Lost opportunity to receive deferred DB pension benefits

Bruce1472

I am currently assisting the widow of an ex-work colleague in attempting to resolve an issue with one of his three defined benefit occupational pensions.

He held a deferred pension for a period of approximately 35 years since leaving service of his first employer, with a normal retirement date of mid-2019 on reaching 65 years of age.

Unfortunately he was diagnosed with cancer mid-2018 and had by then taken early retirement from his then current (last) employer.

By the time his normal retirement date came around in mid-2019 his health had deteriorated significantly, becoming terminally diagnosed and then eventually succumbing in Spring 2020.

On approaching his normal retirement age he received notice from his middle ex-employer regarding his deferred pension with them, which he then started to receive.

By this time, being in very poor health and understandably being focussed on such issues, he didn't notice that his first employer's pensions manager had not been in contact about taking his pension deferred from 35 years ago. As a consequence he did not start to draw that pension on reaching normal retirement age.

In Autumn 2022 his widow received correspondance from the first employer's scheme manager notifying her that she was due a widow's pension from the date of her husband's death. They explained that they search for deferred pensioners who don't respond or take up their pensions at normal retirement age when they send out reminder communications just prior to reaching normal retirement age.

It turns out that the manager held a completely erroneous correspondance address on file. Letters had been sent to this address in the period leading up to his normal retirement date but obviously the manager never had any response because that address was incorrect and also claim not to have received any "not known at this address" returned mail. This address was not just a simple typo error but was completely unknown to the widow, being located in a part of the country where her husband had never lived.

Although the widow is now in receipt of her widow's pension from her husband's first employer, he missed out on starting to draw his deferred pension until his death as well as for his estate to benefit from the early "death after retirement" provisions within the scheme. A significant cause for such a situation to have arisen is down to the erroneous address data held by the scheme manager.

It would be helpful to receive feedback from fellow forum members as to whether or not the widow has a claim to recover the missed pension benefit payments from the scheme due to the administrative error made by the scheme manager.

Thanks, in anticipation.

Marcon

Bruce1472 said:

By this time, being in very poor health and understandably being focussed on such issues, he didn't notice that his first employer's pensions manager had not been in contact about taking his pension deferred from 35 years ago. As a consequence he did not start to draw that pension on reaching normal retirement age.

In Autumn 2022 his widow received correspondance from the first employer's scheme manager notifying her that she was due a widow's pension from the date of her husband's death. They explained that they search for deferred pensioners who don't respond or take up their pensions at normal retirement age when they send out reminder communications just prior to reaching normal retirement age.

It turns out that the manager held a completely erroneous correspondance address on file. Letters had been sent to this address in the period leading up to his normal retirement date but obviously the manager never had any response because that address was incorrect and also claim not to have received any "not known at this address" returned mail. This address was not just a simple typo error but was completely unknown to the widow, being located in a part of the country where her husband had never lived.

Although the widow is now in receipt of her widow's pension from her husband's first employer, he missed out on starting to draw his deferred pension until his death as well as for his estate to benefit from the early "death after retirement" provisions within the scheme. A significant cause for such a situation to have arisen is down to the erroneous address data held by the scheme manager.

It would be helpful to receive feedback from fellow forum members as to whether or not the widow has a claim to recover the missed pension benefit payments from the scheme due to the administrative error made by the scheme manager.

Thanks, in anticipation.

Two thoughts. 

A 'failure' to claim benefits at the 'right time' doesn't mean they are lost, particularly where the delay is under 6 years, as is the case here. It's certainly worth asking the scheme why they were able to find a widow but apparently didn't look for the husband when he didn't respond to correspondence about claiming his pension. If you need free, expert and impartial help to pursue this, it's available from https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-problems 

It is also worth checking if the scheme has a five year guarantee, which many DB schemes do - ie if a member dies before they have received 60 monthly instalments of pension, then any 'balance' is normally paid as a cash lump sum to a recipient of the trustees' choosing (almost invariably the spouse if there is one).

Tommyjw

Whilst i do sympathise, not least for all the ill health problems, there is unfortunately little that can be done.

