Sanlam Retirement Death Benefits Scheme · CAS-87628-Y8G6

CAS-87628-Y8G6

Ombudsman’s Determination Applicant Mr NS

Scheme Sanlam Retirement & Death Benefits Scheme (the Scheme)

Respondents Sanlam Final Services UK Limited (the Administrator)

Outcome

Complaint summary

Background information, including submissions from the parties Mr NS’ father, Mr S, was a member of the Scheme.

The Scheme is administered in accordance with the Sanlam Personal Retirement Scheme Trust Deed and Rules dated 3 November 2010 (the Rules).

The Rules define “beneficiaries” as:

“In relation to a Member or a Dependant in respect of whom a lump sum benefit is payable under the Scheme may be any one or more of the following:

(a) Any person, charity, association, club, society or other body (including trustees of any trust, whether discretionary or otherwise) whose names the Member has notified to the Scheme Administrator in writing prior to the date of the Member’s death;

(b) the Member’s Spouse;

(c) the parents and grandparents or the Member or the Member’s surviving Spouse and any children and remoter issue of any of them;

(d) the Member’s Dependants;

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Sanlam Final Services UK Limited CAS-87628-Y8G6 (e) any person, charity, association, club, society or other body entitled under the Member’s will to any interest in the Member’s estate;

(f) the Member’s legal personal representative; and

(g) any other person, charity, association, club, society or other body which the Scheme Administrator believes the Member would have wished to benefit…”

The Rules state that the definition for “dependant”, as determined by the Administrator, is given the same meaning as in paragraph 15 of Schedule 28 of the Finance Act 2004 (the Finance Act)1.

Rule 8 of the Rules provides the criteria for the payment of any death benefits following the death of a Scheme member. In particular Rule 8.3, payment to beneficiaries, states:

“the Scheme Administrator may pay or apply such lump sum to or for the benefit of one or more Beneficiaries in such proportions as it thinks fit. The Scheme Administrator may pay all or any of the lump sum to the trustees of another trust to benefit one or more Beneficiaries or may direct all or any of the lump sum to be held by itself or other Trustees on such trusts, including discretionary trusts, for the benefit of one or more Beneficiaries as the Scheme Administrator thinks fit.”

On 8 August 2020, Mr S made a Last Will and Testament (the Will) and appointed his wife, Mrs S, as the Executor. The Will outlined how the proceeds of the sale of his property, Sanlam onshore bonds, premium bonds and an ISA should be split between his wife, children/step-child and grandchildren. The Will said that the Scheme benefits should be split as follows:

• 12% to his daughter, Ms AS;

• 12% to Mr NS;

• 32% to his step-daughter Ms R; and

• 21% to each of Ms R’s two daughters.

On 28 November 2020, Mr S completed an expression of wish form (EOW). He nominated three beneficiaries, Ms R and Ms R’s two daughters to receive an equal share of the Scheme benefits in the event of his death.

On 1 December 2020, the Administrator wrote to Mr S and acknowledged receipt of his EOW, his nominated beneficiaries and their respective splits.

On 7 September 2021, Mr S and Mrs S both died in a road traffic accident. As Mrs S was listed as the Executor of Mr S’ Estate, Ms R (Mrs S’ daughter and Mr S’ step-

1 https://www.legislation.gov.uk/ukpga/2004/12/schedule/28/paragraph/15

2 CAS-87628-Y8G6 daughter) took over as the Executor for Mr S’ and Mrs S’ Estates and applied for a Grant of Probate for both.

On 12 January 2022, David W Harris & Co Solicitors (the Solicitors), on behalf of Mr S’ children, wrote to the Administrator to query the distribution of the Scheme benefits after Mr S’ death. A copy of the Will was enclosed.

