TPO orders Railpen and Abellio to pay complainant over £17,000 each

The Pensions Ombudsman (TPO) has upheld a complaint against Railpen and public transport firm Abellio, and ordered them to each make a payment of £17,506 to the complainant’s estate.

Mrs NiR complained, on behalf of the estate of her father, Mr D, that both the trustee and the employer unreasonably delayed settling Mr D’s benefits, causing the estate to incur an increased tax bill.

The sum of £17,506 was decided upon as it was one third of the difference between the gross value lump sum death benefit of £116,662 and the sum actually paid of £64,143.

Mr D was a member of the Railway Pension Scheme Great Anglia Section before he died of short illness in June 2018 without a will or completed nomination form.

In October 2019 and November 2019, the employer responded to emails from Railpen that were chasing Mr D’s death certificate, saying that it was having difficulty retrieving the death certificate.

The death certificate was sent in January 2020, followed by communications between estate members, the employer and Railpen.

The two-year period for the payment of the death benefit by Railways Pension Trustee Company Limited (RPTCL) expired on 28 June 2020, resulting in a 45 per cent tax charge on the lump sum death benefit.

TPO noted that it was RPTCL’s responsibility to ensure benefits are paid in a timely manner to the correct beneficiaries, with it being supported in this by Railpen as the scheme administrator and the employer whose role it is to gather information to present to RPTCL.

The adjudicator said there appeared to be no evidence that RPTCL was ever made aware of Mr D’s death.

They acknowledged that some responsibility for the delay should rest with Mr D’s next of kin, potential beneficiaries and representatives of his estate.

However, they noted that this did not absolve the employer or Railpen of their share of the responsibility to ensure benefits were paid in good time.

The ombudsman said they considered that Railpen’s and the employer’s collective failure to take the appropriate action to obtain the required documentation and present it to RPTCL amounted to maladministration.

Railpen and Abellio were therefore ordered to pay Mr D’s estate £17,506 each within 28 days.

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