Nhs Pension Scheme · CAS-82342-D5V2

CAS-82342-D5V2

Ombudsman’s Determination Applicant Miss G on behalf of the Estate of Mrs G

Scheme NHS Pension Scheme (the Scheme)

Respondents NHS Business Services Authority (NHS BSA)

East Lancashire Hospitals NHS Trust (the Trust)

Complaint Summary

Summary of the Ombudsman’s Determination and reasons The complaint should be upheld against NHS BSA and the Trust for the reasons outlined between paragraphs 56 and 99. Please refer to paragraph 100 for details of the actions required of NHS BSA and the Trust in recognition of the maladministration I have identified.

Detailed Determination Material facts

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.

The Scheme is administered by NHS BSA on behalf of the Department of Health and Social Care, who act as the Scheme Manager. 1 CAS-82342-D5V2 NHS BSA administer the Scheme in accordance with the NHS Pension Scheme Regulations 2015 (as amended) (the 2015 Regulations). See appendix for extracts of the relevant 2015 Regulations.

On 28 July 2020, Mrs G applied for ill health early retirement (IHER) and began completing the AW33 forms.

On 31 July 2020, the Trust completed the employer section of the AW33E forms for Mrs G’s IHER application. Thereafter Mrs G was referred onto occupational health. Under the rehabilitation period section of the forms the Trust said “[Mrs G] has been told she has a few months to live”.

On 24 August 2020, the Trust’s occupational health adviser completed the outstanding section of the AW33E forms and said that Mrs G’s prognosis was poor and that she was under palliative care.

On 28 August 2020, NHS BSA received the completed IHER application.

On 1 September 2020, NHS BSA informed Mrs G that her IHER application was accepted and that she was eligible to receive a Tier 2 IHER award.

On 26 October 2020, Mrs G telephoned NHS BSA to query when she would receive her IHER retirement benefits. The NHS BSA representative explained that it was unable to provide any IHER figures until it received form AW8 from the Trust.

On 10 November 2020, the Trust emailed NHS BSA and asked for Mrs G’s IHER award figures to enable the completion of form AW8.

On 13 November 2020, a capability hearing was held to discuss Mrs G’s IHER award, and her last date of employment. Mrs G was unable to attend the hearing, so her union representative went in her place.

On 28 November 2020, the Trust sent NHS BSA the necessary pensionable service and salary information that NHS BSA needed to calculate Mrs G’s IHER entitlement.

On 30 November 2020, NHS BSA provided the Trust with an illustration of the IHER benefits available to Mrs G and outlined that she could choose:

On 1 December 2020, Miss G emailed NHS BSA, on behalf of Mrs G, and said that Mrs G was yet to receive any IHER figures. Consequently, she was unable to complete and return form AW8.

On 2 December 2020, NHS BSA informed Miss G that it was for the Trust’s payroll to provide the information it needed to calculate the IHER award.

2 CAS-82342-D5V2 On 8 December 2020, NHS BSA provided the Trust with additional IHER figures for Mrs G.

On 17 December 2020, the Trust’s payroll team sent Mrs G her IHER award figures.

On 24 December 2020, Mrs G sent the completed form AW8 to NHS BSA and said that she wished to commute her IHER entitlement and receive a SIH lump sum.

On 15 January 2021, Miss G telephoned NHS BSA to query the payment of Mrs G’s SIH lump sum. The NHS BSA representative advised that form AW341 needed to be completed by one of Mrs G’s doctors, confirming that her life expectancy was below 12 months. On receipt of this form the SIH lump sum could be paid.

On 20 January 2021, Miss G and Mrs G telephoned NHS BSA as they were concerned that Mrs G might die before the SIH lump sum was paid (the Call). The representative explained that as long as NHS BSA was in receipt of forms AW8 and AW341, if Mrs G died before her employment end date, the SIH lump sum would still be payable as opposed to a DIS lump sum.

On the same day, Mrs G and Miss G telephoned the Trust and asked it to bring Mrs G’s employment end date in line with the date of form AW341, 20 January 2021. Miss G explained to the Trust representative that Miss G held a Lasting Power of Attorney (LPA) for Mrs G’s property and financial affairs.