Defined Contributions Schemes have a requirement to write to members atleast 4 months prior to their retirement date (target retirement/normal retirement age), and so there would be more of a cuase to question/complain why more effort was not done to check letters had been received even if not returned as wrong address for example.

For Defined Benefit Schemes, no such requirement is in place. There is best practice, and at my company for DB Schemes all members will get a letter ~6months before, and if we hear no reply we chase, and eventually attempt to trace them if we hear nothing back. But this is just good practice, not a requirement. 

The address issue itself is likely the employers fault, the administrator would only hold data given by the employer and must trust that. But as above, best practice would have been for them to check it and attempt traces regardless when nothing ever came back from the address they had. It is ultimately expected a member would keep track and update Schemes with address details, and for example query if he never got a statement on leaving the company (if that all went to this same wrong address)

Even if you could prove the absolute worse administration of the Scheme with no letters gone out, no tracing attempts made etc, ultimately as above the correct benefits are being paid, it would not be for the company or the Trustee to assume the member would have retired from the plan (rather than e.g. decide to leave it and benefit from Late Retirement increases added on), assume what option he picked, and retroactively pay those benefits, ultimately the only thing to be done now is to pay the spouse as they have done.

Marcon

Tommyjw said:

Whilst i do sympathise, not least for all the ill health problems, there is unfortunately little that can be done.

Defined Contributions Schemes have a requirement to write to members atleast 4 months prior to their retirement date (target retirement/normal retirement age), and so there would be more of a cuase to question/complain why more effort was not done to check letters had been received even if not returned as wrong address for example.

For Defined Benefit Schemes, no such requirement is in place. There is best practice, and at my company for DB Schemes all members will get a letter ~6months before, and if we hear no reply we chase, and eventually attempt to trace them if we hear nothing back. But this is just good practice, not a requirement. 

The address issue itself is likely the employers fault, the administrator would only hold data given by the employer and must trust that. But as above, best practice would have been for them to check it and attempt traces regardless when nothing ever came back from the address they had. It is ultimately expected a member would keep track and update Schemes with address details, and for example query if he never got a statement on leaving the company (if that all went to this same wrong address)

Even if you could prove the absolute worse administration of the Scheme with no letters gone out, no tracing attempts made etc, ultimately as above the correct benefits are being paid, it would not be for the company or the Trustee to assume the member would have retired from the plan (rather than e.g. decide to leave it and benefit from Late Retirement increases added on), assume what option he picked, and retroactively pay those benefits, ultimately the only thing to be done now is to pay the spouse as they have done.

You're assuming the scheme has a late retirement option at all, never mind one which can be passively triggered (ie by the member failing to respond at the point of retirement), when there's no evidence either way on that point.

Whether the administrator or the employer is at fault in respect of the address doesn't alter the fact that the member is not at fault and should not be penalised.

Given the health issues, there'd be no reason for the individual not to start drawing their benefits - and opting for late retirement would make no sense (whereas overlooking the old scheme completely, given the timing of events, is entirely credible).

There's also a likelihood that there are GMP benefits, given the age of the scheme/member, which can't lightly be disposed of...

There's another possibility that, had the correct address been used, the member could have commuted all his benefits on grounds of serious ill health (if the scheme offers that option) and taken everything tax free as a lump sum, and a widow's pension would still be payable. 

OP, there's a lot to consider here as you'll see from my answer - some if very technical. It isn't clear that the correct benefits have (and are) being paid, so I'd certainly give it a go - using the scheme's own Internal Dispute Resolution Procedure if necessary. There's nothing to lose. MoneyHelper (link in my previous post) will be able to assist in formulating a cogent argument and thus limiting the further distress for the widow.

Marcon

Bruce1472 said:

Although the widow is now in receipt of her widow's pension from her husband's first employer, he missed out on starting to draw his deferred pension until his death as well as for his estate to benefit from the early "death after retirement" provisions within the scheme. 

This suggests there'll be a 'deemed to have retired' provision in the rules of the scheme covering the situation where a member has reached the scheme's normal retirement age but hasn't started to draw their pension. Definitely worth investigating further.

Tommyjw

Marcon said:

Tommyjw said:

Whilst i do sympathise, not least for all the ill health problems, there is unfortunately little that can be done.

