Nhs Pension Scheme · CAS-68602-Z2Z0

CAS-68602-Z2Z0

Ombudsman’s Determination Applicant: Mrs N

Scheme: NHS Pension Scheme

Respondents: NHS Business Services Authority (NHS BSA)

Royal Surrey NHS Foundation Trust (the Trust)

Outcome

Complaint summary Mrs N has complained that she was given incorrect information about taking her retirement benefits early.

Background information, including submissions from the parties Background

Mrs N was a member of the 1995 Section of the Scheme from February 1997 to January 1999. When Mrs N left pensionable service in 1999, she was awarded deferred benefits for payment at age 60. Mrs N rejoined the Scheme in August 2017 by which time the 1995 Section had closed to new entrants. She joined the 2015 Section of the Scheme. Mrs N ceased pensionable service in May 2018 and rejoined the 2015 Section in June 2018. She retired in August 2020.

The relevant regulations are The National Health Service Pension Scheme Regulations 1995 (SI1995/300) (as amended) (the 1995 Regulations). Regulation L1(3) provides:

“The member shall be entitled to receive the pension and retirement lump sum before age 60 if -

1 CAS-68602-Z2Z0 (a) the member is in NHS employment and the Secretary of State is satisfied that the member is suffering from mental or physical infirmity that makes him permanently incapable of efficiently discharging the duties of that employment;

(b) the Secretary of State is satisfied that the member is suffering from mental or physical infirmity that makes him permanently incapable of engaging in regular employment of like duration; or

(c) some other pension becomes payable to the member under any of regulations E1 to E5.

(d) the member -

(i) left pensionable employment after 30th March 2000,

(ii) has reached the normal minimum pension age or, where relevant, protected pension age, and

(iii) has applied to the Secretary of State for payment of the pension and retirement lump sum under this regulation.” (emphasis added)

“Pensionable employment” is defined as: “NHS employment in respect of which the member contributes to the scheme in accordance with this Section”.

Mrs N has explained that, in early 2020, she was considering reducing her working hours from full-time to part-time. On 15 May 2020, Mrs N received an invitation to a job interview.

On 27 May 2020, Mrs N telephoned NHS BSA to enquire about reducing her working hours and taking her retirement benefits. NHS BSA has been able to confirm that a telephone call was taken, but it has only been able to provide a brief note of the call. This is because NHS BSA migrated to a new telephone system in August 2020 and is now unable to access calls prior to June 2020. It has explained that the change in systems was prompted by an increase in the volume of calls to its service as a result of Covid-19 which impacted on its storage capacity. NHS BSA’s note records: “talked through trs and early ret reductions”.

Mrs N says she explained that she was considering working part-time and needed to know what she could expect from her two Scheme pensions. She has explained that she wanted to know if she would be able to meet her financial commitments. Mrs N says that she was told that she would “lose” 40% of her pension from the 2015 Section, which would amount to £1,996.62 per year. She says that she was told that, if she opted for a lump sum of approximately £10,000 from the 2015 Section, she would receive a pension of approximately £1,500 per year. With regard to her benefits in the 1995 Section, Mrs N says she was told that she would receive £284.21 per year and an automatic lump sum of £902.20.

On 29 May 2020, Mrs N was interviewed for the part-time role. She has explained that the salary for the part-time role was around 60% of her full-time salary. On 7 July

2 CAS-68602-Z2Z0 2020, Mrs N was offered the part-time role and she started it on 24 August 2020. Also on 7 July 2020, the Trust and Mrs N completed an application form (AW8) for her to claim her pensions. On 15 July 2020, the Trust sent Mrs N a copy of the AW8 and confirmed it had been sent to NHS BSA on 14 July 2020.