On 22 January 2021, the Trust corresponded with NHS BSA about the payment of Mrs G’s SIH lump sum, employment end date and retirement date. According to the Trust’s telephone call notes, the NHS BSA representative said that a LPA did not extend to financial instructions over Mrs G. The NHS BSA representative said that if Mrs G was of sound mind, it needed a signed letter from her asking for her retirement date to be amended. If she lacked mental capacity, it needed a letter from a medical professional. NHS BSA said that to amend Mrs G’s retirement date, the Trust needed to complete form AW171.

On 24 January 2021, Miss G submitted a complaint to the Trust about the delays in paying the SIH lump sum. She said that there was an unacceptable delay in arranging for Mrs G to attend occupational health and in attending the capability hearing. These events contributed to delays in ending her employment and providing IHER illustrations. She also said that her mother was not invited to her own capability hearing, instead her union representative was contacted about the hearing.

On 25 January 2021, Mrs G died.

On 26 March 2021, the Trust issued its complaint response to Miss G and said that:-

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On 30 March 2021, Miss G informed the Trust that she was not satisfied with its response, so she wished for the matter to be escalated.

On 7 April 2021, the Trust’s Head of HR wrote to Miss G and said it was Mrs G’s decision not to receive pay in lieu of notice, and to remain employed until 4 February 2021. NHS BSA told the Trust that it could not amend Mrs G’s retirement date without express instruction from Mrs G herself, or until it received medical evidence that Mrs G did not have the mental capacity to make this decision herself.

On 29 April 2021, Miss G submitted a formal complaint under stage one of the Scheme’s Internal Dispute Resolution Procedure (IDRP) and said, in summary, that:-

On 26 May 2021, the Trust emailed NHS BSA and explained that there were a number of delays in the Trust’s management of Mrs G’s absence. It took one and a half months to refer Mrs G to occupational health and complete her IHER application.

5 CAS-82342-D5V2 From September 2020 to November 2020, there was a further two-month delay in scheduling Mrs G’s capability hearing. If it was scheduled earlier, then her employment end date would have been earlier and so would her retirement date. The Trust had previously asked for Mrs G’s retirement date to be amended, but they were informed that as Mrs G had already died, to do so would be fraudulent. It asked, in light of the delays it caused, if Mrs G’s retirement could be amended to allow for the payment of the SIH lump sum.

On the same day, NHS BSA responded to the Trust and noted that it initially requested for Mrs G’s retirement date to be amended to 22 January 2021. However, on 26 January 2021 NHS BSA was informed that Mrs G died on 25 January 2021. The payment of a SIH lump sum was only available on retirement. Mrs G died before the last date of her employment, so all that remained payable was a DIS lump sum. Matters relating to service termination dates were between the employee and employer. To posthumously change Mrs G’s employment end date would be considered as an election against the Scheme.

On 7 July 2021, NHS BSA provided its stage one IDRP response to Miss G and said:-

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“I appreciate that the employer has tried to abide by [Mrs G’s] wishes, however the matter of termination of employment is between the employer and employee. To now try and change the date of termination of employment would be considered as selection against the Scheme. Any complaint regarding the agreed date of termination of employment or delays in managing [Mrs G’s] absence is a matter between [Mrs G’s] family and the employer.”

On 29 September 2021, Miss G asked for her complaint to be investigated under stage two of the IDRP. She submitted that collective failings on the part of NHS BSA and the Trust meant that Mrs G did not receive any benefits before she died. She believed it was NHS BSA who denied Mrs G an earlier retirement date. If this date was brought forward the higher SIH lump sum would have been paid. NHS BSA also denied the Trust the opportunity to amend Mrs G’s employment end date after it accepted that the Trust was responsible for a three-and a half-month delay in processing Mrs G’s IHER application and capability hearing.

On 8 November 2021, NHS BSA provided its stage two IDRP response and said, in summary:-

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Miss G’s position on behalf of the Estate

Mrs G requested IHER figures on a number of occasions between August 2020 and December 2020. She needed this information to make an informed decision on how to claim her benefits. She was unsure of the date her IHER award would be paid from, how much she would receive, or how long she would live for due to her illness.

