Pension Protection Fund · CAS-75177-D7L2

CAS-75177-D7L2

Ombudsman’s Determination Applicant Ms N

Scheme Pension Protection Fund (PPF)

Respondent The Board of the Pension Protection Fund (the Board)

Outcome

Complaint summary Ms N’s complaint is that the Board has not awarded her surviving dependant’s compensation.

Background information, including submissions from the parties The sequence of events is not in dispute, so I have only set out the salient points. I acknowledge there were other exchanges of information between all the parties.

1 The Form’s pre-prepared worded statement says:

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“I hereby direct that any lump sum amount in respect of my membership of the above Scheme which may become payable on my death shall not be paid to my Estate but shall be paid to the Trustee appointed to receive it under Rule 18C of the Scheme.

I understand that this direction is irrevocable and binding on me and on my Estate and all interested persons.”

Rule 18C provided that lump sum death benefits were paid at the discretion of the Scheme Trustees. 2 The extract applies to compensation for spouses, civil partners, or relevant partners.

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The Board’s position

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Adjudicator’s Opinion

13.1 The matters brought to TPO comprised both a complaint of maladministration and a reviewable matter (under paragraph 16 of Schedule 9 to the Act). This did not, however, affect the outcome and the case had been looked at as a whole.

13.2 Ms N said she did not understand why the Board was able to disregard the signed Form which proved how her father wanted his pension to be handled.

13.3 The PPF was brought into being by the Act. It was not, itself, a pension scheme; nor was it an insurance scheme. It was intended to provide compensation for the members of an occupational pension scheme which was unable to pay the benefits which had been promised to them. Briefly, the circumstances in which the PPF would accept a pension scheme were:

3 Since replaced by the Equality Act 2010.

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4 Under the Scheme, Ms N’s father’s pension was effectively guaranteed to be paid for five years. If he had

died within the first five years of receiving his pension a lump sum equal to the value of the pension payments which were due to be paid between his death and the end of 5 years may have been payable to one or more eligible beneficiaries at the discretion of the Scheme Trustees.

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Ms N accepts that changing the relevant legislation is outside of my remit but has asked that I issue a formal decision on her complaint.

Ms N says that she has contacted her local MP, who has forwarded their concerns to the Secretary of State for Work and Pensions. Ms N says:

“Ultimately, we feel this is the cruel misdoing of the PPF and the resolution is not morally satisfactory”.

Ombudsman’s decision

Anthony Arter

Pensions Ombudsman 31 March 2022

6 CAS-75177-D7L2 Appendix Pensions Act 2004

“(1) Schedule 7 makes provision for compensation to be paid in relation to a scheme for which the Board assumes responsibility in accordance with this Chapter, including provision for—

(a) periodic compensation to be paid to or in respect of members,”

“Regulations may provide for compensation to be payable, in such circumstances as may be prescribed, to or in respect of—

…

dependants of prescribed descriptions of persons of prescribed descriptions…”

(b) a child of the family who is financially dependent on the member, who is aged less than 25[ 5] and who is—

(i) either attending a qualifying course; or

(ii) incapable of engaging in full time paid employment due to a condition that falls within the definition of a disability under the Disability Discrimination Act 1995[ 6];”

“(1) A person shall be entitled to periodic compensation under paragraph 23 of Schedule 7 to the Act (compensation in form of dependants' benefits) in the circumstances prescribed in this regulation.

…

5 However, Regulation 7 effectively means the cut-off date is age 23.

6 The Disability Discrimination Act 1995 has been replaced by the Equality Act 2010.

7 CAS-75177-D7L2 (3)…, in the case of a surviving dependant the circumstances are where the surviving dependant provides—

(a) in the case of a natural child of the member, a birth certificate or other evidence demonstrating to the satisfaction of the Board that he was the natural child of the member;

(b) in the case of an adopted child of the member, the adoption certificate demonstrating that he was the adopted child of the member…; or

(c) in the case of any other child who is a dependant of the member at the date of the member’s death, evidence demonstrating to the satisfaction of the Board that he was a dependant child of the member at the date of the member’s death,

to the Board…”

“(3) Except where paragraph (4) applies, periodic compensation shall be paid until the surviving dependant attains the age of 18.

(4) This paragraph applies where the surviving dependant—

(a) is attending a qualifying course—

(i) until the surviving dependant leaves the qualifying course; or

(ii) attains the age of 23;

whichever is the earlier; or

(b) is incapable of engaging in full time paid employment due to a condition that falls within the definition of a disability under the Disability Discrimination Act 1995, until the surviving dependant attains the age of 23.”

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