In the case of Andrew v Royal Devon and Exeter NHS Foundation Trust, the court has partially upheld an appeal against a Pensions Ombudsman decision where the Ombudsman had failed to consider the possibility that, had the member received correct pension figures, he might have successfully sought redeployment rather than taking ill-health early retirement.
This update covers the legal position in England and Wales.
The member had been given an estimate of the benefits which he would receive on ill-health early retirement which stated that he would be entitled to a lump sum of £18,506.83 and an annual pension of £6,168.83. The member opted to take ill-health early retirement. However, it subsequently transpired that the estimate had been based on an incorrect figure for pensionable pay, and the member was actually entitled to a lump sum of £11,629.14 and an annual pension of £3,876.38.
The member complained to the Pensions Ombudsman. The Ombudsman awarded him £1000 for distress and inconvenience, but held that the incorrect figures had not caused the member financial loss. This was based on the fact that the member had been awarded a "Tier 1" pension. This involved a finding that the member's ill-health permanently prevented him from performing his current job, so it was clear that the option of remaining indefinitely in his current job was not open to the member. The member had been refused a Tier 2 pension which would effectively have involved a finding that the member was permanently incapable of regular employment. The Ombudsman recognised that this left open the possibility that the member might be capable of undertaking a different job and said, "That option is, of course, still open to him."
The judge held that the Ombudsman had made an error of law in failing to consider that there was a difference between the possibility of the member being able to apply for a job through a competitive applications process and the possibility that he might have been offered a different role pursuant to the employer's duty under the Equality Act 2010 to make reasonable adjustments for disabled employees. (It was common ground between the parties that this duty applied to the member.) Whilst the member did not have an entitlement to be redeployed to a different role within the NHS, redeployment would have been at least a possible outcome of his employer performing its Equality Act duty to make reasonable adjustments. In particular, the judge noted that the Supreme Court has held that the Equality Act duty to make reasonable adjustments is capable of extending to the placing of an employee in another post without competitive interview, if that is reasonable in all the circumstances.
The judge remitted the matter to the Ombudsman for reconsideration of the question of whether the member suffered any financial loss by reason of the fact that, in reliance on the inaccurate pension figures, he did not take steps to seek redeployment to another role with the same employer.
Complaints to the Ombudsman frequently involve misquoted pension figures. Whilst it is common for the Ombudsman to make relatively modest awards for disappointment and distress in such cases, relatively few members are able to persuade the Ombudsman that they have suffered financial loss in reliance on the figures. That requires members to persuade the Ombudsman that they would have acted differently had they received the correct figures, and the Ombudsman commonly concludes (as he did in this case) that provision of the correct figures would have made no difference to the member's decision to take early retirement. It will be interesting to see whether this case leads to the Ombudsman giving more detailed reasoning in future cases as regards the question of whether receiving correct figures would have caused the member to act differently.