Defined Contributions Schemes have a requirement to write to members atleast 4 months prior to their retirement date (target retirement/normal retirement age), and so there would be more of a cuase to question/complain why more effort was not done to check letters had been received even if not returned as wrong address for example.

For Defined Benefit Schemes, no such requirement is in place. There is best practice, and at my company for DB Schemes all members will get a letter ~6months before, and if we hear no reply we chase, and eventually attempt to trace them if we hear nothing back. But this is just good practice, not a requirement. 

The address issue itself is likely the employers fault, the administrator would only hold data given by the employer and must trust that. But as above, best practice would have been for them to check it and attempt traces regardless when nothing ever came back from the address they had. It is ultimately expected a member would keep track and update Schemes with address details, and for example query if he never got a statement on leaving the company (if that all went to this same wrong address)

Even if you could prove the absolute worse administration of the Scheme with no letters gone out, no tracing attempts made etc, ultimately as above the correct benefits are being paid, it would not be for the company or the Trustee to assume the member would have retired from the plan (rather than e.g. decide to leave it and benefit from Late Retirement increases added on), assume what option he picked, and retroactively pay those benefits, ultimately the only thing to be done now is to pay the spouse as they have done.

You're assuming the scheme has a late retirement option at all, never mind one which can be passively triggered (ie by the member failing to respond at the point of retirement), when there's no evidence either way on that point.

Whether the administrator or the employer is at fault in respect of the address doesn't alter the fact that the member is not at fault and should not be penalised.

Given the health issues, there'd be no reason for the individual not to start drawing their benefits - and opting for late retirement would make no sense (whereas overlooking the old scheme completely, given the timing of events, is entirely credible).

There's also a likelihood that there are GMP benefits, given the age of the scheme/member, which can't lightly be disposed of...

There's another possibility that, had the correct address been used, the member could have commuted all his benefits on grounds of serious ill health (if the scheme offers that option) and taken everything tax free as a lump sum, and a widow's pension would still be payable. 

OP, there's a lot to consider here as you'll see from my answer - some if very technical. It isn't clear that the correct benefits have (and are) being paid, so I'd certainly give it a go - using the scheme's own Internal Dispute Resolution Procedure if necessary. There's nothing to lose. MoneyHelper (link in my previous post) will be able to assist in formulating a cogent argument and thus limiting the further distress for the widow.

You're assuming there isn't. I've worked in likely close to 100 DB Schemes and never seen a single one that doesn't increase for late retirement. Ultimately, it makes zero difference.

The member is absolutely at fault. It is the members responsibility to ensure a third party has the correct address. The member knew he had benefits, knew he had a pension, and made zero attempt to receive it, regardless of whether the company should have made more effort, that is the members responsibility to ensure correct address details were had for a pension he knew about .

You are making assumptions what a person may or may not have done. The world doesn't work on assumptions. Benefits cannot be paid on assuming what someone may or may not have done, there is nothing further to be mentioned.

It is incredibly unfair to suggest anything can happen and get hopes up. You can sympathise but also be realistic at the same time. The correct benefits have been paid, absolutely nothing will be changed.

There will be many Ombudsman decisions confirming it is not an absolute responsibility to trace a member, it is good practice, but it is the members ultimate responsibility to ensure the right address is held, and their responsibility to contact the administrator.

Marcon

Tommyjw said:

Marcon said:

Tommyjw said:

Whilst i do sympathise, not least for all the ill health problems, there is unfortunately little that can be done.

Defined Contributions Schemes have a requirement to write to members atleast 4 months prior to their retirement date (target retirement/normal retirement age), and so there would be more of a cuase to question/complain why more effort was not done to check letters had been received even if not returned as wrong address for example.

For Defined Benefit Schemes, no such requirement is in place. There is best practice, and at my company for DB Schemes all members will get a letter ~6months before, and if we hear no reply we chase, and eventually attempt to trace them if we hear nothing back. But this is just good practice, not a requirement. 

