The Pensions Ombudsman (TPO) has partially upheld a complaint against Aon, GE Pension Trustees Limited and Willis Towers Watson (WTW) following a complaint concerning the communication of incorrect information.
The complainant, Mrs D, claimed she had been provided with incorrect information about the early retirement benefits available to her by Aon, her scheme’s former administrator, and that her trust in this information was considerably detrimental to her finances.
She also stated that WTW, the scheme’s current administrator, had failed to provide her with a revised early retirement quotation in a timely manner, causing her distress and inconvenience.
In March 2018, Mrs D had asked Aon to provide her with details of the benefits available to her from the scheme assuming she retired early on her 59th birthday in July 2018.
Aon’s response informed her that retiring on that date would see her entitled to estimated scheme benefits of a full pension of £12,473.66 per annum or a maximum tax-free lump sum of £65,187.78 plus a residual pension of £9,778.17 per annum, significantly higher than a quotation from two years prior.
The communication also stated: “The benefits quoted are estimates and are not guaranteed – we will let you know the actual amounts once you have confirmed which option you would like to take, and we have all the information we need to work out your benefits...
“Your benefits are administered by us…on behalf of the trustee in line with the trustee’s instructions. We are authorised by the trustee to pay your benefits in accordance with your entitlement.
"In the event of a conflict between the figures we have quoted and your actual entitlement, your benefits will be strictly limited to your entitlement as provided in the governing documentation.”
Mrs D contacted Aon in both April and July 2018 to check that these figures were correct and was told both times by the scheme administrator that they had been correctly calculated.
However, in October 2018 she asked WTW, the scheme’s new administrator, for details of the benefits available to her if she retired on her 60th birthday, requesting an update two months later when the quotation had not yet been sent.
WTW apologised for the delay and sent a quotation in March 2019 which said she would be eligible for a full pension of £5,999.88 per annum or a maximum tax-free lump sum of £31,185.53 plus a residual pension of £4,677.84 per annum.
When asked why the figures differed so much from those provided around a year earlier by Aon, WTW stated that its figures were correct and that the previous administrator had made mistakes with its calculations.
Mrs D complained to WTW that she had relied on the higher benefit figures when making her decision to close the consultancy business that she had operated for around 20 years and had used the incorrect figures to determine that she could sacrifice her business income and just about make ends meet until she was in receipt of her state pension.
She added that the delay in providing her with the March 2019 quotation exacerbated matters because she had continued to invest her time and savings to reskill herself in the interim.
She then complained to the scheme’s internal dispute resolution procedure, which was not upheld by the trustee, before the complaint was escalated to the ombudsman.
The ombudsman decided that Aon’s actions and WTW’s failure to provide a quote in a timely manner amounted to maladministration, but that Mrs D was fundamentally only entitled to the benefits provided by the rules of the scheme.
TPO also concluded that it was not reasonable for Mrs D to have accepted that the figures provided in the 2018 valuation were correct, due in part to the major increase from a quotation issued just two years beforehand, and noted that Aon had not stated that the benefits were guaranteed.
Even so, both the trustee and Aon were instructed by the ombudsman to each pay Mrs D £1,000 within 21 days of the decision in recognition of the severe non-financial injustice which she had suffered dealing with this matter.
TPO explained: “Although it was the adjudicator’s opinion that Mrs D had not suffered any actual financial loss as a direct consequence of the maladministration identified above, it was clear that she has experienced severe distress and inconvenience.
"The adjudicator noted that the trustee and Aon had each offered Mrs D a goodwill award of £1,000 in recognition of this. In the adjudicator’s view, this award of £2,000 was equitable and in line with what I would likely direct the trustee and Aon to pay her.”
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