Serious ill health claim

Hayz82

My brother applied to cash in his Tesco pension on the grounds of serious Ill health as he was diagnosed with terminal cancer back in January. He was only 40 years old and all the medical information was provided back in January, unfortunately he passed away on 20th February. Now Tesco are saying that they didn't recieve the relevant medical info before his death and say they will only pay out 5 years worth of pension (£2500) instead of the full amount which would have been £8000 - can they do this even though the ill health claim was made in January and we can prove they had the medical information before he died?

jamesd

Pension scheme trustees and employees have to act with reasonable care and it appears that in this case they have failed to do so. I suggest that you:

1. Provide them with the proof that the information was provided and when. Also provide copies or notes of any contacts with them to alert them to changes in his condition that would have indicated increasing urgency due to reducing time available to act.

2. Invite them to explain why it would not be appropriate in the light of them having the information supplied to make a formal complaint that they have failed to act with proper care, particularly given the clear time-critical nature of handling pension matters when someone is known to have a greatly reduced life expectancy. Also request a copy of the scheme's disputes procedure.

If the answer is not satisfactory the next step would be a formal complaint to them.

I'm surprised that the full amount was only £8,000. With a £500 income I would expect that the cash-equivalent transfer value would be more like £14-15,000. Just what was asked for? The best thing to ask for would typically be for a transfer value to make a transfer request to a personal pension because this would normally be more than the death benefit of most defined benefit pension schemes. But this does require that the person with teh diagnosis or their doctors or other helpers know about the transfer possibility and that it would typically pay more.