The address issue itself is likely the employers fault, the administrator would only hold data given by the employer and must trust that. But as above, best practice would have been for them to check it and attempt traces regardless when nothing ever came back from the address they had. It is ultimately expected a member would keep track and update Schemes with address details, and for example query if he never got a statement on leaving the company (if that all went to this same wrong address)

Even if you could prove the absolute worse administration of the Scheme with no letters gone out, no tracing attempts made etc, ultimately as above the correct benefits are being paid, it would not be for the company or the Trustee to assume the member would have retired from the plan (rather than e.g. decide to leave it and benefit from Late Retirement increases added on), assume what option he picked, and retroactively pay those benefits, ultimately the only thing to be done now is to pay the spouse as they have done.

You're assuming the scheme has a late retirement option at all, never mind one which can be passively triggered (ie by the member failing to respond at the point of retirement), when there's no evidence either way on that point.

Whether the administrator or the employer is at fault in respect of the address doesn't alter the fact that the member is not at fault and should not be penalised.

Given the health issues, there'd be no reason for the individual not to start drawing their benefits - and opting for late retirement would make no sense (whereas overlooking the old scheme completely, given the timing of events, is entirely credible).

There's also a likelihood that there are GMP benefits, given the age of the scheme/member, which can't lightly be disposed of...

There's another possibility that, had the correct address been used, the member could have commuted all his benefits on grounds of serious ill health (if the scheme offers that option) and taken everything tax free as a lump sum, and a widow's pension would still be payable. 

OP, there's a lot to consider here as you'll see from my answer - some if very technical. It isn't clear that the correct benefits have (and are) being paid, so I'd certainly give it a go - using the scheme's own Internal Dispute Resolution Procedure if necessary. There's nothing to lose. MoneyHelper (link in my previous post) will be able to assist in formulating a cogent argument and thus limiting the further distress for the widow.

You're assuming there isn't. I've worked in likely close to 100 DB Schemes and never seen a single one that doesn't increase for late retirement. Ultimately, it makes zero difference.

The member is absolutely at fault. It is the members responsibility to ensure a third party has the correct address. The member knew he had benefits, knew he had a pension, and made zero attempt to receive it, regardless of whether the company should have made more effort, that is the members responsibility to ensure correct address details were had for a pension he knew about .

You are making assumptions what a person may or may not have done. The world doesn't work on assumptions. Benefits cannot be paid on assuming what someone may or may not have done, there is nothing further to be mentioned.

It is incredibly unfair to suggest anything can happen and get hopes up. You can sympathise but also be realistic at the same time. The correct benefits have been paid, absolutely nothing will be changed.

There will be many Ombudsman decisions confirming it is not an absolute responsibility to trace a member, it is good practice, but it is the members ultimate responsibility to ensure the right address is held, and their responsibility to contact the administrator.

I've certainly seen schemes with no late retirement option and it could make a significant difference here. I haven't assumed anything; I've pointed out there is no evidence either way.

How can the member be 'absolutely at fault' where the member has no reason to know that the wrong address is being held? 

It's not about tracing the member - it's about paying benefits in line with the rules of the scheme. You don't normally lose the right to benefits because you don't claim on time, although many schemes have a provision where payment of long-overdue benefits (but not more recent/future benefits) becomes discretionary if the delay becomes rather too lengthy!

We don't have enough information to know what those rules say, hence the wisdom of suggesting that OP investigates. That's not raising false hopes; it's sensible.

Tommyjw

Marcon said:

Tommyjw said:

Marcon said:

Tommyjw said:

Whilst i do sympathise, not least for all the ill health problems, there is unfortunately little that can be done.

Defined Contributions Schemes have a requirement to write to members atleast 4 months prior to their retirement date (target retirement/normal retirement age), and so there would be more of a cuase to question/complain why more effort was not done to check letters had been received even if not returned as wrong address for example.

For Defined Benefit Schemes, no such requirement is in place. There is best practice, and at my company for DB Schemes all members will get a letter ~6months before, and if we hear no reply we chase, and eventually attempt to trace them if we hear nothing back. But this is just good practice, not a requirement. 

