. However, not all parts of the form were signed. So it wasn’t until 3 February 2025 that the correctly signed form was received by Rothesay. Rothesay confirmed the following day that it had everything it needed to move forward with Mr M’s retirement application. This was after the previous payment date had passed. So even if Mr M had chosen an earlier retirement date to align with an earlier payment date, so the 24 January 2025, Rothesay hadn’t received all the correctly completed paperwork from Mr M for his retirement to start by that earlier date. So even if Mr M had chosen an earlier retirement date, he would never have been entitled to a first payment of three full payments as Rothesay didn’t receive the correct paperwork in time. I’m also aware that Rothesay had previously sent information to Mr M when it took over his pension in 2021. Within the policy document there was an explanation that the pension

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would be paid every four weeks and that the first payment is made at the next four-weekly pay date after retirement. I’ve also listened to the call Mr M had with Rothesay in December 2024, when he requested a retirement quotation. Despite having policy documentation that explained there was a set payment date, Mr M didn’t ask any questions about this. And having already received a policy document explaining the payment date, I don’t think Rothesay was required to explain this without Mr M raising it as a query. Mr M feels that he was given mis-leading information by Rothesay over the phone in February 2025 because he specifically asked about the payment being backdated to his retirement date and was told that this would happen. So he believed he would receive a larger first payment than he actually did. Having listened to the call on 10 February 2025, I can see why Mr M believed this would be the case. The call handler specifically said the payment would be backdated to Mr M’s retirement date of 30 January 2025. Mr M then asked if this meant he would get a payment for January and February in the first payment. At this point the call handler confirmed that as the payment is made in advance, it wouldn’t cover all of January but it would cover the last two days (so from 30 January 2025 – Mr M’s retirement date). Although it has now been clarified that a pro-rated payment isn’t allowed for under the terms of the scheme, I can see why Mr M believed he would receive one on this occasion. So I think finding out later that his first payment wouldn’t be as much as he was expecting, would have caused distress and inconvenience. The role of this Service is to put Mr M back in the position he would have been in, had Rothesay done what it should have done. In this case, I appreciate Mr M will be disappointed but as he was never entitled to a back payment to 30 January 2025, I’m not asking Rothesay to make a pro-rated payment. And I don’t think it would have been possible for him to have set an earlier retirement date, so as to have received three full payments in the first payment as Rothesay didn’t have all the relevant paperwork in time. But I agree with the Investigator that Mr M had his expectations raised when he was told he would receive a backdated payment from 30 January 2025. So Rothesay should pay Mr M £250 in recognition of the distress this matter has caused him. Putting things right I think it’s fair to say that Mr M had his expectation raised when he was told that he would receive a back payment to the 30 January 2025. When this didn’t happen, this would have caused Mr M some distress and inconvenience. So, I consider that a payment of £250 is appropriate to compensate for that upset. My final decision For the reasons explained, I partially uphold this complaint and direct Rothesay Life Plc to pay Mr M £250 in recognition of the distress and inconvenience caused in this matter. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr M to accept or reject my decision before 16 April 2026. Lorna Goulding Ombudsman

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