The Deputy Pensions Ombudsman ("DPO") upheld a complaint by a scheme member that her employer and the scheme trustee had failed in their duty of care to ensure she was provided with accurate information to enable her to make an informed decision as to whether or not to opt out of the scheme.


Mrs Perrett worked for the Royal Bank of Scotland ("RBS"). She was a member of the Royal Bank of Scotland Group Pension Fund (the "Scheme") from January 1978 to 31 May 2011, when she opted out. She continued to work until December 2012 when she was made redundant.

Mrs Perrett was informed in September 2010, when she was 49 years of age, that her place of employment at RBS was under review and might be closed. She contacted the Scheme's administrators to discuss the possibility of opting out of the Scheme. The conversation was not documented, but a subsequent email from the administrators to Mrs Perrett directed her to the "Learning Modules for the Group Fund". The email stated that the modules would take 15 minutes each to go through and would "give you all you have asked for plus more so that you can be sure you have thought through everything before making choices."

The Learning Modules set out the consequences of accepting to opt out of the Scheme, and explicitly stated "if you are over age 55, and you accept voluntary redundancy, you may be able to take your pension before age 60 without it being reduced for early payment". The Learning Modules also stated that if "slightly different benefits, such as a different NPA or redundancy terms" applied to an individual, they would be informed separately.

Mrs Perrett decided to opt out of the Scheme and received a letter which advised that "if you are unsure about your decision, you may wish to take independent financial advice." The enclosed "Member Opt Out Declaration" set out a list of points under the heading "Impact of opting out of the Group Fund". One of these points indicated that Mrs Perrett would no longer be eligible for "special early retirement terms if I retire at the request of the Group". Mrs Perrett signed and returned the Member Opt Out Declaration.

In fact, under RBS' terms and the rules of the Scheme, if Mrs Perrett had remained in the Scheme until the age of 50, she would have been eligible for an immediate unreduced pension. When Mrs Perrett found this out, she tried to seek reinstatement to the Scheme on the grounds that had she known she would have had a right to take her pension three months later she would not have opted out of the Scheme as her department was earmarked for closure. She made an unsuccessful appeal under the Scheme's internal dispute resolution procedure and was subsequently made redundant in December 2012.

Mrs Perrett complained to the Ombudsman on the grounds that the Scheme had provided inaccurate and misleading information. She submitted that she had explained her circumstances during the initial telephone call and relied upon the Learning Modules she had been directed to when making the decision to opt out of the Scheme.

RBS and the trustees accepted that the administrator's handling of Mrs Perrett's enquiries was not satisfactory; however, whilst the information made available to her was inadequate and incomplete, they argued that Mrs Perrett had not been provided with misleading or incorrect information. Furthermore, when the announcement of possible redundancies was made in September 2010, a Business Services webpage was launched to assist staff with questions they might have. This had included clear information that detailed the option to take pension unreduced from age 50.

Ultimately, it was submitted by RBS and the trustees that "significant efforts" had been made to provide Mrs Perrett with the relevant information and to advise her of the importance of her decision. 


The DPO stated that she was "inclined to believe" Mrs Perrett's version of events. She further attributed weight to the fact that the email from the administrators said the Learning Modules would "give you all you have asked for plus more", and that the Learning Modules themselves stated Mrs Perrett would have been "informed separately" should different benefits apply to her.

The DPO noted the presence of the Business Services webpage but discounted its use in the context that Mrs Perrett had not been directed to the information contained there. This issue was considered in Scally v Southern Health and Social Services Board [1992]. The Court in that case found it "not merely reasonable, but necessary, in the circumstances postulated, to imply an obligation on the employer to take reasonable steps to bring the term of the contract in question to the employee's attention, so that he may be in a position to enjoy its benefit."

In the DPO's view, there was an obligation on RBS and the trustees to take reasonable steps to bring all the consequences of opting-out to Mrs Perrett's attention and in not referring her to the relevant section of the website, they had failed to do so.

The DPO directed that RBS and the trustees reinstate Mrs Perrett to active membership as from her opt out date and to provide her with an unreduced Scheme pension based on service to her redundancy in December 2012. Pension payments were directed to be backdated, with interest.


This decision highlights the importance of not only what information is given to members, but also how it is provided. Indeed, it seems to suggest that in certain circumstances it may not be enough to simply direct the member to generic information covering a number of issues (including the subject upon which the member is making a decision).  

This case reinforces the need for trustees and employers to provide relevant and appropriate information to members (notwithstanding developments such as the new guidance guarantee 'Pension Wise' which would appear to involve the provision of more generic information).