In the majority of cases where incorrect benefit information has been provided by trustees or administrators both the courts and the Pensions Ombudsman conclude that the individual is entitled only to the benefits actually promised under the rules of the scheme (with the Ombudsman making a nominal award for distress and inconvenience).
However, in a recent case, the Ombudsman has held that incorrect information given to the member, Mr W (Mr Wilson – 82081/1), misled him into believing that if he accepted redundancy a full immediate pension would be paid to him. This lead to him missing an opportunity for further employment. The Ombudsman concluded that had Mr W been informed of the true position he would not have accepted redundancy but would instead have applied for an alternative position. In fact there was only one other candidate for the position Mr W would have applied for and the Ombudsman found he would have had a 50/50 chance of securing the job. His loss was therefore assessed as 50 per cent of the salary he would have received in that position to age 65, plus future pension accrual to that age. However, the Ombudsman found that as Mr W had been willing to accept redundancy plus an immediate pension, the amount payable should be capped at the value of the redundancy payment plus pension – this was assessed at around £235,000.