On 13 January 2022, the Administrator responded to the Solicitors and said that it had identified Mr NS, Ms AS and Ms R as potential beneficiaries. If they wished to be considered as potential beneficiaries, they should complete information enquiry forms, which were enclosed. It said that if it did not hear back from any of the potential beneficiaries by 13 March 2022, it would assume that they did not want to be considered.

On 2 February 2022, the Solicitors wrote to Mr NS, Ms AS and Ms R and provided them with a copy of the information enquiry form to complete. The Solicitors explained that Ms R’s children were also considered as potential beneficiaries, so Ms R should complete a separate information enquiry form for each of them.

On 7 March 2022, Mr NS returned his completed information enquiry form to the Solicitors to forward onto the Administrator. By completing the form Mr NS confirmed that he:

• wished to be considered as a potential beneficiary;

• was financially dependent on Mr S at his date of death, though he was not physically or mentally dependent on Mr S;

• Mr S was his “biological father, [he is] a blood relative unlike other beneficiaries stated”.

• He “strongly disagrees with non-blood beneficiaries having a share of the pension of [Mr S]”.

On 15 March 2022, the Administrator wrote to Mr NS and asked him to provide evidence to support his claim that he was financially dependent on Mr S. This could include evidence of Mr S paying his mortgage, household expenses, and/or bills. He should provide copies of any bank statements that he believed might support his claim.

On 25 March 2022, Mr NS provided copies of bank statements which showed Mr S depositing £300 into his account each month. He explained that Mr S also made regular contributions into his own personal pension with Sanlam.

On 5 April 2022, the Administrator wrote to Mr NS and said that it had reviewed the information he provided in support of his claim as a potential beneficiary. It took into account the evidence of financial dependency, it had also written to Mr S’ former financial adviser for relevant information. When deciding on how to distribute the

3 CAS-87628-Y8G6 Scheme benefits, it tried to ascertain what Mr S’ wishes were. Consequently, a decision was made that he would not receive any of the Scheme death benefits.

In May 2022, Mr NS submitted a complaint under the Scheme Internal Dispute Resolution Procedure (IDRP).

On 24 May 2022, the Administrator responded to Mr NS’ IDRP complaint. It explained that it was not prepared to accept his complaint as he was not deemed as an eligible complainant. Section 2.7 of the Financial Conduct Authority handbook outlined what was considered as an eligible complainant, none of which he met. However, it had reviewed the claims file put together by its bereavement claims team. It believed that all the relevant information had been taken into account when a decision was reached.

Summary of Mr NS’ position

The Administrator did not take the provisions made within the Will into account when it decided who to pay the Scheme benefits to.

The recipients of the Scheme benefits were also set to receive around 60% of the whole of Mr S’ estate. He believed that any funds the recipients received would be reinvested with Sanlam, which was not the case with him and his sister. This was because they both elected to move their personal pensions held with Sanlam to another provider due to the way the Administrator treated them over the course of its investigation.

Summary of the Administrator’s position

Under the provision of the Will, 50% of the value of Mr S and Mrs S’s property would be split equally between Mr NS, Ms AS and her son. Mr S’ Sanlam onshore bond and ISA would be split equally between Mr NS, Ms AS and Ms R. Mr S’ premium bonds were to be split equally between his three grandchildren. It did take note of the percentage splits that were provided for how the Scheme benefits should be divided.

Mr NS and Ms AS were Mr S’ biological children, and Ms R was his step-daughter following his marriage to Mrs S. The Administrator contacted Mr S’ financial adviser to query the nature of the relationship between Mr S and his children/step-child. The adviser, as well as the Solicitors, advised that Mr S treated all of his children/step- child the same. The financial adviser was not even aware of the fact that Ms R was not Mr S’ biological daughter.

The Administrator believed that it was unusual to see so much detail within the Will as to how Mr S’ assets would be split between his children, step-child and grandchildren. While the value of Mr S and Mrs S’ property and premium bonds were unknown, it seemed that Mr S was attempting to consider the values of his assets and was attempting to split his assets equally between his family.

