In April 2009 we reported on the Deputy Pensions Ombudsman’s decision partially to uphold a complaint brought by Mr Parr (P) against the trustees of the Bank of New York Pension Plan and against the Bank of New York (the Bank) as employer.

P was employed by the Bank and was a member of the Bank’s pension scheme. Following ill health, P was refused long-term disability benefit (LTDB) under an insurance policy taken out by the Bank, but he subsequently took ill health early retirement as a deferred member of the plan. He complained that:

  • the Bank failed to inform him of his right to apply for an unreduced early retirement pension while an active member on the termination of his contract because of ill health; and
  • the trustees wrongly reduced the pension awarded to him as a deferred member and should not have taken into account the scheme’s funding position.

The Deputy Ombudsman upheld the first complaint, saying that the Bank should have told P that he could apply for ill health retirement as an active member, even if it would not necessarily be granted. The Bank should also have considered him for an ill health pension even if he had been refused LTDB.

The second complaint was refused on the basis that the trustees complied with the scheme rule requiring them to have regard to actuarial advice. This necessarily required them to take into account the funding implications of early payment.

Comment: this case suggests that employers may need to go to greater lengths to draw members’ attention to their ill health early retirement options.