Standard Life ordered to reconsider ‘reckless’ death payment

Standard Life has been ordered by the Pensions Ombudsman (PO) to reconsider its decision to pay pension benefits to a deceased policyholder’s mother instead of his ex-wife.

The PO says Standard Life behaved ‘recklessly' by paying out to the policyholder's mother without checking if there were any other claims to the policy, and without seeing an original death certificate.

PO Tony King, writes in his report he does not consider the injustice to be that Mayke Hogestijn, the former wife, was not paid the lump sum, but that ‘Standard Life excluded her from proper consideration as a potentially eligible beneficiary'.

Instead, Standard Life paid the policyholder's mother at the request of his sister, referred to as Mrs F, without appropriate due diligence, the PO says.

The policyholder, referred to as Mr K, died in April 2009. He was married to Hogestijn in Holland in May 1987, and made a will nominating Hogestijn as his sole heir in September 1993.

The pair were divorced in April 2004, but Hogestijn contends they resumed their relationship in 2006 and continued it until Mr K's death in France.

Mr K left another unsigned and unwitnessed will behind in which he bequeathed all of his eight pension funds to Hogestijn.

Mrs F, Mr K's sister, obtained a copy of this will and Mr K's death certificate, and then contacted Standard Life in May 2009 reporting his death. She told the company he had been divorced and left no will, and asked for the lump sum to be paid to his mother.

Hogestijn reported Mr K's death to Standard Life in June 2009, only to be told she did not qualify as a beneficiary according to the scheme rules.

Standard Life also said Mr K's first will was invalid due to divorce, and the second due to it being unwitnessed and unsigned.

Regardless of whether Hogestijn should receive the lump sum, Standard Life did not look into the case closely enough and may have violated money laundering laws, King says.

King writes: "Standard Life did not insist on an original copy of the death certificate, nor did it make enquiries of the relevant authorities in France as to whether a will had been proved there.

"Paying a substantial sum of money to someone on the basis of a telephone call and an e-mail was nothing short of reckless.

"Standard Life's actions may have contravened the Money Laundering Regulations 2007, which require due diligence to be undertaken before making payment, if the payment is other than a retirement benefit to an employee under a pension scheme."

Standard Life must reconsider the case within 28 days, disregarding the fact the lump sum has already been paid to Mrs F, and then convey with reasons whether Hogestijn will receive any benefit.

A spokesperson for Standar Life says: "We will abide by the Ombudsman's decision."