The address issue itself is likely the employers fault, the administrator would only hold data given by the employer and must trust that. But as above, best practice would have been for them to check it and attempt traces regardless when nothing ever came back from the address they had. It is ultimately expected a member would keep track and update Schemes with address details, and for example query if he never got a statement on leaving the company (if that all went to this same wrong address)

Even if you could prove the absolute worse administration of the Scheme with no letters gone out, no tracing attempts made etc, ultimately as above the correct benefits are being paid, it would not be for the company or the Trustee to assume the member would have retired from the plan (rather than e.g. decide to leave it and benefit from Late Retirement increases added on), assume what option he picked, and retroactively pay those benefits, ultimately the only thing to be done now is to pay the spouse as they have done.

You're assuming the scheme has a late retirement option at all, never mind one which can be passively triggered (ie by the member failing to respond at the point of retirement), when there's no evidence either way on that point.

Whether the administrator or the employer is at fault in respect of the address doesn't alter the fact that the member is not at fault and should not be penalised.

Given the health issues, there'd be no reason for the individual not to start drawing their benefits - and opting for late retirement would make no sense (whereas overlooking the old scheme completely, given the timing of events, is entirely credible).

There's also a likelihood that there are GMP benefits, given the age of the scheme/member, which can't lightly be disposed of...

There's another possibility that, had the correct address been used, the member could have commuted all his benefits on grounds of serious ill health (if the scheme offers that option) and taken everything tax free as a lump sum, and a widow's pension would still be payable. 

OP, there's a lot to consider here as you'll see from my answer - some if very technical. It isn't clear that the correct benefits have (and are) being paid, so I'd certainly give it a go - using the scheme's own Internal Dispute Resolution Procedure if necessary. There's nothing to lose. MoneyHelper (link in my previous post) will be able to assist in formulating a cogent argument and thus limiting the further distress for the widow.

You're assuming there isn't. I've worked in likely close to 100 DB Schemes and never seen a single one that doesn't increase for late retirement. Ultimately, it makes zero difference.

The member is absolutely at fault. It is the members responsibility to ensure a third party has the correct address. The member knew he had benefits, knew he had a pension, and made zero attempt to receive it, regardless of whether the company should have made more effort, that is the members responsibility to ensure correct address details were had for a pension he knew about .

You are making assumptions what a person may or may not have done. The world doesn't work on assumptions. Benefits cannot be paid on assuming what someone may or may not have done, there is nothing further to be mentioned.

It is incredibly unfair to suggest anything can happen and get hopes up. You can sympathise but also be realistic at the same time. The correct benefits have been paid, absolutely nothing will be changed.

There will be many Ombudsman decisions confirming it is not an absolute responsibility to trace a member, it is good practice, but it is the members ultimate responsibility to ensure the right address is held, and their responsibility to contact the administrator.

I've certainly seen schemes with no late retirement option and it could make a significant difference here. I haven't assumed anything; I've pointed out there is no evidence either way.

How can the member be 'absolutely at fault' where the member has no reason to know that the wrong address is being held? 

It's not about tracing the member - it's about paying benefits in line with the rules of the scheme. You don't normally lose the right to benefits because you don't claim on time, although many schemes have a provision where payment of long-overdue benefits (but not more recent/future benefits) becomes discretionary if the delay becomes rather too lengthy!

We don't have enough information to know what those rules say, hence the wisdom of suggesting that OP investigates. That's not raising false hopes; it's sensible.

When you leave a company, you get a leaver statement, you will also have access to pension scheme booklets etc which advise of this. If one was not received, you would look into it. If you know a pension exists but have never had any correspondance , you would look into it. It is a members responsibility.

https://www.pensions-ombudsman.org.uk/decision/2022/cas-31576-b1g1/rothesay-life-pension-plan-cas-31576-b1g1 

"It was Mr H’s responsibility to notify the Trustee/Administrator when his contact 

details changed and when he wished to retire." 

I don't understand what you mean by lost benefits. They have not lost benefits , they have been paid a spouse pension in accordance with the death in deferment section of the rules of the Scheme because the member died before taking his pension. What they are entitled to, has been paid, in accordance with the rules, there's nothing further to be looked at.

