The London Borough of Waltham Forest (LBWF) has been fined £1,000 by the Pensions Ombudsman (PO) for not providing necessary information to a member (Ms S), or the PO’s office, after she made a complaint.
Following redeployment and a reduction in salary in 2009, Ms S decided to retire from the LGPS and exercised her right to select a more beneficial definition of final pensionable salary.
However, Ms S complained after she was told she would actually receive £51,000 instead of the £81,000 initially quoted. The length of her pensionable service was incorrectly calculated and she was informed that her chosen final pensionable salary would also not be used for calculation purposes.
While LBWF agreed that mistakes were made when determining her final pensionable salary and pensionable service, they failed to provide an explanation to the calculation of the lump sum.
Accordingly, the PO ordered LBWF to pay Ms S £1,000 in compensation. They also must recalculate and provide an explanation on the £30,000 reduction in her quoted lump sum.
This was something of a perfect storm of mistakes in administration compounded by poor communication and handling of a member’s complaint. Complex rules inevitably lead to occasional mistakes, but proper management of the complaints process and good communication with members can easily avoid the type of sanctions imposed in this matter.
Trustees should also consider the impact of the upcoming General Data Protection Regulation on the personal data they hold on members, such as the length of pensionable service and salary, and in particular its accuracy and completeness.