Ombudsman rules on bonus case

In a case heard by the ombudsman it was found there was no evidence there was a contractual agreement between the member and the employer that her bonuses should be excluded for pension purposes, despite ‘Mrs C’ receiving regular letters from her employer detailing this for a number of years.

The difference between Mrs C’s basic pay (£108,600) and total pay (around £180,000, including bonus) was described by lawyers as “significant”.

Robin Ellison, partner at Pinsent Masons, said the woman was lucky to win the case. “Other judges would have ruled she was a senior member of staff and therefore had no excuse for not reading the letters she’d been sent all along,” he said.

Anne-Marie Winton, partner at Nabarro, said: “What was unusual in this scheme was that bonuses were pensionable unless agreed otherwise between the member and employer.

“The ombudsman was unimpressed by the argument that ‘passive acceptance’ by a member of bonuses stated as non-pensionable (ie an implied agreement) was enough to show agreement, because the impact of whether or not bonuses were 
pensionable was not immediate.”

Arshad Khan, a solicitor at Sackers, said: “The mere fact that she had been paid bonuses over the years and was told they were non-pensionable did not equate to an agreement that the bonuses were excluded for pension purposes.”