Marcon

Tommyjw said:

Marcon said:

Tommyjw said:

Marcon said:

Tommyjw said:

Whilst i do sympathise, not least for all the ill health problems, there is unfortunately little that can be done.

Defined Contributions Schemes have a requirement to write to members atleast 4 months prior to their retirement date (target retirement/normal retirement age), and so there would be more of a cuase to question/complain why more effort was not done to check letters had been received even if not returned as wrong address for example.

For Defined Benefit Schemes, no such requirement is in place. There is best practice, and at my company for DB Schemes all members will get a letter ~6months before, and if we hear no reply we chase, and eventually attempt to trace them if we hear nothing back. But this is just good practice, not a requirement. 

The address issue itself is likely the employers fault, the administrator would only hold data given by the employer and must trust that. But as above, best practice would have been for them to check it and attempt traces regardless when nothing ever came back from the address they had. It is ultimately expected a member would keep track and update Schemes with address details, and for example query if he never got a statement on leaving the company (if that all went to this same wrong address)

Even if you could prove the absolute worse administration of the Scheme with no letters gone out, no tracing attempts made etc, ultimately as above the correct benefits are being paid, it would not be for the company or the Trustee to assume the member would have retired from the plan (rather than e.g. decide to leave it and benefit from Late Retirement increases added on), assume what option he picked, and retroactively pay those benefits, ultimately the only thing to be done now is to pay the spouse as they have done.

You're assuming the scheme has a late retirement option at all, never mind one which can be passively triggered (ie by the member failing to respond at the point of retirement), when there's no evidence either way on that point.

Whether the administrator or the employer is at fault in respect of the address doesn't alter the fact that the member is not at fault and should not be penalised.

Given the health issues, there'd be no reason for the individual not to start drawing their benefits - and opting for late retirement would make no sense (whereas overlooking the old scheme completely, given the timing of events, is entirely credible).

There's also a likelihood that there are GMP benefits, given the age of the scheme/member, which can't lightly be disposed of...

There's another possibility that, had the correct address been used, the member could have commuted all his benefits on grounds of serious ill health (if the scheme offers that option) and taken everything tax free as a lump sum, and a widow's pension would still be payable. 

OP, there's a lot to consider here as you'll see from my answer - some if very technical. It isn't clear that the correct benefits have (and are) being paid, so I'd certainly give it a go - using the scheme's own Internal Dispute Resolution Procedure if necessary. There's nothing to lose. MoneyHelper (link in my previous post) will be able to assist in formulating a cogent argument and thus limiting the further distress for the widow.

You're assuming there isn't. I've worked in likely close to 100 DB Schemes and never seen a single one that doesn't increase for late retirement. Ultimately, it makes zero difference.

The member is absolutely at fault. It is the members responsibility to ensure a third party has the correct address. The member knew he had benefits, knew he had a pension, and made zero attempt to receive it, regardless of whether the company should have made more effort, that is the members responsibility to ensure correct address details were had for a pension he knew about .

You are making assumptions what a person may or may not have done. The world doesn't work on assumptions. Benefits cannot be paid on assuming what someone may or may not have done, there is nothing further to be mentioned.

It is incredibly unfair to suggest anything can happen and get hopes up. You can sympathise but also be realistic at the same time. The correct benefits have been paid, absolutely nothing will be changed.

There will be many Ombudsman decisions confirming it is not an absolute responsibility to trace a member, it is good practice, but it is the members ultimate responsibility to ensure the right address is held, and their responsibility to contact the administrator.

I've certainly seen schemes with no late retirement option and it could make a significant difference here. I haven't assumed anything; I've pointed out there is no evidence either way.

How can the member be 'absolutely at fault' where the member has no reason to know that the wrong address is being held? 

It's not about tracing the member - it's about paying benefits in line with the rules of the scheme. You don't normally lose the right to benefits because you don't claim on time, although many schemes have a provision where payment of long-overdue benefits (but not more recent/future benefits) becomes discretionary if the delay becomes rather too lengthy!

We don't have enough information to know what those rules say, hence the wisdom of suggesting that OP investigates. That's not raising false hopes; it's sensible.

