The Pensions Ombudsman (TPO) has upheld a ruling against NHS Business Services Authority (BSA) after a complainant alleged his pension had been damaged by a lack of information.

Dr N complained that he had not been provided with the correct level of information when he was deciding to purchase additional years of contributing service under the scheme in order to increase his pension benefits.

Dr N worked as a clinical clerk or locum house officer for 51 days between 21 October 1979 and 24 December 1980, which he contended should not be defined as reckonable service.

He then worked as a house physician, senior house officer and trainee practitioner until he qualified as a practitioner on 1 February 1986.

He had written to NHS BSA in 1981, expressing interest in purchasing extra years of superannuation, after being told by his local office that such a purchase would not be allowed as his superannuation had started more than 12 months prior, in October 1979.

NHS BSA’s response said he was eligible to purchase up to seven additional years and explained that “for each added year purchased your annual pension and lump sum retiring allowance would be increased by 1/80th and 3/80ths respectively of your superannuable pay in the final year of service (or the best of the last 3 years).”

He applied to purchase an additional five years for 10 years of monthly instalments of £39.02, which his employer had explained would result in an increase in his pension of £337.50 and in his lump sum of £1,012.50, based on his current salary of £5,400.

The application was approved, with the first payment made in July 1981.

In November 2013, Dr N’s financial adviser found that the added years were giving him a pension of £58,154, but not having the added years would have actually resulted in a pension exceeding £61,000, leading him to request a de-application of the additional years contract.

NHS BSA responded that it had calculated that the best option for Dr N was to dynamise all his officer and practitioner pay in order to produce a practitioner pension, including his added years.

However, the financial adviser calculated that this would produce a pension of just £63,357, compared to a pension of £66,884 if he had simply not purchased his added years.

NHS BSA had credited Dr N’s years prior to his qualification as a practitioner, giving him 10 years and 51 days of reckonable service as an officer up until the time he became a practitioner.

This was due to Regulation 72, which stated that any person on first becoming a practitioner, other than an assistant, was entitled to reckon 10 years or less of contributing service which would be treated as service as a practitioner.

The remuneration received in respect of that service would then be disregarded and, for the purposes of calculating any benefit, the total uprated remuneration as a practitioner being increased by the same proportion as the service as a practitioner had been increased.

Mr N’s complaints included the contentions that NHS BSA should have refunded his contributions for the 51 days he worked in 1979 and 1980, that his additional years should have been added as practitioner service rather than officer service, and that it had not been clear this had not been the case as his pension estimates had come in the form of a single figure rather than a breakdown.

TPO said Dr N’s complaint raised two key questions; whether his 51 initial days worked should count as reckonable service and whether he should have been given more warning about the potential disadvantages of purchasing more years.

The ombudsman found that the 51 days counted as reckonable service because Dr N had not received contribution refunds for this period, though it found the information provided to him had been appropriate, though acknowledged that it did not cater for the situation he now found himself in.

TPO directed NHS BSA to calculate Dr N’s benefits on the basis that regulation 72 had applied to him when he qualified as a practitioner, with his added years applied from the date on which he paid the final instalment in 1991 and “whichever sub-paragraph of paragraph 9 of schedule 2 provides Dr N with the most favourable benefits” was applied.

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