Scottish Widows Retirement Benefits Scheme · CAS-47277-S1V2

CAS-47277-S1V2

Ombudsman’s Determination Applicant Mrs S

Scheme Scottish Widows Retirement Benefits Scheme (the Scheme)

Respondents Lloyds Banking Group (LBG)

Outcome

Complaint summary Mrs S complained that LBG has incorrectly calculated the value of her pension benefits. This is because LBG did not include her two periods of maternity leave in the calculation of her pensionable service.

Background information, including submissions from the parties Mrs S joined the Scheme when she commenced LBG employment. During her Scheme membership she had two periods of maternity leave; 15 July 1988 to 20 March 1989 and 3 February 1992 to 30 September 1992.

In May 2016, Mrs S queried why these periods of absence did not count as pensionable service.

On 30 September 2016, Mrs S opted out of the Scheme and then subsequently transferred her Scheme benefits to Prudential on 3 January 2017.

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On 15 May 2018, LBG issued a response under stage one of the Scheme’s Internal Dispute Resolution Procedure (IDRP). It said that Mrs S had two periods of maternity leave between 15 July 1988 to 20 March 1989 and 3 February 1992 to 30 September 1992. She had been informed by the Scheme administrator that neither of these periods of maternity leave count for pensionable service purposes. This was because the Scheme Rules that were in force at the time date from 1977 (the 1977 Rules). The 1977 Rules did not contain provisions for paid or unpaid maternity leave to count for the purpose of calculating pensionable service.

“In terms of the provisions in the current Rules, which do allow maternity leave to be counted for the purposes of pensionable service, these would apply to members who commenced maternity leave from the date that the current Rules came into force. It is not the case that the current rules apply retrospectively to past contingent events or circumstances such as temporary absence from work. If the Scheme Rules were to have such retrospective effect it would be explicitly provided for in the Particular Rules, which is not the case here”.

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On 5 November 2018, Mrs S appealed the stage one IDRP response as she did not agree with it and raised her complaint under IDRP stage two.

On 4 December 2018, LBG issued its stage two IDRP response. It said:

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Summary of Mrs S’ position

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Summary of LBG’s position

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Adjudicator’s Opinion

14 TEMPORARY ABSENCE

(a) Temporary absence will (where subsection (i) applies) or may, at the discretion of the Society, (where subsection (a)(ii)) or (iii) applies) be deemed to be service for the purposes of the Scheme, subject to section (b) below, for the periods stated below where the member is temporarily absent from work with the Society for the reasons indicated: (i) sickness or accident, for the period during which he continues to receive either salary (excluding after 5 April 1977, unless any legislation demands otherwise, any maternity pay payable under the provisions of Part II of the Employment Protection Act 1975 ad amended from time to time) or sick-pay under the Society’s staff sick-pay scheme; (ii) whole-time service in the United Kingdom armed forces or any United Kingdom national service organisation or in any work of United Kingdom national importance, up to the full period of temporary absence; (iii) any reason not coming within the categories stated above, up to a maximum continuous period of 3 years.

(b) Any period of temporary absence deemed to be service under subsection (a)(ii) or (iii) above may, at the Society's discretion, be ignored in calculating pensionable service or may be deemed to be service for that purpose but not for the purpose of benefits payable on death in service.

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Ombudsman’s decision 1. Having examined all available evidence carefully, I find that there was no maladministration on the part of LBG when not including both periods of Mrs S’ maternity leave as pensionable service. My reasons for reaching this conclusion are essentially the same as those given by the Adjudicator.

When deciding whether to direct an award for distress and inconvenience, I assess each case on its facts and merits. Having carefully considered the submissions and evidence, I find that the degree of non-financial injustice which Mrs S has suffered does merit the minimum award of £500.

LBG agreed there were delays with Mrs S’ complaint and awarded £300 compensation. I do not agree this amount is reasonable for the distress and inconvenience caused to Mrs S.

When Mrs S brought this issue to the attention of LBG in May 2016, it should have promptly given her a full response. Mrs S got only received a full response in May 2018. I consider LBG’s failure to reply sooner represents poor service. My awards for non-financial injustice are modest and not intended to punish a respondent.

Therefore, I partly uphold the complaint made by Mrs S.

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Directions

Anthony Arter

Pensions Ombudsman 18 October 2022

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