Solvay Uk Defined Benefit Pension Scheme · CAS-31857-R3M5

CAS-31857-R3M5

Ombudsman’s Determination Applicant Mr M

Scheme Solvay UK Defined Benefit Pension Scheme (the Scheme)

Respondents Solvay Pension Trustee Limited (the Trustee)

Outcome

Complaint summary

Background information, including submissions from the parties In January 2019, the Trustee wrote to Mr M and said:-

• The Scheme administrator was changing and from April 2019, the pension payments would be made by the new Scheme administrator.

• From April 2019, the pension payment date was changing to the 6th of each month in order to simplify the payroll process.

• The change did not impact the structure of the pension and the change was only for administrative purposes.

On 31 January 2019, Mr M complained about the change to his pension payment date. He said that he would be without a pension from 1 April until 5 April 2019, and asked for a bridging payment to cover the five days.

1 CAS-31857-R3M5 The Scheme administrator replied to Mr M and said:-

• The pension paid on 6 April 2019, covered Mr M’s pension from 1 April to 30 April 2019.

• Mr M would still get 12 months of pension payments in 2019.

• The pension was paid monthly in advance.

• The Scheme rules allowed the Trustees to change the pension payment date and members were not allowed to choose the pension payment date.

• If the change of payment date caused inconvenience due to existing direct debits Mr M should contact the recipients to explain the change.

On 18 February 2019, Mr M asked for a copy of the Internal Dispute Resolution Procedure (IDRP). He said his pension was not going to be paid monthly in advance when there were five days before 6 April 2019.

The Scheme administrator replied and provided a copy of the IDRP saying that:-

• The pension payment date change did not alter the pension amount.

• The Trustee had given adequate notice about the pension payment date change.

• Mr M would still receive 12 payments in one year.

• He would be without a pension from 1 April to 5 April 2019.

• On 1 March 2019, he received his pension monthly in advance but from 1 April until 5 April 2019 he would receive no pension, then on 6 April 2019 he would receive the pension monthly in advance.

• For the tax year April 2018 to April 2019 his P60 would only show 11 months pension payments.

On 22 March 2019, the Trustee replied under Stage One of the IDRP and said:-

• The change to the pension payment date was to help streamline the payroll.

• The Scheme rules allowed the date of payment to be changed by the Trustee.

• The pension paid on 6 April 2019 was in regard to the pension from 1 April until 30 April 2019.

• The Trustee also explained that the rationale behind the change of the pension payment date was to provide efficiencies across the four pension schemes. This involved appointing one Scheme administrator and consolidating the three different payrolls into one. Of the 406 pensioners receiving a pension from the

2  CAS-31857-R3M5 Scheme 78 had a payment date on the 1 st of the month but the others were on the 6th of the month.

On 3 April 2019, Mr M appealed the decision repeating his main points.

On 23 April 2019, the Trustee replied under stage two of the IDRP:-

• The pension would not be “under paid” in April 2019, as the amount paid on 6 April 2019, was the pension payable from 1 April 2019 until 30 April 2019.

• The Trustee recognised that Mr M did not have a pension from 1 April until 5 April 2019, and this was why the Trustee had provided enough notice that the pension payment date was changing.

• The majority of the pension for April would be paid in advance and the Trustee apologised for the miscommunication.

• The Trustee had the power to alter the payment date of the pension as the Scheme Rules allowed for this.

• After reviewing the impact any payment date changes, the 1st of the month was considered but the 6th had the least impact on all the pensioners of the Scheme, as it resulted in only 78 out of 406 pensioners having the payment date changed.

• The Trustees recognised the change of payment date was inconvenient for some pensioners, but sufficient notice had been given.

• A copy of the Scheme Rule extract was provided to Mr M which stated, that the Trustee could determine the regular payment dates for pensions and whether or not pensions are paid in monthly instalments, or in advance or in arrears.

Adjudicator’s Opinion

3  CAS-31857-R3M5 Mr M did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider. Mr M provided his further comments which do not change the outcome. He said:-

• He agreed the Trustee could change the date of payment and managing his direct debits was never an issue for him. However, the Trustee had never produced a current rule that the pension was not paid wholly in advance.

• The Trustee caused confusion as they continued to say the pension was paid monthly in advance right up to the last response to the IDRP.

• The mention of two payments was a “red herring” and irrelevant as the Trustee could have adjusted payments in April and May.

• It was purely “academic” to say the payment made on 6 April 2019, covered the month of April, as he was without an income for five days.

• The Trustee declined to realign everyone to 1 st of the month.

• His P60 only contained 11 months pension payments for April 2018 to April 2019 tax year so the Trustee was clearly incorrect saying it was 12 months.

Ombudsman’s decision

4  CAS-31857-R3M5

I do not uphold Mr M’s complaint.

Anthony Arter

Pensions Ombudsman 15 April 2020

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