If Mrs G was actually invited to her own capability hearing she may have been made aware of her IHER award entitlement and when it would be paid. Consequently, she may then have elected to receive pay in lieu of notice.

She informed the Trust and NHS BSA, in December 2020 and January 2021, that Mrs G’s condition was declining and that she was on palliative care. Mrs G was aware of the difference between the SIH lump sum and the DIS lump sum and wanted the SIH lump sum to be paid before her death.

Based on information she received as part of a freedom of information request; a telephone call took place between the Trust and NHS BSA on 22 January 2021. During this call the Trust explained that Miss G wanted Mrs G’s employment end date and retirement date to be amended to 20 January 2021, with any pay in lieu of notice

8 CAS-82342-D5V2 paid to her. The NHS BSA representative appeared to infer that a written statement, or a doctor’s note, was required to approve such a change. NHS BSA advised that to change the end date of service, form AW171 needed to be submitted. However, NHS BSA also advised that Mrs G’s last date of service should not be amended.

It was unclear why NHS BSA did not accept her and the Trust’s request for Mrs G’s employment end date to be brought forward. She held a LPA over Mrs G’s property and financial affairs, so she was able to make decisions on Mrs G’s behalf. NHS BSA was provided with a copy of the LPA. Section five of the LPA was titled “when do you want your attorneys to be able to make decision”. Mrs G ticked “as soon as my LPA has been registered”.

She spoke with NHS BSA on 15 January 2021, and she was informed that form AW8 was not received from the Trust until 12 January 2021. This form should have been submitted four months earlier than when it was. Thereafter, she had to contact her mother’s GP to attain a prognosis on her life expectancy so that form AW341 could be completed. This form was completed and NHS BSA received it by 21 January 2021.

In January 2021, a total of four NHS BSA representatives told her that as long as form AW8 and AW341 were received by NHS BSA, even if Mrs G died before her last day of service, the SIH lump sum could still be paid.

She questioned why, if the termination of an employee’s service was a matter between the employee and the employer, did NHS BSA tell the Trust not to amend Mrs G’s employment end date.

There was, in her view, a lack of competence and collaboration between NHS BSA and the Trust in facilitating Mrs G’s requests. Mrs G was suffering from end stage cancer while trying to navigate the failing process between two organisations. This caused her significant distress and upset during an already difficult time in her life.

NHS BSA’s position

Form AW341 was received on 21 January 2021, this form allows an eligible individual to commute their IHER benefits into a single lump sum if their life expectancy was less than 12 months. Sadly, Mrs G died on 25 January 2021, which was before her employment end date of 4 February 2021, which was extended to 23 March 2021 to account for untaken annual leave.

Chapter 3 paragraph 20(3) of the 2015 Regulations provides that an individual’s pensionable service ends when a payment is made in regard to unused annual leave. As Mrs G had untaken annual leave the end date of her pensionable service was extended. After Mrs G died her benefits could only be treated under the terms of DIS.

There was no entitlement to the payment of an IHER award until the criteria under regulation 90 were met. Regulation 90(1)(b) stated that a Tier 2 IHER award was payable if the applicant met the Tier 2 requirements. Regulation 90(2)(d) required an

9 CAS-82342-D5V2 individual’s employment to be terminated by way of physical or mental incapacity. At the time of Mrs G’s death, she was still employed by the Trust, so the Tier 2 requirements were not met. NHS BSA was unable to authorise the payment of a SIH lump sum.

The Trust’s position.

In the week commencing 14 September 2020, the Trust received notification that Mrs G’s IHER application was accepted, and a Tier 2 benefit was payable. There was an availability issue in regard to the Trust employees required for a capability hearing. Consequently, this hearing was not scheduled until 13 November 2020. Form AW8 was requested, but it was understood that Mrs G did not want to complete the form until she received an estimate of her IHER benefits.

Mrs G did not attend the capability hearing; however, her Union Representative attended in her place. Mrs G’s last date of employment was set as 4 February 2021 to take into account her contractual three-month notice period. The Trust was informed that Mrs G did not want to receive payment in lieu of her notice period as she wanted to receive a regular income until she received her IHER award.

