Railpen and Greater Anglia to compensate over settlement delay

Former Railpen member Mr D died on June 7 2018 without a will or nomination form, with employer Greater Anglia saying it was in contact with Ms N, the member’s partner. 

However, one week later, a former spouse, Ms AR, claimed her daughter, Ms NaR, was next of kin and sole beneficiary to any life policies.

Greater Anglia told Ms AR that “pension management” would decide on any division of funds, and that it would be in touch with Ms AR or Ms NaR if they were named on a nomination form, although it suggested she contact pension management.

We are disappointed with the ombudsman’s findings but will accept them

Paul Sturgess, Railpen

The train operator contacted Railpen on June 28 to advise of Mr D’s death, with the scheme requesting a “notification of death” form on July 5. 

On July 10, Mrs NiR — Mr D’s eldest daughter — contacted Greater Anglia to let it know of her father’s death.

‘Dispute in the family’ leads to 15-month wait

More than a year later, on October 17 2019, Railpen contacted Greater Anglia asking for the notification of death form, adding that no correspondence had been sent to next of kin because it had not received the form.

On October 30, Greater Anglia said it was having trouble contacting Mr D’s family to obtain a death certificate over what it believed was a dispute within the family, although this was not officially confirmed. 

This was followed by a request for an update in November, with Greater Anglia again saying it was having difficulty contacting the family for the death certificate.

The notification of death form and death certificate were sent on January 13 2020 by Greater Anglia confirming Ms N as next of kin.

At the beginning of March 2020, Ms NaR contacted Railpen about benefits payable and was later sent claim forms to complete on March 13. On March 17, Mrs NiR emailed Railpen, with the scheme providing claim forms on April 2.

On April 6, Mrs NiR sent completed forms to Railpen with her birth certificate, which named her father as Mr R. A later form from Ms NaR confirmed the names of Mr D’s other children, including Mrs NiR, Ms DR and Mr T.

In May, Railpen wrote to Greater Anglia to ask if it had proof of Mr D’s change of name, and was told in June that it had no record that Mr D was ever known as Mr R.

Meanwhile, Ms NaR confirmed that she had difficulty in finding evidence of her father’s name change. Railpen asked her to contact the Deed Poll Office for proof and again asked for Mr T’s address, adding that it was awaiting information before any decision on a lump sum could be made.

Slow and unresponsive Railpen

After raising several queries, Mrs NiR made a complaint under Railpen’s internal dispute resolution procedure on June 17 but was not treated as such by the scheme.

Mrs NiR asked what attempts had been made to find next of kin and beneficiary details by Railpen and Greater Anglia between June 2018 and January 2020, and why Railpen had taken so long to send correspondence to Ms DR when it had contact details since March/April 2020.

She also was worried that the case was not treated as a priority, considering the need to complete before the two-year payment of death benefit deadline expired on June 28. 

Mrs NiR was also concerned that Railpen could not provide details of death-in-service benefit amount, the delay in being told to contact the Deed Poll Office, and why it did not answer what would happen if they could not contact Mr T. 

All three daughters had not had contact with Mr T for more than 15 years or knew of his whereabouts but persisted in asking for his details, which was distressing for Mrs NiR.

She claimed that the service was slow and that Railpen was unresponsive and was not focusing on critical areas of member support, including death in service as it claimed.

On June 19, Mrs NiR emailed Railpen to say there was no response from the Deed Poll Office asking for advice. 

On July 3, after the two-year deadline, Railpen said it needed proof of name change telling Mrs NiR to ask Citizens Advice for help and to contact the funeral director for confirmation of who had paid the funeral bill.

Railpen later wrote to the three daughters to inform them that, as more than two years had passed, the lump sum death benefit would now be payable upon receipt of letters of administration of Mr D’s estate.

On July 29, Railpen wrote to Mrs NiR with a complaint response, rather than an internal dispute resolution procedure response, in which it noted that tax would be paid at a rate of 45 per cent.

In October, Railpen received notification that Mrs NiR had taken over all correspondence and was now administrator of her father’s estate. At the end of the month, Railpen advised that it would pay £64,142.55 — the net payment of the death benefit — and that it would pay the tax due directly to HM Revenue & Customs.

Relying on family ‘to sort matters out’

In its response to the Pensions Ombudsman, Greater Anglia said it had not sent the notification of death form to Railpen immediately because it had not received a death certificate and could not get hold of Ms N, whose phone number was no longer connected and who no longer lived at the address on file. It contacted the family through the social media accounts of one of Mr D’s colleagues.

The ombudsman’s adjudicator said it must consider why it took more than two years to settle death-in-service benefits and whether it was reasonable. 

The adjudicator claimed that there was no evidence that Greater Anglia had tried to contact next of kin after it had not received a death certificate and questioned why it only relied on Ms N, and while the situation was complex it should have gathered and presented the information to Railpen.

The adjudicator said the issue appeared to have been dropped in August and its failure to actively pursue potential beneficiaries and obtain missing information “amounted to maladministration”, which Greater Anglia disputed.

Furthermore, the adjudicator said it would only be reasonable to hold back benefits if the employer and Railpen were actively trying to find potential beneficiaries, but they had not and instead waited for the family “to sort matters out”.

The adjudicator also noted that it was unreasonable for beneficiaries to be paid a reduced lump sum because Railpen and Greater Anglia had failed to investigate potential beneficiaries between July 2018 and October 2019. 

This was disputed by Railpen, which said it had made sustained efforts to contact next of kin but the required information was not available from the family.

In its ruling, the ombudsman agreed with Greater Anglia and said some responsibility must lie with the family, which had been acknowledged by Mrs NiR, but it did not absolve Railpen or the employer.

While the complaint by Mrs NiR was upheld, the ombudsman determined that Railpen and Greater Anglia should each pay £17,500 — one-third of the difference between the gross lump sum of £116,662 and the net sum paid of £64,142.55.

Paul Sturgess, Railpen’s chief officer for benefits, said: “We are sorry for any delay that may have caused upset or inconvenience felt by Mrs NiR.

“We are disappointed with the ombudsman’s findings but will accept them. We follow strict processes following both the law and scheme rules in relation to death benefits after the sad passing of any member and, in this case, did all we could to resolve the matter in good time.

“These processes are for the protection of all members, and we sincerely sympathise with family members for their loss.”

A Greater Anglia spokesperson said: "We are very sorry for any distress caused to the family. We are investigating this case and will take any necessary action we learn from it."