Trustees of the Yell pension scheme have been found guilty of maladministration in a case upheld by the deputy pensions ombudsman (DPO), which could lead to future conflict between sponsors and pension scheme trustees.

Following a dispute over the exact reason for the termination of his employment, a member of the plan, Mr. P J Anderson, complained that that the trustees of Yell's scheme had failed to follow the rules of the pension scheme and had incorrectly denied him early payment of his pension benefits.

Mr. Anderson also claimed that the trustee board had delayed dealing with his complaint under the Scheme's Internal Dispute Resolution Procedure (IDRP), and were not entitled to see information from the company, Yell Limited, relating to the circumstances surrounding the termination of his employment.

The DPO determined that the complaint be upheld on the grounds of the Trustees' failure to give adequate reason for their decision not to award Mr Anderson an unreduced pension, and the delay in completing the IDRP, for which the complainant was awarded £100.
The decision, according to Sacker & Partners, leaves open to question the extent to which trustees should to examine determinations made by an employer - where the pension scheme rules allow an employer to make a decision or exercise its discretion.

The law firm also said that in times of recession, employers may need to take more care in identifying and maintaining records regarding the reason for termination of employment.
Arshad Khan, an associate at Sacker & Partners, said one of the key points in this case is the blurring of the line between the responsibilities of the Company and of the Trustees under Plan rules: "In particular, whether the termination was in the interests of efficiency was expressly provided under the Plan rules as a matter to be determined by the company."

"However," he added, "the DPO concluded that while this ground was not one for the trustees to decide, the trustees nevertheless had some responsibility to satisfy themselves that the matter had been properly considered. This may result in greater conflict between the employer and trustees."

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