In March 2021, the Trust contacted NHS BSA and queried if amending Mrs G’s leaving date to the date of the capability hearing would help in paying her IHER award. NHS BSA informed the Trust that this was not possible under the 2015 Regulations, and if her leaving date was amended, it would constitute fraud. It accepted that there was a delay in arranging the capability hearing and for this the Trust apologised. However, an amendment to Mrs G’s leaving date was proposed to NHS BSA, but an amendment was not possible.

NHS BSA’s response to my Preliminary Decision

During NHS BSA’s investigation under stage one of the Scheme’s IDRP, it listened to the recording of the Call, and noted the following in its response to Miss G:

“I have noted you contacted our Customer Contact Centre on 20 January 2021 to ask if the AW341 was on your mother’s record and to clarify that if she was to pass away before the award was completed would this be processed as an ill health award. I have listened to the call and can confirm the call handler agreed the AW341 had been received but was not showing on the record due to scanning delays. After seeking advice from our Service Desk, they also advised you that if your mother was to pass away before the application was processed, it would be completed as a posthumous award if the AW8 and the AW341 was on record. You raised the question of the payable date being correct which included the paid leave your mother was entitled to. The call handler correctly agreed that the retirement benefits would be paid the day after her last day of employment. Unfortunately, the call handler did not explain that whether the case is reverted to ‘death in service’ does depend on the retirement date (payable) date noted on the AW8. I am

10 CAS-82342-D5V2 sorry this was not referred to a member of staff with more expertise on this subject, and I agree the call handler did misinform you.”

So, there was no dispute that Miss G had been misinformed during the Call of 20 January 2021. However, the representative did correctly explain that any retirement benefits could only be paid the day after Mrs G left NHS employment.

NHS BSA had a duty to act in accordance with the relevant 2015 Regulations and that any benefits that are paid are what the member is entitled to. The Trust had already confirmed that Mrs G had untaken annual leave that she chose not to take payment in lieu of notice, and she was aware that her last date of employment was 4 February 2021. If NHS BSA allowed an amendment to Mrs G’s last date of service, it would change entitlement under the Scheme.

NHS BSA accepted that maladministration had occurred for which it and the Trust were responsible for, so it agreed that £1,000 in recognition of distress and inconvenience was appropriate. However, it believed that paying an additional £32,118.73, including interest, to the Estate was excessive.

Conclusions

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There is some tension in the provisions that the member must be an active member, i.e. in NHS employment, and must have ceased to be in NHS employment. In context and to give practical effect to the provision, the Regulation may be construed as requiring that the member be in NHS employment and in pensionable service to qualify for the pension but that they must actually leave such employment to actually receive or be entitled to immediate payment of the pension.

For the purpose of Regulation 109, the requirement for the IHER pension to be payable to the member under Regulation 109(1) but without it having become payable under 109(3)(b) must be interpreted as requiring the member to have met all conditions for an IHER pension other than claiming it and without it having come into payment. This includes the requirement that they be in pensionable service at least at the time of their application and that their employment must cease and must terminate on grounds of incapacity before the SIH lump sum actually becomes payable, since that applies to the IHER pension (under Regulation 90(d)). In effect, as for the IHER pension, the SIH lump sum is payable immediately after employment ceases and their employment must continue until the SIH lump sum becomes payable. The date agreed for payment of the SIH lump sum must be the date of retirement and vice versa.

Maladministration and failures of NHS BSA and the Trust

In Mrs G’s case, by 31 July 2020, the Trust had recorded that Mrs G had been told she only had a few months to live. By 1 September 2020, Mrs G had been seen by the Trust’s occupational health adviser and NHS BSA had informed her that she was eligible to receive a Tier 2 IHER award. Whatever communication there was between the Trust, the occupational health adviser and NHS BSA, both the Trust and NHS BSA either knew or should have known that she was qualified for a Tier 2 IHER pension and that she had only a few months to live and therefore also potentially qualified for a SIH lump sum in the alternative.

