Sam was leaving his employment with a New Zealand company which had its own superannuation scheme for employees, to move back home to the UK.
There were two options available to Sam in relation to his super funds. He could have them deposited into a New Zealand bank account, or could leave them in the scheme as a ‘continuing beneficiary’ for a maximum of two years.
Sam wanted to be a continuing beneficiary and keep the funds in the scheme. Once he was back in the UK he was going to invest the funds, but was looking to leave the funds in the NZ super scheme for around 6 months.
Sam looked on his employer’s website which referred staff to the scheme’s administrator. Sam called the administrator and was told that to keep the funds in the scheme, he did not have to do anything. If he wanted to have the funds deposited to his bank account, he would need to fill out a form. Sam was also told he could contact the administrator again to arrange the transfer of his super funds to his bank account, when he was ready.
A little later Sam noticed his super funds in his bank account. He complained to FSCL that he had been given the wrong advice by the scheme’s administrator. He said he was also suffering a financial loss because the funds would have remained invested and earning a return if they had not been incorrectly deposited to his bank account.
The scheme’s review
The scheme reviewed the recording of the telephone call Sam had made to the administrator. The scheme said the staff member Sam spoke to did not tell him the correct information – specifically the staff member had not told Sam he had to contact his employer if he wanted to be a continuing beneficiary.
The scheme also said that:
a) It had detailed information on its website about how to become a continuing beneficiary, along with an application form.
b) It could not allow Sam to deposit the funds back into the scheme. This was because it could only receive funds by way of deductions from wages, and because of Anti-Money Laundering and Countering Financing of Terrorism (AMLCFT) issues.
c) In any event, Sam could put the funds into a KiwiSaver scheme of his choice, to resolve the issue.
It was clear the administrator’s staff member had miscommunicated to Sam during the telephone call what was required of him in order to keep the funds in the super scheme.
It was also unclear from the communication from Sam’s employer, and the administrator, who Sam needed to contact to arrange for the funds to stay in the super scheme. Even if the website had information about how to become a continuing beneficiary, it also referred staff to the administrator for further information, which created ambiguity in what Sam needed to do.
We also pointed out to the scheme its suggestion that Sam could simply put his funds into a KiwiSaver scheme, was incorrect. Sam could not put the funds into a KiwiSaver scheme as he would not qualify – he was no longer living in New Zealand or a New Zealand citizen.
The scheme was keen to resolve the complaint with Sam early. It calculated that had Sam’s funds remained in the scheme they would have increased by around $960. The scheme offered Sam $1,000 in full and final settlement of the complaint, which he accepted.
This was a clear case of miscommunication. Not only had Sam been provided incorrect information in the telephone call, the suggestion Sam put his funds into a KiwiSaver scheme was also incorrect. There were also ambiguous directions given by different organisations about the steps Sam needed to take to keep his funds in the scheme. However, it was good the scheme quickly resolved the complaint.
It is vitally important that frontline staff giving customers advice are adequately trained so that the advice they give is accurate. It is also important that information on websites is correct and unambiguous.