Suffolk County Council Pension Fund · CAS-30618-P6K7

CAS-30618-P6K7

Ombudsman’s Determination Applicant Miss S

Scheme Suffolk County Council Pension Fund (the Fund)

Respondent Suffolk County Council (the Council)

Outcome

Complaint summary Miss S’ complaint concerns the incorrect information she received from the Council in December 2015, concerning the value of her benefits. She said that she relied on the incorrect information to defer taking her benefits and has incurred a financial loss because of her reliance.

Background information, including submissions from the parties

1 CAS-30618-P6K7 “Due to the 85 year rule you receive some protection against a full reduction being applied as follows. [sic].

I have calculated that you will meet the 85 year rule at age 58. As this is before you attain age 60, the reduction to your annual pension on pre 1 st April 2008 service is based on you receiving your pension benefits 5 years before age 60.

The reduction on your post 31st March 2008 service is based on you receiving your pension benefits 10 years before the normal retirement age, 65.

The reduction of your CARE benefits is based on you receiving your pension benefits before state pension age, which you will attain on 8 January 2028…”

“…I confirm that your normal retirement date is 08/01/2028. This is the date you are able to receive your pension without any reduction to your pension… I understand that the reduction to your pension with effect from 07/02/2019 was not stated in my colleague’s previous letter to you and I apologise for this error and any inconvenience caused…”

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“I am unable to conclude on any financial compensation to you, due to the earlier information provided…in respect of the dates and figures quoted which could have alerted you to querying the figures provided in the [December Letter], which I feel would be a reasonable expectation.”

“…applying the general test of reasonableness, can I conclude that you made decisions that a reasonable person would have done in accordance to the facts in this matter? I have regard to the 26.09.15 letter which predates the [December Letter]. It is very noticeable that the calculations in the 26.09.15 letter match those of the [December Letter]. Thus, would it have been reasonable in noting the same to have asked [the Council] for further 3 CAS-30618-P6K7 clarification before proceeding to rely on that information? In my opinion the answer is yes.

It would have been fair and reasonable to have expected further enquiry on your part, given that the calculations were the same in the 26.09/15 [sic] letter and [the December Letter] respectively.

This together with the other letters citing the 08.01.28 date further leads me to this conclusion.

That being said, [the Council] has admitted to the administrative error, however, in my opinion, that was an honest mistake on [the Council’s part].

I am therefore unable to conclude that any financial compensation is due to you for the losses you say you have incurred due to [the Council’s] administrative error.”

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The Pensions Ombudsman’s position on the provision of incorrect information

Adjudicator’s Opinion

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Miss S did not accept the Adjudicator’s Opinion and in response made the following comments:-

• She disputes that she has not incurred a financial loss. She acknowledges that by deferring, she received a higher pension in 2019 than she would have received in 2016. However, the pension she was initially told she would receive in 2019 was “significantly” higher than what she received.

• The key point is the cumulative effect of receiving her benefits in 2016 or 2019. After receipt of the December Letter, the IFA prepared “actuarial calculations” to show the effect of taking £17,000 in 2016 against taking £24,500 in 2019. Within 10 years, the cumulative sum of the latter, overtook the cumulative sum of the former.

• The IFA explained, and she understood, that the actuarial figures could never be completely accurate. However, because of the £7,500 difference between the 2016 and 2019 figures, it was clearly advantageous for her to defer.

• Therefore, she took the irrevocable financial steps, as stated in paragraph 21 above. This was on the basis that, the extra pension she would receive, would have enabled her to make up the investments she had converted into income, within a relatively short period.

• The pension she received in 2019 was £4,000 more than the pension she would have received in 2016. It would take longer for the cumulative sum to overtake what she would have received from 2016.

• Had she been provided with the correct figures in the December Letter, she almost certainly would not have deferred taking her pension and would have preserved more of her capital.

As Miss S did not agree with the Adjudicator’s Opinion, the complaint was passed to me to consider. Miss S’ further comments does not change the outcome. I agree with the Adjudicator’s Opinion for broadly the same reasons as the Adjudicator.

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I uphold Miss S’ complaint in part.

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Karen Johnston Deputy Pensions Ombudsman 3 April 2020

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