TUPE/Pensions/Detrimental Employer Advice

Ghostgirll

Hi everyone,

I'm in the middle of a legal challenge against my employer and the trustees of my final salary pension fund, which is closing at the end of the year. The complaint relates to Early Retirement pensions on redundancy that I believe would have TUPE'd along with me many years ago when my current (multi-national) employer bought over a large section of my previous - also multi-national - employer almost 20 years ago.

The basics are that under my previous employer there were 2 possible early retirement benefits that were payable unreduced in the event of redundancy/severance or by agreement. At the time of our TUPE transfer the Transferee company (i.e. my present company) made promises in writing to provide a pension fund that was to be "at a minimum comparable" with the Transferor's (i.e. my previous employer) scheme. They also offered some very strong advice to the transferring employees as regards what do do with their pension going forward. Essentially, anyone who was over 50 was paid an immediate unreduced pension from the Transferor and, in effect found themselves in the very fortunate position of becoming what we jokingly call a "double-dipper", as, going forward, they would still had a job with the new Transferee company, but also would be in receipt of an unreduced pension from the Transferor's pension scheme. Lucky them!

Anyone who was under 50 - and therefore not eligible for an unreduced pension from the Transferor company - was given the following advice:
"“You are strongly advised to join the **Transferee** Fund AND to transfer your benefits from the **Transferor** Fund unless you are aged 50 or over and qualify for an immediate pension from the **Transferor** Fund. Failure to do so may affect your future income. If you decide not to join the **Transferee** Fund, neither you nor your family will receive any benefits from the **Transferee** Fund.”

So anyway as you can see, some pretty strong advice from my current employer there...

The problem is that, 20 years later, it now transpires that my current employer's pension scheme turns out NOT to be as "comparable" as was intimated in black and white to us all those years ago in our Pension Pack documentation. Why? Because the unreduced early retirement pension we had previously been privy to, and which we were promised IN WRITING (via a "Comparison of Benefits" chart within the Pension Pack) would transfer with us into the new scheme, does not actually exist within the Trust Deed and Rules of the Fund, and our employer is now saying that they never TUPE'd.

I'm very familiar with the now infamous Beckmann, Martin, Proctor and Gamble court cases, and so I have initiated separate proceedings against my employer (via Formal Grievance Procedure), and the Trustees of the scheme (via Internal Dispute Resolution Procedure), respectively.

The Trustees have responded saying basically that the "Contested Benefits" complaint is a "Contractual matter", and therefore nothing to do with the Pension Scheme, so it should be taken up with my employer.

The Employer is saying that the "Contested Benefits" "...EITHER did not TUPE, or did, but was varied shortly thereafter" (yes, this quote is taken directly from my employers actual response to my Formal Greivance complaint).

Sorry about the long explanation, but basically at this point my first question is in regard to the strongly worded advice (quoted above) from my current employer, that we each received within our Pensions Pack (this document is obviously almost 20 years old now)... and it is this, "Can I sue my on grounds that I was promised a pension that would be "at a minimum comparable" with my previous scheme, but which in fact turned out to be missing an extremely valuable early retirement benefit, AND, does the strongly worded advice from my current employer (at the time of the TUPE transfer) to transfer my entire pension (via bulk transfer) into the scheme constitute grounds for a Legal challlenge? Also, is an employer - or in this case prospective employer - breaking any laws by issuing such strong advice - shouldn't that sort of advice ONLY be given by a Registered Financial Expert?

This is all very complicated, and actually in spite of the long post I've only given a brief outline of all the potential issues, but if anyone has been in a similar situation, especially if they've had reason to use Beckmann etc Rights as part of their pension dispute, I would be grateful to hear anything you have to offer.

Thanks very much!
Ghostgirll

bigadaj

Sounds like you have a reasonable case, have you gone through arbitration or anything similar for an independent review?

Who would be financing the legal case, that's the thing that would concern me.

xylophone

If there is no resolution via IDRP, this will go to the Pensions Ombudsman?

https://www.pensionsombudsman.ie/cms/?q=complaints/before%20complaint

Ghostgirll

@bigadaj
Well, I'm a member of Unite the Union, but without special dispensation from London they do not generally help to finance a Civil court case, and it seems that the Employment Tribunal doesn't really deal with pensions per se, unless they can somehow be deemed to come under the heading of "Wages", so the answer is that at this stage I'm not sure about a) how it would be financed, and b) whether it needs to be financed , at least initially (i.e. if it goes to the Pensions Ombudsman then that of course doesn't require funding as such).

@xylophone
My IDRP process is 2 Stages, I've only just completed Stage 1, and am going on to Stage 2 (which is basically appealing Stage 1). I do intend to go to the Ombudsman, but they won't accept a complaint until the IDRP has been completed.

hyubh

Ghostgirll wrote: »

The complaint relates to Early Retirement pensions on redundancy that I believe would have TUPE'd along with me many years ago when my current (multi-national) employer bought over a large section of my previous - also multi-national - employer almost 20 years ago.

