Misinformation – detrimental reliance – The case study of Mrs E

Mrs E was a member of the NHS Pension Scheme (the Scheme). Between October 1997 and March 2009, Mrs E accrued membership within the 1995 section of the Scheme. Following a five-year break in membership, Mrs E re- joined both the NHS and the Scheme and was told that future membership would accrue within the 2008 section.

In May 2016, NHS Business Services Authority (NHS BSA) wrote to Mrs E and confirmed that, as she had returned to work following employment within the public sector, she qualified for protection in the 1995 section. Between May 2016 and December 2017, Mrs E was repeatedly told that she was a protected member of the 1995 section of the Scheme and so could access her benefits at age 60 without reduction.

On 18 December 2017, Mrs E retired (aged 60 years 5 months) and applied for her benefits. On 5 February 2018, NHS BSA wrote to Mrs E and said she was not eligible for protection in the 1995 Scheme, so any benefits accrued after March 2009 would be reduced with reference to a normal pension age of 65.

NHS BSA accepted that it had incorrectly told Mrs E that she was a protected member of the 1995 section. It agreed that it had repeated this information on several occasions and made an offer of £500 to resolve the complaint.

Mrs E said that she relied on the incorrect information when making her decision to retire. She explained that she has two daughters who live in Australia and her husband is 10 years older than her. She said that her intention in retirement was to spend extended periods with her children and spend more time with her elderly parents. When asked whether she had considered deferring her benefits until her 65th birthday, Mrs E said that she had already retired by the time she was given the correct information and she could not defer her benefits as she would not have been able to meet her expenses with just the 1995 section benefits.

Mrs E’s complaint was considered by an Adjudicator. The conclusion was that Mrs E would have to successfully argue that there was a causal link between the receipt of the incorrect information and her decision to retire. Although Mrs E said that she would have altered her plans if given the correct information, she did not argue that she would have remained in work past her retirement date. In addition, it was clear that Mrs E wanted to prioritise spending time with her family. The Adjudicator did not believe there was sufficient evidence to conclude, on the balance of probability, that Mrs E would not have retired had she known of the correct benefits.

The Adjudicator also said that a complainant is expected to mitigate any potential losses. The Adjudicator concluded that as Mrs E did not attempt to return to work, she could not argue that she would have remained in work had she been given the correct information from the outset.

However, the Adjudicator did not agree that NHS BSA’s offer of £500 in recognition of the distress and inconvenience caused was appropriate. The Adjudicator said that the maladministration occurred on several occasions and lasted over a long period. Furthermore, the Adjudicator felt NHS BSA was slow to correct the error. As a result, the Adjudicator was of the opinion that the distress and inconvenience was serious and £1,000 should be paid in recognition of this.

Both parties agreed with the Adjudicator’s Opinion.