Volunteers are often the bedrock of charitable organisations, but they are not protected from sexual harassment within those organisations.
Mrs S was employed by the East Sussex Healthcare Trust (ESHT). She was also a member of the NHS Pension Scheme (the Scheme). In September 1996, her work was outsourced, and there was a TUPE transfer to a non-NHS employer. In June 2001, Mrs S's employment was transferred back to ESHT when the service was taken back in-house. ESHT submitted a form for Mrs S to re-join the Scheme which was accepted. However, as Mrs S was over the age of 60, she was ineligible to re-join the Scheme.
In August 2014, 13 years after she had re-joined, NHS Pensions notified Mrs S that she had not been eligible to re-join the Scheme. This was the result of a concerted effort by NHS Pensions to identify ineligible members of the Scheme. ESHT reimbursed Mrs S for the contributions she made between September 2001 and March 2015, and NHS Pensions paid her interest of £1,132.71 on these contributions. Mrs S was also permitted to claim pension benefits backdated to her 60th birthday (27 January 2001), and NHS Pensions paid interest on the late payment of these benefits.
Mrs S made a complaint to the Pensions Ombudsman over the delay in NHS Pensions realising she wasn’t eligible, but NHS Pensions maintained that Mrs S had been ineligible to re-join the Scheme. However, NHS Pensions offered £1,000 compensation for the distress and inconvenience caused by its failure to realise that Mrs S was not eligible back in 2001.
The Pensions Ombudsman agreed that Mrs S was not eligible to re-join the scheme, and was not therefore entitled to receive benefits for the period in which she was ineligible. Mrs S argued that, had she known in 2001, she would have made an alternative pension arrangement. She then asked the Pensions Ombudsman to order that she be provided with pension benefits equivalent to those that she had lost. The Pensions Ombudsman decided that it was unlikely that she would have made alternative arrangements, given the higher costs of getting equivalent benefits to the Scheme in a personal pension scheme. The Pensions Ombudsman decided that Mrs S was entitled to the return of her contributions, less 20% tax and interest in addition. The Pensions Ombudsman also decided that Mrs S should be awarded £2,000 compensation for distress and inconvenience due to NHS Pensions’ maladministration, and stated that this was a higher award based on the lengthy period that NHS Pensions had failed to inform Mrs S that she was ineligible.
This case highlights the importance of ensuring that only eligible employees join pension schemes. Had the Ombudsman decided that Mrs S would have made alternative arrangements, NHS Pensions would also have needed to fund benefits equivalent to the Scheme benefits for 13 years, probably at a very significant cost. The level of compensation for distress and inconvenience was much higher than usual, no doubt influenced by the significant impact on Mrs S' pension benefits.
The problem of allowing ineligible employees to join a pension scheme is not limited to the NHS Pension Scheme, it could also rear its head in the Teachers' Pension Scheme and Local Government Pension Scheme. Employers and pension scheme administrators should ensure that they manage their pension administration carefully so that only eligible employees join to avoid significant awards for distress and/or having to fund equivalent benefits outside the scheme that could be costly.
For more information
For advice on the issues raised in this briefing or on public-sector pensions generally, please contact Doug Mullen. For more information about the work that we do at Anthony Collins Solicitors, please visit our website.
Here at Anthony Collins Solicitors, we have been hard at work advising a charity client, BICMP, on its new music project, ‘Resonance’.
Currently, the only ground for divorce is irretrievable break down of a marriage. Following a consultation, the Government has announced its intention to reform the legal requirements for divorce.
The UK Information Commissioner’s Office (ICO) has recently made some noteworthy changes to its guidance around data subject access requests (DSARs).
In the fourth part of our series on contract management pitfalls, we look at the risks arising out of varying the terms of construction contracts.
A local authority recently received a "roasting" by the Pensions Ombudsman for their delay in processing an employee’s ill-health retirement pension, following her diagnosis with advanced cancer.
The Times is looking for three or four charities to feature in their editions running in December 2019 and early January 2020.
Cliff Mills defines and talks about the importance of social value in his blog, and its potential within Greater Manchester.
Following a power outage at Anthony Collins Solicitors’ (ACS) Birmingham office, our employees and partners currently have limited functionality, including no access to emails.
Joint ventures present an opportunity for housing associations to build organisational capacity, the revenues from which could help deliver on wider social housing commitments.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.