G Hedley v Pearl Group [R00049]

The Deputy Pensions Ombudsman found that the scheme rules had been interpreted correctly when taking the decision to deny payment of an incapacity benefit notwithstanding the fact that the member was in receipt of state incapacity benefits. It was held that whilst it would not be unreasonable to expect the Pearl Group to take into account the fact that Mr Hedley was receiving state incapacity benefits, Mr Hedley still needed to meet the tests under the rules that governed the scheme.

The Deputy Pensions Ombudsman, however, held that the failure by the Pearl Group to provide reasons as to how they reached their view that he was not entitled to incapacity benefits was, at least, open to criticism. Moreover, he stated that failure to record formally within the scheme records the precise reasons why an application has been rejected must surely amount to ‘maladministration’, although the omission did not result in any injustice to Mr Hedley in this instance.

This case serves as a warning and reminder to scheme administrators that records must be properly maintained to prevent findings of maladministration.

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