Your account sounds suspiciously similar to the following (Essex CC to Atkins):

http://www.pensions-ombudsman.org.uk/determinations/2016/po-7149/atkins-pension-plan/
http://www.pensions-ombudsman.org.uk/determinations/2016/po-6152/atkins-pension-plan/
http://www.pensions-ombudsman.org.uk/determinations/2016/po-3327/atkins-pension-plan/

In those cases, the right to an unreduced early pension with compensatory added years was always discretionary in the LGPS. However, this could clearly be different for different schemes.

zagfles

Might be worth a chat with the TPAS - they might ask you to send them evidence etc so they can consider it and give you an opinion. I think the pensions ombudsman like you to go to TPAS before making a complaint. http://www.pensionsadvisoryservice.org.uk

Ghostgirll

hyubh wrote: »

Your account sounds suspiciously similar to the following (Essex CC to Atkins):

As a new user I'm apparently not allowed to repost your links

In those cases, the right to an unreduced early pension with compensatory added years was always discretionary in the LGPS. However, this could clearly be different for different schemes.

Thanks hyubh, yes there are some similarities with this Atkins case, however as you point out the right to those benefits (and additional years of pensionable service) were discretionary, whereas our early retirement were available to anyone over 50 with 10 years service who was made redundant, either voluntarily or compulsorily - no consent required from either the company or the trustees of the pension scheme.

As I mentioned above that "Contested Benefits" also had another purpose in that they were immediately available to all employees who were over 50 and who were TUPE'd over to a new company. Obviously in such circumstances the over 50 employee was categorically NOT being made redundant since his employment would continue unbroken into the Transferor company as per TUPE regulations. Nonetheless the over 50 individual was entitled to an unreduced early retirement benefit, and this was due to a quirk in the actual wording of that benefit as drafted within the trust deed and rules, which stated that:
The contributing member's employment with the contributing company is terminated for reasons beyond his/her control.

The word "employment", incidentally, was itself defined within the rules as;
"Employment - means employment with the contributing company employing him/her, be that in full-time or part-time service..."

So whilst the employee's overall employment would continue (via TUPE) his EMPLOYMENT WITH THE CONTRIBUTING COMPANY nevertheless "terminated" on the day he was transferred out of the scheme and into the new Transferee company pension scheme. Hence the term "double-dipper".


There actually are 2 or 3 pensions ombudsman cases out there, where my own "Contested Benefits" are discussed and judged -and by that I mean that 3 separate individuals have previously worked for the same initial Transferor (multi-national) company as myself, albeit that the Transferee company is different in each case. And although none of these cases was upheld on behalf of the plaintiff, in each case this was NOT because the ombudsman's find was that the "Contested Benefits" did not transfer, in fact the ombudsman appears in each case to believe that they DID transfer, but rather the failure to uphold in each case was for unrelated reasons, such as not meeting the "Age" criteria, or else because they had become a Deferred Member of the Transferor scheme PRIOR to the TUPE transfer, etc (our early retirement benefits were only ever available to contributing members of the scheme, which Deferred members are not).

In spite of these ombudsman cases seeming to agree that the "Contested Benefits" did likely transfer under TUPE, during these business divestments (all with the same Transferor company as my own), my current employer has stated in response to my Formal Grievance complaint, that, "Either the Contested Benefits did not TUPE in 1998, or they did but were varied shortly thereafter".

Honestly I have to say that in my opinion that particular portion the the company's response does leave me rather speechless, particularly considering that I know the response was written by my employer's corporate London lawyers and not merely by some half-wit in HR!!?

hyubh

Ghostgirll wrote: »

yes there are some similarities with this Atkins case, however as you point out the right to those benefits (and additional years of pensionable service) were discretionary

Right, but the complainants were trying to argue they weren't really. The fact the Ombudsman disagreed is why they lost.

Obviously in such circumstances the over 50 employee was categorically NOT being made redundant since his employment would continue unbroken into the Transferor company as per TUPE regulations.

Before 2005 TUPE didn't protect ongoing pension rights at all, and even now it only does so in a limited fashion. Of course, that doesn't prevent pension rights being protected - it just means that if they are, this won't be due to TUPE as such.

The word "employment", incidentally, was itself defined within the rules as;
"Employment - means employment with the contributing company employing him/her, be that in full-time or part-time service..."

So whilst the employee's overall employment would continue (via TUPE) his EMPLOYMENT WITH THE CONTRIBUTING COMPANY nevertheless "terminated" on the day he was transferred out of the scheme and into the new Transferee company pension scheme.

I find this point completely irrelevant to your predicament. In fact, it just adds credence to the thought that the two schemes were fundamentally distinct, and as such, rights in one were not simply novated into the other.

Ultimately, your problem is what you reported in your first post:

the unreduced early retirement pension we had previously been privy to [...] does not actually exist within the Trust Deed and Rules of the Fund

If I were you, I would double-down on the 'advice at the time' aspect and drop the other two things (emphasis on TUPE rights and 'unfairness' of what the double-dippers got 20 years ago - you probably have younger colleagues who don't benefit from a good DB pension at all, and never will do).

There actually are 2 or 3 pensions ombudsman cases out there, where my own "Contested Benefits" are discussed and judged

Links/references (PO-1234)...?

Ghostgirll

Hi hyubh, I do have links for the other pensions ombudsman cases, but in posting them I would obviously be publishing the name of my past company which, for now, I was trying to avoid (I have reasons for that) so I'm going to pm you the links, hope that's ok

hyubh

Ghostgirll wrote: »

I do have links for the other pensions ombudsman cases, but in posting them I would obviously be publishing the name of my past company which, for now, I was trying to avoid (I have reasons for that) so I'm going to pm you the links, hope that's ok

That's fine.

Ghostgirll

Thanks hyubh, pm sent