I find that by 1 September 2020 at the latest, both the Trust and NHS BSA had sufficient knowledge of her case and the circumstances to know that they needed to undertake the necessary administrative tasks required of them to provide her with her options, ensuring she was able to make timely and informed choices, and to then pay the benefit she elected to receive “as soon as is reasonably practicable” (in accordance with Regulation 109). If NHS BSA needed to obtain pensionable service and salary data or any other data or forms from the Trust in order to be able to calculate her IHER pension and SIH lump sum options, NHS BSA was under a duty to Mrs G as scheme administrator to request and obtain such information and do so promptly. I find that the requirement in Regulation 109 for the benefit to be paid “as soon as reasonably practicable” is intended to benefit members to whom an SIH lump

14 CAS-82342-D5V2 sum may be payable and imposes a duty of care on NHS BSA to do all things necessary to ensure the lump sum is paid promptly in order to protect such members from the risk of not receiving the benefit before they die or their condition worsens.

Likewise, the Trust knew that, to fulfil its role in the administration of Mrs G’s benefits, it needed to provide such information. It was under a duty to Mrs G to do so promptly and with due skill and care since Mrs G inevitably relied on it to do so: the purpose of its obligations to provide necessary information to NHS BSA was to benefit Mrs G by ensuring her benefits could be calculated. The Trust knew Mrs G was relying on it to provide such information to NHS BSA and reasonably so, as no other party could provide the employer information required by NHS BSA from the Trust for the calculation of her benefits and to allow her to receive her SIH lump sum1. There were various forms that required completion.

Neither the Trust nor NHS BSA did what was required of them with the timeliness that would be expected given the urgency of payment of an SIH lump sum. Mrs G contacted NHS BSA on 26 October 2020 to ask when she would receive her IHER benefits. NHS BSA said it could not provide her IHER figures until it received information, specifically form AW8, from the Trust (see paragraph 12 above). It is not clear that NHS BSA had made significant efforts to obtain such information even though it was eight weeks since it had been notified that she was eligible for an IHER pension and had a short life expectancy. The Trust did not send the necessary pensionable service and salary information or form AW8 to NHS BSA until 28 November 2020, three months after the Trust’s occupational health adviser had completed their assessment and nearly four months after it completed the employer section of her IHER application and was put on notice that she had only a few months to live. This was maladministration and a breach of the Trust and NHS BSA’s respective duties to Mrs G.

A month after being contacted by Mrs G to chase her IHER benefits, on 30 November 2020, NHS BSA provided the Trust with a calculation of the IHER benefits including the SIH lump sum available to Mrs G. These were not provided to Mrs G until 17 December 2020. Mrs G sent her completed form AW8 to NHS BSA on 24 December 2020 requesting the SIH lump sum. It appears that the date for payment of the SIH lump sum was not confirmed at this point as Miss G and Mrs G had a number of calls in January 2021 about this. It also transpired that NHS BSA still needed form AW341 to be completed by Mrs G’s doctors to confirm her life expectancy was under 12 months, notwithstanding that this had been communicated to the Trust in July 2020.

It is not for me to direct NHS BSA and the Trust as to how to carry out their duties in administering the Scheme and their arrangements for providing members with their benefit options, but the system of administration adopted must be fit for purpose and designed to enable members who may have only a few months to live to access such benefits as soon as possible. It appears that the system of administration adopted

1 See Golden Belt v BNP Paribas Plc [2017] EWHC 3182 for consideration of the duty of care to a third party

for pure economic loss in respect of provision of service or information. 15 CAS-82342-D5V2 was either not fit for purpose or was not properly applied. It should not take five months from the time the Trust becomes aware that its employee has only months to live or four months from the time NHS BSA receives an IHER application for a member in palliative care to be provided with her options as a preamble to payment of an SIH lump sum. This is in itself maladministration.

Mrs G should also have been provided with clear information about the link between the date on which her IHER benefits would be paid, including the SIH lump sum if selected, and her agreed retirement date. She should have been told that her IHER benefits would be paid if and when she terminated her employment. I find this information was not provided or was not made clear either by the Trust or NHS BSA. NHS BSA was contacted by Mrs G on 26 October 2020 enquiring when she would receive her benefits. During this call NHS BSA should have explained the process of paying any IHER benefits or a SIH lump sum, what needed to be done, and explained the link to the continuation and termination of her employment. This is not advice. It is essential factual information about their process and the terms and conditions of the benefits. It is information that NHS BSA had and that Mrs G could not easily obtain from any other source.

