The Pensions Ombudsman has upheld a complaint against the NHS Pension scheme over ill health early retirement benefits, centring on regulation E2A.

‘Ms E’ disagreed with the decision by the NHS Pension Scheme not to award her ill health early retirement benefits when her NHS employment was terminated in October 2015, having been terminated on the ground of capability.

TPO has now ordered the scheme to reconsider Ms E’s appeal under the scheme’s IDR procedure, with the potential for Ms E to progress to stage two if she is not satisfied by the stage one decision.

TPO also ruled that, if on appeal, the scheme determine Ms was entitled to a pension under regulation E2A, her benefits should be paid from October 2015.

Ms E applied for early retirement on the grounds of ill health in September 2015 but was declined by the Scheme’s medical advisers for not meeting tier one of the criteria.

In February 2016, Ms E subsequently applied for the early payment of her deferred benefits. The NHS Pension Scheme warned Ms E that if these benefits were paid early, it would not be possible for it to consider putting a replace ill health award into payment, irrespective of the outcome of any appeals, to which she agreed.

Ms E contested the October 2015 ill health retirement decision using the scheme’s two-stage internal dispute resolution procedure.

However, the scheme said it was “unable to uphold Ms E’s complaint”, citing the fact that a member of the scheme could make only one formal application for the payment of benefits, which MS had already done through claiming early retirement pension.

Ms E argued that she only applied for the early retirement pension benefits due to her financial circumstances at the time, which included the threat of repossession on her house.

She also stated that she was not “in the right state of mind” to contest the 2015 decision, and subsequently provided various evidence for her ill health, including being awarded Personal Independence Payments in 2015.

In August 2018 however, the scheme also confirmed the decision not to uphold the complaint in stage two of the appeal.

In the ruling, the pension ombudsman Anthony Arter emphasised that he was “not making a finding that the 2015 decision was correct”, rather “it would not be proper for the scheme to continue to pay an incorrect pension simply because a member had requested payment of a different pension”.

TPO also disagreed with NHS Pensions’ stance that it had been discharged of its liability for Ms E’s pension once a pension had been put into payment.

The ombudsman concluded that the decision as to whether Ms E met the tier one and/or tier 2 conditions required to receive ill health benefits “remains to be seen”, finding that the scheme should have allowed Ms E to submit her full appeal of the 2015 decision for due consideration, adding that “its failure to do so amounts to maladministration”.

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