On 28 August 2020, NHS BSA contacted the Trust to inform it that Mrs N was unable to claim her 1995 Section benefits early because she had left the 1995 Section prior to 31 March 2000. It asked if the Trust could confirm that Mrs N wished to proceed with her claim for her 2015 Scheme benefits only. The Trust asked NHS BSA where this information might be found and was referred to a factsheet on the NHS BSA website. Following further emails between the Trust and NHS BSA, NHS BSA confirmed that Mrs N was not eligible to claim her 1995 Section benefits. It said it had spoken to its call centre manager and had been advised that the call handler should not have provided Mrs N with any figures over the telephone. NHS BSA confirmed that it could not pay Mrs N’s Section 1995 benefits under the 1995 Regulations. The Trust asked how Mrs N could contest this and was provided with details of the complaints procedure, which it passed on to Mrs N.

Mrs N made a complaint under the Scheme’s two-stage internal dispute resolution procedure (IDRP). NHS BSA issued a stage one decision on 19 November 2020. It said:-

• On 31 March 2000, an amendment to the 1995 Regulations1 came into force which provided for members with deferred benefits who left the Scheme on or after this date to claim early payment of their benefits from age 50. With effect from 6 April 2010, the minimum pension age was raised to 55 for members who joined the Scheme on or after 6 April 2006. Neither amendment applied retrospectively, so the position remained that Mrs N could not take her 1995 Section benefits before age 60.

• It had no discretion in the application of the 1995 Regulations.

Mrs N submitted a further complaint. NHS BSA issued a stage two IDRP decision on 22 January 2021. It said:-

• Confirmation that Mrs N could not access her 1995 Section benefits before her 60th birthday had been provided in each of her annual benefit statements. These included the caveat that these benefits could be paid early if Mrs N was eligible.

1 By virtue of the National Health Service (Pension Scheme and Compensation for Premature Retirement)

Amendment Regulations 2000 (SI2000/605) 3 CAS-68602-Z2Z0 • Mrs N had contacted it on 18 March 2018, 2 January 2019 and 27 May 2020. The information she had been provided with gave her to understand that her 1995 Section benefits could be paid early.

• Its Customer Contact Services Team were not trained in how pension benefits were calculated and should not provide this type of information over the telephone. Mrs N should have been directed to calculators on its website. Feedback had been provided to the team to prevent the error being repeated.

• There were other sources of information available to Mrs N which might have given her cause to question the information she had been provided with. An early retirement factsheet 2 available on its website showed that members with deferred benefits who left the Scheme after 30 March 2000 could choose to retire early with a reduced pension. Mrs N had ceased membership of the 1995 Section prior to this date and was ineligible to make such a claim. Its website had a facility called “Ask Us” which provided generic responses to commonly asked questions. This provided information which confirmed that, if a member had left prior to 31 March 2000, Section 1995 benefits could not be claimed early. Further information was available on page 28 of the Scheme Guide 3, which could be obtained from its website or her employer.

Mrs N’s position

2 The early retirement factsheet states: “Members with deferred benefits who left the Scheme after 30 March

2000 may also choose to retire early on a reduced pension.” 3 In the section on “Early retirement”, the 1995 – 2008 NHS Pension Scheme Guide for members states:

“Members who left this Scheme before 31 March 2000 cannot claim their benefits until age 60.” This is contained in a box labelled “1995 Section”. 4 CAS-68602-Z2Z0

The Trust’s position

5 CAS-68602-Z2Z0 NHS BSA’s position

Adjudicator’s Opinion

4 Regulation 16 provides that statements of benefits should be provided as soon as practicable but no more

than two months after the date the request is made, provided that the information has not been given to the member in the 12 months before the request. 6 CAS-68602-Z2Z0

7 CAS-68602-Z2Z0

8 CAS-68602-Z2Z0

Mrs N did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider. Mrs N provided further comments which are summarised below. I have considered Mrs N’s comments but I find that they do not change the outcome. I agree with the Adjudicator’s Opinion.

Mrs N’s further comments

5 https://www.pensions-ombudsman.org.uk/sites/default/files/publication/files/Updated-Non-financial-

injustice-September-2018-2_0.pdf 9 CAS-68602-Z2Z0

Ombudsman’s decision

10 CAS-68602-Z2Z0

6 The lump sum payable under the 1995 Regulations is three times the yearly rate of the pension: a pension

of £284.21 equates to a lump sum of £852.63. 11 CAS-68602-Z2Z0

Anthony Arter Pensions Ombudsman

17 August 2022

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