The Trust held a capacity hearing (the purpose of which may be obscure given that its occupational health adviser had already confirmed in August 2020 that she was unable to work and that the prognosis was poor) which was not attended by Mrs G but at which her last date of employment was discussed. It is not clear that the union representative who went in her place had instructions from Mrs G to agree the last date of employment or that any such instructions had been given on a clear understanding that such date would be the date of payment of her IHER pension or SIH lump sum.

Indeed, as Mrs G and Miss G were chasing the payment of her SIH lump sum in January 2021, and as on 18 December 2020 NHS BSA told her that her last day of employment was 4 February 2021, which she was happy with even though she was asking for the SIH lump sum to be paid sooner, I find that the link between the last date of employment and the date of payment of the SIH lump sum had not been explained either by the Trust, the union representative or NHS BSA.

I also find she was not told that her last day of employment was 4 February 2021 until 18 December 2020 and that it was not then explained that this was the earliest date on which the SIH lump sum could be paid and that she would lose the benefit if she did not live till 4 February 2021. I find that, had she been given the correct information on this, she would not have been happy with that employment end date and would have contacted the Trust to change it.

I accept that Mrs G had wanted her employment to continue so that she would have the security of a guaranteed income until she received the SIH lump sum, but that simply required the Trust and Mrs G to agree that the date of her retirement would be the date all other conditions for the SIH lump sum were met, as was required by the legislation. Regulation 109 and 90 effectively require the SIH lump sum to be payable 16 CAS-82342-D5V2 immediately after her employment terminates. It does not appear that it was explained or that she understood it or indeed that she understood that she would also receive the pay in lieu of notice.

Indeed, as has been accepted by NHS BSA, Mrs G was given incorrect information on the Call on 20 January 2021 when she was told that if she died before her employment end date the SIH lump sum would still be payable. The need to terminate employment to receive the SIH lump sum not only was not explained but she was encouraged by NHS BSA to accept an employment end date that prevented her becoming entitled to the SIH lump sum that she was desperately asking for. The Trust and her union representative appear to have agreed an employment end date on her behalf that would at least delay payment of her SIH lump sum and potentially prevent her receiving it.

This was maladministration and a breach of NHS BSA and the Trust’s respective duties to her and, if and insofar as her employment did not terminate before her death, is the principal cause of her employment having not terminated before her death and her dying without receiving or being entitled to payment of the SIH lump sum. I find that had NHS BSA not misinformed Mrs G on the Call, and had NHS BSA and the Trust not generally misinformed her by failing to make clear that her employment date needed to terminate when the other conditions for her SIH lump sum were satisfied and that it could then only be paid on the day her employment terminated, Mrs G would have agreed an earlier termination date to coincide with the other conditions for the SIH lump sum being met. That would have been no later than 20 January 2021, when it was confirmed on form AW341 that she had less than 12 months to live (so far as that was not evident or confirmed at an earlier date). While it is not disputed that NHS BSA gave incorrect information on the Call directly about the need for her to terminate her employment to receive the benefit before her death, other information provided by the Trust and NHS BSA was also misleading in not clarifying this.

As such, if for some reason the SIH lump sum were not payable (see below), I would find that NHS BSA and the Trust were jointly and severally liable to pay Mrs G compensation for her financial loss caused by the breach of their respective duties to Mrs G in respect of the administration of her IHER benefits and the SIH lump sum. The financial loss payable is the amount of the SIH lump sum that would have been payable on 21 January 2021 if her employment had terminated on 20 January 2021 net of the amount of any DIS lump sum already paid, together with interest at Bank of England base rate from 21 January 2021 to the date of payment adjusted in respect of any difference in the taxable amount. Given NHS BSA’s response to my preliminary decision, I should emphasise that such compensation for financial loss is not an award for distress and inconvenience for mere maladministration. It is compensation for the financial loss (the loss of the SIH lump sum if had been lost) caused by NHS BSA breaching its duty to Mrs G to carry out the administration of the Scheme, including SIH lump sums, efficiently and with due skill and care. NHS BSA’s duty includes having a system of administration that is fit for purpose and enables

17 CAS-82342-D5V2 members with limited life expectancy to access an SIH lump sum promptly and without unnecessary hurdles or delays. NHS BSA also has a duty to provide sufficient factual information about the conditions for benefits and their own administrative processes, to enable members to access such benefits and exercise their options.

