The Pensions Ombudsman (TPO) has determined that the trustee of the Bradford & Bingley Staff Pension Scheme 1991 should provide a deferred pension of £1,327.94 per annum, including a GMP of £163.80 per annum, to complainant Mr N.

The complaint was made as the trustee failed to comply with the directions made by the deputy pensions ombudsman in her determination dated 11 May 2020 when calculating the additional deferred pension available to him from a transfer of pension rights into the Bradford & Bingley scheme.

The complaint was determined to be upheld against the trustee as the ombudsman considered that the method which it used to determine the additional deferred pension and retirement options available to Mr N from the Bradford & Bingley Scheme was not compliant with the directions made by the deputy pensions ombudsman.

In its conclusions, TPO determined that the benefits that the trustee granted Mr N in the Bradford & Bingley scheme was the excess over GMP element of the deferred pension available from the Clydesdale Scheme as 28 March 1986, revalued in September 2018.

TPO also reported that it did not consider that the deferred pension available to Mr N from the Clydesdale Bank, irrespective of whether the GMP of £163.80 per annum is taken into account, represented his additional deferred pension from the Bradford & Bingley Scheme.

Consequently, TPO found that the trustee’s failure to calculate the service credit and use it to determine Mr N’s retirement options from the Bradford & Bingley scheme constituted maladministration on its part.

TPO did go on to note that the trustee subsequently did try to put matters right for Mr N by asking the scheme actuary to calculate the service credit available to him from the Bradford & Bingley scheme in a way that would be fair, as recommended by the adjudicator.

TPO commented in its ruling: “I see no reason to doubt the scheme actuary’s professional view that it was reasonable to use this methodology for the purposes of these calculations.

“However, I agree with the adjudicator that it was incorrect for the trustee and the scheme actuary to: (a) disregard Mr N’s Clydesdale Scheme GMP of £163.80 per annum; and (b) use an actual S52a factor which would not have been available in October 1986 when calculating Mr N’s service credit.”

The trustee accepted that the CETV of £25,476.58, which was paid to the HSBC Pension Scheme in April 1995, only represented the cash equivalent of Mr N’s deferred pension accrued directly in the Bradford & Bingley scheme, but the trustee believed that it is no longer responsible for paying the GMP because it is already being paid to Mr N in the HSBC Scheme.

TPO concluded by upholding Mr N’s complaint and making several directions for the trustee, including directing them to use the method and assumptions of calculating the MFR in its calculations, which stipulate that the long-term financial assumption for the rate of statutory revaluation for deferred benefits is 4 per cent per annum.

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