Case law round-up – Pensions Matter April 2014

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A pensions case law round-up  and their practical implications

Smyth (PO-833) – late payment under salary sacrifice arrangement
The Pensions Ombudsman (PO) found that an employer that delayed payment of pension contributions under a salary sacrifice arrangement was both in breach of contract and in breach of statutory requirements for timely payment.

The PO upheld a complaint by a member belonging to a group personal pension scheme. The PO found that failure by the employer to pay the contributions within a reasonable period of time was a breach of the salary sacrifice agreement. It was also a breach under the member’s contract of employment, to maintain trust and confidence between the employee and employer. Notwithstanding its contractual breach, the delays that occurred equated to maladministration for breaching statutory requirements in accordance with section 111A of the Pension Schemes Act 1993 and related regulations.

The PO directed the employer to increase the member’s fund to the level it would have been, but for the delays. It was also directed to pay the member £250 for the distress and inconvenience caused as a result of it’s actions (or lack of, in this case).

Kelly (PO-678) – ill health early retirement: certifying doctor in LGPS not “independent”
The key finding of this determination is that a medical practitioner who is employed by the provider of occupational health services to a Local Government Pension Scheme (LGPS) employing authority is not an independent registered medical practitioner (IRMP), as defined under regulation 56(1) of the Local Government Pension Scheme (Administration) Regulations 2008.

The Deputy Pensions Ombudsman upheld a complaint by a member who was refused an LGPS ill-health early retirement pension by his employer. As well as failing to obtain the required certification from a valid IRMP, the employer did not obtain and consider all relevant medical evidence. It also deferred the decision to the IRMP, rather than reaching its own decision.

The adjudicator at stage two of the subsequent appeal then failed to recognise these errors.

The Deputy Ombudsman remitted the decision back to the employing authority and directed each respondent to pay the member £250 for the distress and inconvenience caused by their maladministration.