Termination of employment

Forms are useful in the administration of a scheme, but they should not obscure the facts or undermine administration of the benefits. NHS BSA has correctly stated in its IDRP response on 7 July 2021 (see paragraph 34) that the matter of termination of employment is between the employer and employee. I find NHS BSA was wrong when it stated that the Trust needed to complete form AW171 to amend Mrs G’s employment end date and when it suggested that the Trust could not amend Mrs G’s leaving date without a written statement or a doctor’s note. This was not correct.

As referred to above, it appears that an employment end date of 4 February 2021 was agreed by the Trust and her union representative on behalf of Mrs G and without her knowledge or informed consent. This was apparently set to provide that she would have an income rather than a payment in lieu of notice until the payment of her IHER (see paragraph 50). The employment end date set by the Trust was communicated to her by NHS BSA on 18 December 2020 but without explaining that this meant she could not receive her SIH lump sum until then and indeed she was incorrectly told on the Call on 20 January 2021 that she would receive it even if she died before 4 February 2021 and the end of her employment.

However, despite the considerable misinformation, on 20 January 2021, Mrs G and Miss G telephoned the Trust to bring Mrs G’s employment end date forward to 20 January 2021 (being also the date of form AW341 completed by one of Mrs G’s doctors confirming her life expectancy of less than 12 months, which so far as NHS BSA was not already satisfied of that on the basis of all the other evidence already submitted to it, completed all requirements for payment of the SIH lump sum). It appears that the Trust accepted the end date of 20 January 2021, as the Trust then called NHS BSA on 22 January 2021 to request the change of employment end date.

It is at this point that NHS BSA wrongly advised that a form AW171 or doctor’s note were required. This was wrong. There is no formality required for an employee to terminate her employment. As Mrs G was on the call to the Trust on 20 January 2021, the issue of Miss G’s authority under the LPA or otherwise is also not relevant. There is in any event no objection to Mrs G communicating via her daughter. It is a factual matter whether the request or notification of a change of employment end date was made by Mrs G, and I find that it was.

I find that Mrs G gave notice to the Trust terminating her employment with immediate effect on 20 January 2021 on the telephone call she and Miss G had with the Trust on 20 January 2021. I also find that no other formalities were required for the termination of her employment. The termination of her employment and provision of

18 CAS-82342-D5V2 form AW341, so far as needed, completed all conditions for the payment of her SIH lump sum which became payable on 21 January 2021.

I find that the SIH lump sum was payable on 21 January 2021 and must now be paid to the Estate, net of the amount of any DIS lump sum already paid, together with interest at Bank of England base rate from 21 January 2021 to the date of payment.

In its response to my preliminary decisions, and with regards to the request to amend Mrs G’s employment end date, NHS BSA states that (a) it has a duty to ensure that the Regulations are adhered to and that benefits are paid which a member is legally entitled to receive; (b) the Trust had already confirmed that she had outstanding annual leave which she had chosen not to exchange for a payment in lieu of notice and that her last day of pensionable employment would be 4 February 2021. And that in the circumstances, for NHS BSA to allow an amendment to the last day of her employment at that stage would have changed Mrs G’s legal entitlement under the Scheme. This is a misunderstanding of the Regulations. Mrs G was entitled to terminate her employment at any time, whether or not that might be in breach of any notice conditions. The benefits essentially follow the employment relationship. A change to the employment relationship may give rise to a change in the pension benefits legally payable under the Scheme. Nothing in the Regulations or employment law prevented Mrs G bringing forward her last day of employment to 20 January, notwithstanding that the Trust and her union representative had previously agreed that it should be 4 February and that this date had been notified to NHS BSA. The consequence of her terminating her employment was that the SIH lump sum, for which all other conditions had been met, became payable under the Regulations. It then needed to be calculated based on her actual completed pensionable service and recognition of any notional periods of service provided for in the Regulations.

