Kelda Group Pension Plan · CAS-31120-W7F7

CAS-31120-W7F7

Ombudsman’s Determination Applicant Mr E

Scheme Kelda Group Pension Plan (the Plan)

Respondents Kelda Group Pension Trustees Limited (the Trustee)

Capita (the Administrator)

Outcome

Complaint summary Mr E complains that he received an incorrect annual benefit statement from the Administrator. Mr E would like a review of the error and the impact that this has had on himself and the other affected members.

Background information, including submissions from the parties The Plan is a defined benefit pension scheme and Mr E is a contributing member. On 16 February 2017, following a request from Mr E, the Administrator sent him an estimated cash equivalent transfer value (CETV) illustration of his Plan entitlement which stated that his pension was valued at £502,000.

On 10 October 2017, Mr E received an annual benefit statement that stated the estimated CETV illustration of his pension was £520,000. The statement also stated that Mr E would have to opt-out of the Plan if he wanted to receive a guaranteed CETV and transfer his entitlement.

In December 2018, Mr E received an annual benefit statement stating that his CETV illustration was £500,000. The Administrator said that:

“You may notice the value of your benefits have decreased this year compared to last year. This was due to an administrative error and we apologise for any confusion caused. Please contact us if you require further clarity on the amount of your cash equivalent transfer value.”

1 CAS-31120-W7F7 After further exchanges of correspondence with the Administrator, Mr E complained under the Scheme’s internal dispute resolution procedure (IDRP). In response to Mr E’s complaint, the Trustee said that:

• The error on the October 2017 statement was identified in March 2018. The error was a result of a previous transfer to the Plan being double-counted and only a small number of members were affected.

• When preparing the 2018 benefit statements, the Administrator was asked to carry out calculations to compare the current and incorrect transfer values. Had the error not occurred, the correct CETV illustration in October 2017 should have been £490,000.

• As the differences were small, the Administrator was instructed to include an explanation in the 2018 statement to inform members of the potential reduction in value. It felt that the explanation was sufficient, and members were advised to contact the Administrator to obtain further clarity of the figures provided.

• The incorrect CETV illustration was a result of an administrative error by the Administrator. As no member had suffered financial loss and the errors were corrected, the issue was not escalated to the Trustee when it was discovered.

• In recognition of the error the Administrator had offered Mr E £200. It felt that the Administrator’s offer was sufficient.

Mr E appealed the IDRP 1 response, he said that:

• The offer of £200 would not cover the impact that the error would have on his future retirement plans.

• He had received incorrect information on numerous occasions.

• Mr E did not agree that it was sufficient to include a statement informing members of the error and to ask members to contact the Administrator. The Administrator should have contacted all affected members to provide an explanation.

• He did not agree that the difference of £30,000 was insignificant.

• He had relied on the transfer values provided as an indication of his benefits. As they were not accurate, it would impact his future retirement plans.

At IDRP stage 2, the Trustee said that:

• It was satisfied that the error was dealt with correctly and that it would not have expected the error to be escalated to the Trustee. 2 CAS-31120-W7F7

• The difference in the CETV illustrations was small for most of the members affected by the error and it had decided that it was sufficient to include a statement in the next annual benefit statement.

• Mr E received an incorrect CETV illustration on one occasion. Mr E received correct CETV illustrations in February 2017 and September 2018.

• There was no evidence of financial loss as a result of the incorrect CETV illustration.

Adjudicator’s Opinion

Mr E did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider. Mr E provided his further comments which do not change the outcome. I agree with the Adjudicator’s Opinion and I will therefore only respond to the points made by Mr E for completeness.

3 CAS-31120-W7F7 Mr E said, in summary:-

• The Adjudicator had not addressed his complaint about the level of service he had received and how the error was handled.

• The Administrator had not been held responsible for the error or for how they had dealt with it.

Ombudsman’s decision

I do not uphold the complaint. Mr E should contact the Administrator if he wishes to accept the offer.

Anthony Arter

Pensions Ombudsman 25 February 2020

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