The Will was made in August 2020, and the new EOW was received in November 2020. It was reasonable to infer that Mr S was undertaking inheritance tax planning. 4 CAS-87628-Y8G6 Mr S’ financial adviser also confirmed that he withdrew “discount gift trust on the jointly held Sanlam bond in order to gift £70,000 to each child in December 2020”.

Ms AS claimed that she was financially dependent on Mr S at his date of death as he had paid for all of the costs associated with her car, except petrol. This included tax, insurance, maintenance and MOT. He also paid for her and her son to go on holiday each year.

Mr NS claimed that he was financially dependent on Mr S as he also had a Sanlam personal pension which Mr S would pay £1,500 into each year. However, this had since stopped from November 2020. This was also the same month that Mr S completed a new EOW. It appeared that Mr S did pay £300 into Mr NS’ bank account each month.

Both Mr NS’ and Ms AS’ claims for financial dependency were considered by the Administrator. However, it was decided that while Mr NS received a monthly allowance from Mr S, it did not materially impact his lifestyle and was not classed as financial dependence. The funds that Mrs AS received for her car and holiday were considered as luxury expenditure as opposed to financial dependence. Financial dependency would be accepted if Mr S was paying one of his children’s mortgage or bills, with Mr S’ death then resulting in financial hardship. This was not the case.

The assets that Mr S bequeathed to Mr NS and Ms AS via the Will should more than make up for any loss of income that Mr S previously paid to them on a monthly/annual basis. It was thought that Mr S may have been regularly gifting Mr NS and Ms AS excess income to reduce the value of his estate and any potential inheritance tax after his death. HM Revenue & Customs guidelines allowed for this to occur so long as the payments were regular amounts not causing detriment to Mr S’ own standard of living.

Both Mr NS and Ms AS felt that only Mr S’ biological children should receive shares of the Scheme benefits as opposed to those who were not. The information enquiry form was initially completed by Ms R, who said that the Scheme benefits should be split between herself, Mr NS and Ms AS. However, subsequent comments provided by Mr NS and Ms AS did not agree with this.

It understood that Mr NS had questioned the appropriateness of contacting Mr S’ former financial adviser. The financial adviser was an employee of Sanlam Wealth Planning, now known as Atomos, which was a separate legal entity to the Administrator. The financial adviser did not play a role in the decision-making process. The recipients of the Scheme benefits did not have any products with Sanlam, so there was no vested interest in who the Administrator decided to pay the benefits to.

5 CAS-87628-Y8G6 Adjudicator’s Opinion

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Mr NS did not accept the Adjudicator’s Opinion, and the complaint was passed to me to consider. I agree with the Adjudicator’s Opinion and note the additional points raised by Mr S which are:-

• The death benefits should have been paid in accordance with the Will. In not following the Will, the Administrator disregarded the wishes of Mr S.

• Ms R claimed Mrs S’ (his step-mother) pension and said that she was the only next of kin. However, Mrs S’ mother was still alive (Ms R’s grandmother). He claims that Ms R was then required to pay some of Mrs S’ pension benefits to her grandmother.

• When Mr S and Mrs S made their Wills, they were done on the assumption that Mr S would be the first to die as he was older than Mrs S. The Wills were drafted in such a way to ensure that every beneficiary was taken care of. However, after Mr S and Mrs S died at the same time, Ms R and her children received 60% of the value of both Mr S and Mrs S’ Estates.

• He believed that the financial adviser involved with Mr S and himself sided with Ms R as she had inherited a substantial amount of money after the deaths of Mr S and Mrs S. He claims the financial adviser would like benefit financially from Ms R.

Ombudsman’s decision

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2 Edge v Pensions Ombudsman [1999] EWCA Civ 2013 considered the principles of trustee decision

making. 8 CAS-87628-Y8G6

I do not uphold Mr NS’ complaint.

Camilla Barry Deputy Pension Ombudsman

16 October 2025

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