Regulation 20 - pensionable service in respect of unused annual leave

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I uphold Miss G’s complaint on behalf of the Estate.

Directions

Camilla Barry Deputy Pensions Ombudsman

18 February 2026

21 CAS-82342-D5V2 Appendix Relevant extracts of the NHS Pension Scheme Regulations 2015

20 – Pensionable service

“(3) Paragraph (4) applies if—

(a) the employment in which M is an active member ceases; and

(b) a payment is made in respect of untaken leave.

(4) If this paragraph applies—

(a) M's pensionable service is treated as continuing for a period equal to the period of leave in respect of which payment is made; and

(b) the payment is treated as M's pensionable earnings for the period.”

90 - Entitlement to ill-health pension

“(1) An active member (M) is entitled to immediate payment of—

(a) an ill-health pension at Tier 1 (a Tier 1 IHP) if the Tier 1 conditions are satisfied in relation to M;

(b) an ill-health pension at Tier 2 (a Tier 2 IHP) if the Tier 2 conditions are satisfied in relation to M.

(2) The Tier 1 conditions are that—

(a) M is qualified for retirement benefits and has not attained normal pension age;

(b) M has ceased to be employed in NHS employment;

(c) the scheme manager is satisfied that M suffers from a physical or mental infirmity as a result of which M is permanently incapable of efficiently discharging the duties of M's employment;

(d) M's employment is terminated because of the physical or mental infirmity; and

(e) M ...claims payment of the pension.

(3) The Tier 2 conditions are that—

(a) the Tier 1 conditions are satisfied in relation to M; and

(b) the scheme manager is also satisfied that M suffers from a physical or mental infirmity as a result of which M is permanently incapable of engaging in regular employment of like duration.”

22 CAS-82342-D5V2 109 - Option for members in serious ill health to exchange pension for lump sum

“(1) An active member […] may opt to exchange a relevant pension for a lump sum if the scheme manager is satisfied that the conditions for the lump sum to be a serious ill-health lump sum for the purposes of the 2004 Act will be met (see paragraph 4 of Schedule 29 to that Act).

(2) For the purposes of paragraph (1), a “relevant pension” is a pension payable to that member under regulation 73, 76, 90 or 94.

(3) The option may only be exercised—

(a)[…];

(b) in the case of a pension payable under regulation 90 […], before the pension becomes payable to the member.

(4) […]

(5) An active member entitled to a pension under regulation 90 who exercises the option is to be paid, as soon as is reasonably practicable, an amount equal to the sum of—

(a) the maximum lump sum to which the member could have become entitled on exercising the option under regulation 77 at the appropriate time; and

(b) the annual rate of the pension to which the member is entitled under regulation 90 after exercising that option, multiplied by 5.

(6) […].

(8) “The appropriate time” means—

(a) […]

(b) for the purposes of paragraphs (5) and (7), the time payment of the pension under regulation 90 […] would otherwise first be due.

(9) References to the annual rate of a pension are to the amount of the annual pension to which the member would be entitled, together with any increases payable under the Pensions (Increase) Act 1971, calculated as at the appropriate time.

(10) The option under this regulation may only be exercised by notice in writing to the scheme manager in such form as the scheme manager requires.”

23 CAS-82342-D5V2

Lump sum on death

“112 - A lump sum is payable in accordance with Schedule 14 in respect of the death of -

(a) an active member;”

Schedule 14 – Lump sum on death

Death of active member

“2. - (1) Except where paragraph 6 or 7 applies, a lump sum on death is payable under this paragraph in respect of the death of an active member before the member reaches the age of 75.

(2) The amount of the lump sum on death payable is equal to the higher of—

(a) twice the member's relevant earnings; or

(b) twice the member's re-valued pensionable earnings for the scheme year falling in the earnings reference period which has the largest re- valued pensionable earnings.

(3) Re-valued pensionable earnings must be construed in accordance with paragraph 7(3).”

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