‘Fundamental duties’ overlooked as claimant misses 12 years of benefits

Applicant ‘Mr Y’ had complained that member records held by Midcounties Co-operative Pension Trustee Limited were incorrect as they showed he was an active member of the scheme from September 1992, while Mr Y claimed he had been a member since April 1980.

However, the ombudsman concluded that Mr Y did not have continuous membership of the scheme and had most likely joined a subsidiary scheme in 1985, but conclusive records of this were not kept. 

I cannot disregard the possibility that key evidence showing what happened to Mr Y’s missing benefits and who is responsible for putting matters right for Mr Y still remains to be discovered

Anthony Arter, Pensions Ombudsman

Subsidiary scheme 

The complaint arose after Mr Y’s financial adviser informed the trustee of the Midcounties scheme that the deferred pension and current cash equivalent transfer value available to Mr Y from the Scheme had been calculated using  September 1 1992, not 1980, but this was denied by the scheme following an internal dispute resolution procedure.  

The scheme was established in February 2008 following the merger of the Oxford, Swindon & Gloucester Co-operative Society Limited Employees’ Pension Scheme with the West Midlands Co-operative Employees’ Superannuation Fund.

Mr Y was employed by the Oxford & Swindon Co-op between June 1978 and January 1985, before moving to Oxford & Swindon Co-op subsidiaries J D Barclay Limited/Oxford Garage Group between January 1985 and August 1992, and Motorworld Toyota from September 1992 until August 1997.

Employees of these subsidiary companies were offered membership of pension schemes that were distinct from the Oxford & Swindon Co-operative Society Limited Employees’ Superannuation Fund, which was subsequently incorporated into the OSG Scheme.

But the scheme secretary, in an internal dispute resolution procedure decision letter dated April 11 2018, said records held for My Y were correct, and he was only entitled to benefits accrued from September 1992 to August 1997.

A ledger discovered after Mr Y disputed the IDRP decision, however, showed that he had joined the OS Fund in April 1980.

Mr Y had argued that this represented continuous membership of the scheme owing to a number of mergers across subsidiaries owned by Oxford & Swindon Co-op.

But the ombudsman concluded that the contributions paid by Mr Y prior to 1985 had been transferred into the Oxford Garage Group Pension Plan, meaning the trustee of Midcounties scheme is not liable to return the contributions made.

Mr Y had contended that Midcounties Co-operative would be liable had paperwork related to pension schemes established by J D Barclay been transferred to it, but no conclusive evidence of such an information transfer was uncovered during the case. Mr Y had also used the government's pension tracing service without success.

The trustee said that Mr Y probably received a refund of his contributions for his period of membership in the OS Fund from April 1980 to January 1985 as he needed to accrue at least five years’ pensionable service to qualify for a deferred pension in accordance with statutory legislation applicable at the time.

But the available evidence did not support the trustee’s position on this issue. Mr Y contended that he did not receive such a refund and the trustee had not been able to provide any evidence to refute his contention. The ledger uncovered after the IDRP showed that interest continued to accrue up to January 1991 on Mr Y’s employee contributions paid into the OS Fund prior to his transfer to J D Barclay. 

The case’s adjudicator noted that this would not have happened if Mr Y had indeed received a refund of his contributions.

New evidence could be discovered

The ombudsman placed blame on the Oxford Garage Group Pension Plan trustees who “should have been responsible for keeping precise details of Mr Y’s benefits, including those which were transferred into it”.

“One of the fundamental duties of a trustee is to keep accurate records of the members and their dependents,” the ombudsman’s decision read.

“If the membership data records were inaccurate or incomplete when the winding up or transfer process was being completed, this could result in the loss of benefits to those members who were not identified as being beneficiaries.”

As a result, the benefits available to Mr Y from the Oxford Garage Group Pension Plan could not be found, but the ombudsman acknowledged that this does not mean that it will always be the case. 

“I cannot disregard the possibility that key evidence showing what happened to Mr Y’s missing benefits and who is responsible for putting matters right for Mr Y still remains to be discovered.”

The ombudsman continued: “I sympathise with Mr Y’s unfortunate position. However, I do not find, from the available evidence, it has been clearly established that he was entitled to around an additional 12 years’ pensionable service in the Scheme.”

But the ombudsman upheld Mr Y’s claims surrounding the disputed IDRP decision, noting a “serious non-financial injustice” and ordered the Midcounties Scheme trustee to pay £1,000.