When you leave a company, you get a leaver statement, you will also have access to pension scheme booklets etc which advise of this. If one was not received, you would look into it. If you know a pension exists but have never had any correspondance , you would look into it. It is a members responsibility.

https://www.pensions-ombudsman.org.uk/decision/2022/cas-31576-b1g1/rothesay-life-pension-plan-cas-31576-b1g1 

"It was Mr H’s responsibility to notify the Trustee/Administrator when his contact 

details changed and when he wished to retire." 

I don't understand what you mean by lost benefits. They have not lost benefits , they have been paid a spouse pension in accordance with the death in deferment section of the rules of the Scheme because the member died before taking his pension. What they are entitled to, has been paid, in accordance with the rules, there's nothing further to be looked at.

In an ideal world... In this case, the member didn't change his contact details and not tell the scheme; the scheme had completely wrong details, which the Ombudsman generally regards (or did during my many years as a volunteer adviser for TPAS) as maladministration.

With respect, we do not know what the rules of this particular scheme say. That's what needs to be checked. No point going on arguing here - up to OP to pursue or not, as they see fit.

Tommyjw

Marcon said:

Tommyjw said:

Marcon said:

Tommyjw said:

Marcon said:

Tommyjw said:

Whilst i do sympathise, not least for all the ill health problems, there is unfortunately little that can be done.

Defined Contributions Schemes have a requirement to write to members atleast 4 months prior to their retirement date (target retirement/normal retirement age), and so there would be more of a cuase to question/complain why more effort was not done to check letters had been received even if not returned as wrong address for example.

For Defined Benefit Schemes, no such requirement is in place. There is best practice, and at my company for DB Schemes all members will get a letter ~6months before, and if we hear no reply we chase, and eventually attempt to trace them if we hear nothing back. But this is just good practice, not a requirement. 

The address issue itself is likely the employers fault, the administrator would only hold data given by the employer and must trust that. But as above, best practice would have been for them to check it and attempt traces regardless when nothing ever came back from the address they had. It is ultimately expected a member would keep track and update Schemes with address details, and for example query if he never got a statement on leaving the company (if that all went to this same wrong address)

Even if you could prove the absolute worse administration of the Scheme with no letters gone out, no tracing attempts made etc, ultimately as above the correct benefits are being paid, it would not be for the company or the Trustee to assume the member would have retired from the plan (rather than e.g. decide to leave it and benefit from Late Retirement increases added on), assume what option he picked, and retroactively pay those benefits, ultimately the only thing to be done now is to pay the spouse as they have done.

You're assuming the scheme has a late retirement option at all, never mind one which can be passively triggered (ie by the member failing to respond at the point of retirement), when there's no evidence either way on that point.

Whether the administrator or the employer is at fault in respect of the address doesn't alter the fact that the member is not at fault and should not be penalised.

Given the health issues, there'd be no reason for the individual not to start drawing their benefits - and opting for late retirement would make no sense (whereas overlooking the old scheme completely, given the timing of events, is entirely credible).

There's also a likelihood that there are GMP benefits, given the age of the scheme/member, which can't lightly be disposed of...

There's another possibility that, had the correct address been used, the member could have commuted all his benefits on grounds of serious ill health (if the scheme offers that option) and taken everything tax free as a lump sum, and a widow's pension would still be payable. 

OP, there's a lot to consider here as you'll see from my answer - some if very technical. It isn't clear that the correct benefits have (and are) being paid, so I'd certainly give it a go - using the scheme's own Internal Dispute Resolution Procedure if necessary. There's nothing to lose. MoneyHelper (link in my previous post) will be able to assist in formulating a cogent argument and thus limiting the further distress for the widow.

You're assuming there isn't. I've worked in likely close to 100 DB Schemes and never seen a single one that doesn't increase for late retirement. Ultimately, it makes zero difference.

The member is absolutely at fault. It is the members responsibility to ensure a third party has the correct address. The member knew he had benefits, knew he had a pension, and made zero attempt to receive it, regardless of whether the company should have made more effort, that is the members responsibility to ensure correct address details were had for a pension he knew about .

You are making assumptions what a person may or may not have done. The world doesn't work on assumptions. Benefits cannot be paid on assuming what someone may or may not have done, there is nothing further to be mentioned.

