Amersham & Wycombe College has been made to pay significant additional costs as part of a redundancy agreement despite being told there would be no cost implications.

The college offered a deferred member an unreduced early retirement pension, which would give the member access to their pension at age 56, as part of a redundancy package.

The college was required to give consent to the early retirement, and bear any additional costs for the early payment of an unreduced pension. They proceeded having been told by Buckinghamshire County Council, the relevant local authority, that there would be no additional costs.

However in reality, the additional costs amounted to more than £19,000.

The college held that it would not have given consent had it been made aware of these costs.

The PO determined that, despite the requirement to pay benefits calculated in accordance with scheme rules, the college had made an offer to the member of an unreduced early pension in return for his acceptance of redundancy and the member had agreed to those clear terms, forming a contract between the college and the member. The member therefore had a contractual entitlement to the unreduced pension as quoted to him.

The case demonstrates the importance of ensuring that all parties are certain of their position, and their obligations, before using pension entitlement as part of redundancy negotiations.