The Pensions Ombudsman has ordered the University Hospitals of Leicester NHS Trust to pay £1,000 to a scheme member for distress and inconvenience caused when payments were taken for an additional pension, which the complainant had wanted to set up but had not been actioned.
Ombudsman Anthony Arter also ordered the trust to tell the scheme member how much it would cost in contributions to retroactively establish the additional pension.
The complaint was brought by “Ms R”, who joined the 2008 section of the trust — which has a retirement age of 65 — on October 5 2009.
On February 9 2015, she contacted the trust to ask about the purchase of an AP of £1,000 to be payable when she reached the age of 60.
We see day in and day out mistakes on NHS pension records
Graham Crossley, Quilter
The online calculator indicated that Ms R would need to pay £125.20 a month for seven years. She said she completed the AP1 form, sent it to the trust, and that payments started to be taken from her in March 2015.
On July 4 2019, Ms R contacted NHS Business Services Authority as she had received a pension statement, but there was no record for the AP. She was told by NHSBSA that information regarding the AP remained outstanding from the trust.
NHSBSA did not receive key documentation
Ms R complained to NHSBSA about the AP not being set up and, on October 16 2019, it wrote to her under the first stage of the internal dispute resolution procedure. It said that for Ms R to have set up an AP, she would have had to partially complete the form and pass it to the trust to complete and send to NHSBSA.
But NHSBSA said it did not receive the form and therefore had no record of an AP purchase for Ms R. It also said that as she was a member of the 2015 section of the scheme when she said she submitted the form, she could not have taken an AP contract for payment at age 60 as the retirement age for this section was 65.
Ms R was dissatisfied with the response from NHSBSA and asked for her complaint to be considered under the second stage of the IDRP.
On November 18 2019, NHSBSA responded to Ms R under stage two of the IDRP. It said it had no record of receiving the form, nor of any payments being received from Ms R in relation to the AP she understood to have been set up.
As a cost for payment to be paid at age 60 was provided to Ms R in March 2015, it is possible she may have selected an incorrect section of the scheme when she completed the online calculator, since only members of the 1995 scheme can purchase an AP for payment at age 60.
From April 1 2019, the cost to purchase the AP was revised and the monthly amount to continue purchasing an AP for retirement age 65 increased.
Ms R made a complaint about whether it is reasonable for NHSBSA to expect her to pay additional contributions. The first time she was informed that the online calculator was not working was when she received a formal response from NHSBSA.
The trust was required to update Ms R’s pension record annually and failed to do so. Had it done so correctly, the issue would have been resolved in 2015.
NHSBSA then offered two recalculations. Ms R agreed to the term being altered to six years and that the benefits could be taken when she reached age 65. But the trust failed to enact this, refused to respond to her, and tried to change the terms again.
The adjudicator considered Ms R’s complaint and concluded that she had submitted the form for the AP to the trust, but the trust had not completed nor sent the form to NHSBSA.
In the adjudicator’s opinion, an error had occurred and the trust was responsible. In addition, the failure by the trust to properly set up the AP arrangement amounted to maladministration.
Ms R had been proactively trying to set up the AP over a prolonged period of time and even agreed to alternative terms to try to resolve the matter. But the trust did not set up the AP, adding to her frustration.
Ms R had therefore suffered serious distress and inconvenience due to the trust’s maladministration, and an award of £1,000 was deemed appropriate.
‘Serious knock-on effects’
While NHSBSA and Ms R agreed with the adjudicator’s opinion, the trust did not and the complaint was passed to the ombudsman Arter.
He agreed with the adjudicator and said that the available evidence supports the view that the trust received the form, otherwise it would not have taken payments from Ms R. He upheld Ms R’s complaint against the trust.
Arter said: “I find, on the balance of probability, that the trust had failed to complete and forward the form to NHSBSA.”
He added: “I have no doubt that the trust’s failure to submit the AP form to NHSBSA in 2015 followed by its subsequent inaction between 2017 and 2019 will have caused Ms R distress and inconvenience.”
Arter ordered the trust to pay Ms R £1,000 for the stress and inconvenience caused and liaise with NHSBSA to establish the cost of retrospectively implementing the AP arrangement on the terms that were available to Ms R, as a member of the 2008 section of the scheme, in February 2015.
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These costs should then be provided to Ms R and she can then confirm whether she wants to proceed. If she does not, then the trust should refund the contributions it held for her along with interest.
Quilter NHS pensions specialist Graham Crossley said: “We see day in and day out mistakes on NHS pension records. These can ultimately have serious knock-on effects on both the amount someone receives from their pension and also how they are taxed.”
For the average NHS employee who is unfamiliar with pensions literature, or simply very busy, it is often almost impossible for them to identify these mistakes, with the consequences being significant, he added.
