The Pensions Ombudsman (TPO) has upheld a complaint against Laurus Trust regarding its processing of an ill-health retirement pension (IHRP) application, ordering it to pay £500 for the significant distress and inconvenience caused to the complainant.

Ms L complained that her then employer, Laurus Trust, took too long to process her application for an IHRP and said she was not happy with the trust’s decision to disagree with the decision maker at stage two of the internal dispute resolution procedure (IDRP) to award her £500 compensation.

Ms L's initial complaint to TPO about the trust’s decision not to award her an IHRP was settled after she was awarded an IHRP whilst the complaint was with TPO.

Ms L was notified by the trust that her employment would be terminated due to ill health, effective 31 August 2022, but that her application for IHRP had been refused.

The independent registered medical practitioner (IRMP) concluded that Ms L did not currently meet the medical criteria required for ill-health retirement eligibility. As a result, the trust said it was currently unable to release her pension benefits early

Ms L appealed this decision by invoking stage one of IDRP, stating that IRMP’s report was compiled with insufficient evidence and that she had suffered for multiple years with her conditions.

The trust reiterated in its stage one IDRP that it was unable to award Ms L an IHRP as she didn’t meet the criteria.

The trust informed Ms L that she was entitled to appeal further under stage two of IDRP with the administering authority, the Greater Manchester Pension Fund (GMPF), or dispute the IRMP’s opinion via Optima Health’s (the trust’s occupational health adviser regarding Ms L’s application for an IHRP) own appeal procedure.

The GMPF sent Ms L its stage two IDRP decision, in which it upheld Ms L’s appeal, stating that the stage one decision maker should have ensured that all the available medical evidence relating to her conditions at the time of her dismissal were considered by the first IRMP.

Given this, it referred her case back to the trust, suggesting Ms L should be paid £500 for the inconvenience caused to her.

However, the trustees upheld their original decision not to release Ms L’s IHRP and offered the option for a further review of the case subject to obtaining the opinion of a third IRMP.

This third IRMP ultimately concluded that Ms L had met the criteria for an IHRP, and the trust subsequently decided to award Ms L an IHRP, backdated to September 1, 2022.

The trustees argued that they should not pay Ms L £500 because they believed the trust had acted reasonably and adhered to appropriate timelines.

However, the pensions ombudsman, Dominic Harris, concluded that there was maladministration after reviewing the trust's actions during the initial refusal of ill health retirement and at stage one of the IDRP.

Harris said it is the role of the trust to decide if Ms L met the criteria for ill-health retirement under local government pension scheme (LGPS) regulations and can not be delegated to the IRMP.

He also noted that it appeared that only the IRMP’s view was considered, and Ms L’s concerns and the additional medical evidence should have been supplied to the IRMP for consideration before reaching a decision. He agreed that there were failings at stage one of the IDRP.

He also highlighted concerns with the second IDRP, stating: “In my view, introducing this second IDRP was unnecessary and confusing, and caused additional distress and inconvenience to Ms L.

“Had these failings by the trust at the initial stage and stage one of the IRDP not occurred, the eventual decision that Ms L was entitled to an IHRP might have been made at a much earlier stage.”

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