The Pensions Ombudsman (TPO) has partially upheld a complaint against HSC Business Services Organisation after it provided a scheme member with an incorrect early retirement quotation.

In August 2016, HSC sent Ms N, an employee of the Department of Health, Social Services and Public Safety (DHSS), an “Illustration of Benefits”, which showed that she was entitled to an accrued pension of £15,152 per annum and a tax-free lump sum of £45,457 on 31 July 2016.

It stated that these figures had been calculated using pensionable service of 30 years 186 days and superannuable remuneration of £39,731 per annum.

The complainant then decided to retire early on 30 November 2016 and says that she gave DHSS three months’ notice of her decision, before receiving a statement of age retirement benefits in the month of her retirement which said she was entitled to a pension of £13,766 per annum and a tax-free lump sum of £41,296 in the scheme from 1 December 2016.

After she queried why this was different from the amounts specified in her illustration of benefits, Ms N was told that, due to the fact that she had held three different jobs at DHSS between 2006 and her retirement date, HSC had calculated her actual pension benefits using a lower final pensionable salary than the one used to work out her estimated benefits.

In response, HSC sent the complainant a letter in February 2017 informing her that she was now entitled to a pension of £14,901 per annum and a tax-free lump sum of £44,703, and would receive a lump sum and arrears to make up for the lost income.

Ms N then lodged a complaint with the DHSS regarding the difference between her initially quoted benefits and the benefits she was receiving.

She also complained that the department had not informed her that her acceptance of a third job had detrimentally affected her early retirement benefits.

Her complaint was not upheld, but HSC sent another letter in January 2020 informing Ms N that, following calculations made with revised employment details, she was now entitled to a pension of £15,027 per annum and a tax-free lump sum of £45,080 and would be receiving further arrears and a small tax-free lump sum.

TPO stated that HSC’s failure to provide the complainant with the correct information about her early retirement benefits was “clearly maladministration”, agreeing with the findings of the adjudicator.

The pensions ombudsman, Anthony Arter, stated: “Although the maladministration identified has not caused Ms N any injustice in the form of actual financial loss, it is evident that she has suffered significant distress and inconvenience as a result.”

The ombudsman determined that HSC Business Service Organisation should award Ms N £500 in recognition of the significant distress and inconvenience which she has experienced dealing with the matter.

However, TPO said the complaint made against DHSS, who Ms N argued had failed to inform her that taking on a new position would be detrimental to her pension, was one of employment law, which is outside of the ombudsman’s particular jurisdiction and therefore could not be considered.

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