Hewlett Packard Ltd Retirement Benefits Plan (PO-4065)

Subject

• HP UK has a discretionary power to provide increases to Mr Bains’ pension from the Plan (in respect of pensionable service prior to 6 April 1997). Mr Bains has complained that he has not received the increases to his pension from the Plan to which he feels he is entitled.
• Mr Bains says that before the merger of his previous scheme and the Plan the provision of discretionary increases in excess of 0% was an established custom. Mr Bains complains that this established custom was lost when the trustees of the previous scheme entered into a deed to merge that scheme with the Plan on 1 October 2006 (the Merger Deed). In entering into the Merger Deed, Mr Bains says, the Trustees therefore failed to act in accordance with their fiduciary duties and in the best interests of the beneficiaries and, as a consequence, he has suffered “substantial financial loss”.

The Deputy Pensions Ombudsman’s determination and short reasons

The complaint about HP UK is not upheld because I am satisfied that HP UK has exercised their discretion properly in respect of pension increases in accordance with the requirements set out in the Plan’s governing documentation.

The complaint about the Trustees is not upheld because the provision of discretionary increases in excess of 0% was never an established custom. Accordingly, the Trustees were under no obligation to protect it in the Merger Deed.