It is incredibly unfair to suggest anything can happen and get hopes up. You can sympathise but also be realistic at the same time. The correct benefits have been paid, absolutely nothing will be changed.

There will be many Ombudsman decisions confirming it is not an absolute responsibility to trace a member, it is good practice, but it is the members ultimate responsibility to ensure the right address is held, and their responsibility to contact the administrator.

I've certainly seen schemes with no late retirement option and it could make a significant difference here. I haven't assumed anything; I've pointed out there is no evidence either way.

How can the member be 'absolutely at fault' where the member has no reason to know that the wrong address is being held? 

It's not about tracing the member - it's about paying benefits in line with the rules of the scheme. You don't normally lose the right to benefits because you don't claim on time, although many schemes have a provision where payment of long-overdue benefits (but not more recent/future benefits) becomes discretionary if the delay becomes rather too lengthy!

We don't have enough information to know what those rules say, hence the wisdom of suggesting that OP investigates. That's not raising false hopes; it's sensible.

When you leave a company, you get a leaver statement, you will also have access to pension scheme booklets etc which advise of this. If one was not received, you would look into it. If you know a pension exists but have never had any correspondance , you would look into it. It is a members responsibility.

https://www.pensions-ombudsman.org.uk/decision/2022/cas-31576-b1g1/rothesay-life-pension-plan-cas-31576-b1g1 

"It was Mr H’s responsibility to notify the Trustee/Administrator when his contact 

details changed and when he wished to retire." 

I don't understand what you mean by lost benefits. They have not lost benefits , they have been paid a spouse pension in accordance with the death in deferment section of the rules of the Scheme because the member died before taking his pension. What they are entitled to, has been paid, in accordance with the rules, there's nothing further to be looked at.

In an ideal world... In this case, the member didn't change his contact details and not tell the scheme; the scheme had completely wrong details, which the Ombudsman generally regards (or did during my many years as a volunteer adviser for TPAS) as maladministration.

With respect, we do not know what the rules of this particular scheme say. That's what needs to be checked. No point going on arguing here - up to OP to pursue or not, as they see fit.

Ye , nah. There is absolutely no maladministration for a pension scheme being given the wrong address by the employer and the member in question never having questioned at all during employment, upon leaving, or any point after. 

We do know what the rules say, because the spouse has been paid a pension, therefore the rules have been actioned. Its a simple matter of fact.

Bruce1472

Many thanks to Marcon and Tommyjw for the comments posted to date. They demonstrate diverse views. I'll discuss with the widow and formulate a way forward.

We are learning as we go along, following-up on this issue. Firstly, just to clarify, where I have mentioned "scheme manager" this refers to the current outsourced administrators, of which there appear to have been several over the
years. I guess that the actual management and oversight of the scheme rules and policies is down to the board of trustees on the behalf of the employer.

Marcon, we'll investigate what advice Moneyhelper can offer. I can confirm that the scheme does have a 5 year guarantee as part of its benefits.

Regarding a 'deemed to have retired' provision in the rules, we don't know if this is incorporated as we currently don't have sight of the rules. We'll request a copy.

Tommyjw, regarding the erroneous address data held by the administrators, it is not clear at the moment if that same address is also held in files solely held by the employer nor if the employer supplied the erroneous address data to one of the administrators at some time in the past. The widow recently had a confusing phone conversation with the employer which included the subject of addresses. We'll be seeking clarification from the employer.

You state that it is the responsibility of the member to keep the administrators updated with any changes of address. It is pertinent to note that the couple did move house subsequent to the subject scheme going into deferment and that the
administrators of the second of the member's schemes (which also went into deferment prior to the house move) successfully delivered their correspondance to the new address prior to his normal retirement date, so we know that they had been updated. Unfortunately, the member is no longer with us to confirm or deny if he had similarily updated the subject scheme's administrators upon moving house. The current administrators only hold the erroneous address and have no amendment history available during their tenure.The widow has been told that any amendment history from previous administrators is no longer available. This may have been valuable in proving if the administrators had actually been updated at the time of the house move.

I'll update this discussion with any developments as they occur.