Mr N (CAS-71351-P8X2) – trustee had agreed to keep member updated on the progress of the GMP equalisation project but had failed to do so

Overview

TPO has partially upheld a complaint relating to the timing and communication of a trustee’s GMP equalisation and rectification project as well as its failure to maintain historical member records.

Background

On 26 October 2018, Mr Justice Morgan held that schemes are under a duty to equalise for the effect of GMPs (“the No.1 judgment”). Whilst the judgment approved certain methods for achieving equalisation, some key questions were left unanswered.

Over two years later, on 20 November 2020, the High Court handed down a further judgment which clarified certain matters relating to past transfers out (“the No. 3 judgment”).

Facts

Mr N was a member of Volkswagen Group Pension Scheme (the “Scheme”) until he transferred out on 5 April 1991.

Following the No.1 judgment, the trustee provided various updates to the Scheme’s members. However, as a former member of the Scheme, Mr N would not have received these communications.

On 21 December 2020, Mr N contacted the Scheme to ask for details of the GMP calculation at the time he had transferred out and the calculation based on the No 3 judgement.

After Mr N had chased his request a couple of times (on 25 January 2021 and 2 February 2021), the administrator responded on 16 February 2021. In this response, it:

• explained that the Trustee would be considering the court ruling and that this process could take many months
• assured Mr N that he would be contacted at the appropriate time to inform him if a top up payment was to be made, and
• asked for a copy of Mr N’s leaver statement and details of the policy he had transferred to as it did not hold any of this information due to the time elapsed and change of administration providers.

Further email exchanges between Mr N and the administrator took place during March and April 2021 culminating in Mr N complaining under the scheme’s IDRP in 2021 and then bringing a claim to TPO.

Decision

GMP equalisation plan and timing

TPO commented that GMP equalisation should not be unnecessarily delayed, but considered that, given its complexity it was understandable that it would take a reasonable period of time to implement. In his view, the Scheme’s equalisation project had not, at that point, been unreasonably delayed. Therefore, this part of the complaint was not upheld.

Incomplete pension records

TPO acknowledged Mr N’s concern that his pension records appear to be incomplete but noted he transferred out of the Scheme “some considerable time ago and that, in any event, the amount of data kept in respect of past transfers is limited”. TPO also noted that Mr N had failed to demonstrate any loss as a result of the perceived maladministration. Therefore, this part of the complaint was not upheld.

Communication

TPO determined the Trustee had agreed to keep Mr N updated on the progress of the GMP equalisation project but had failed to do so. He therefore upheld this aspect of the complaint and awarded Mr N £500 for the distress and inconvenience this maladministration caused him.

Comment

This case highlights the importance of good communication, especially where trustees have agreed to keep a member updated on progress.

It is reassuring to see TPO acknowledging that GMP equalisation and rectification projects are difficult and complicated and take a reasonable period to implement, although they should not be unnecessarily delayed.