Local Government Pension Scheme Lgps Lancashire County Pension Fund · CAS-75556-D0T8

CAS-75556-D0T8

Ombudsman’s Determination Applicant Mr R

Scheme Local Government Pension Scheme (LGPS) - Lancashire County Pension Fund (the Fund)

Respondent Local Pensions Partnership Administration Ltd (LPPA)

Outcome

Complaint summary

• LPPA made mistakes when calculating the benefits available to him from: (a) his additional pension contributions (APCs), and (b) the transfer of pension rights from his two former pension schemes into the LGPS.

• It provided him with an incorrect annual benefit statement showing overstated pension figures calculated as at 31 March 2019.

• LPPA failed to respond to his enquiries about his benefits and subsequent complaint under the LGPS Internal Dispute Resolution Procedure (IDRP) in a timely manner.

Background information, including submissions from the parties

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1 This is a money purchase pension scheme.

2 This was a LGPS “inter-fund transfer”.

3 This was shown on a member print enclosed with LPPA’s letter dated 10 October 2019 to Mr R.

4 This figure was shown on a member print enclosed with LPPA’s letter dated 10 October 2019 to Mr R. 2 CAS-75556-D0T8

• The total pension of £4,409.13 per annum shown in section C of the benefit statement was incorrect. It should have been the same as the figure shown in section B for the total pension of £2,811.32 per annum.

• This mistake was caused by “a system problem”.

• It enclosed a revised benefit statement showing a total pension of £2,811.32 per annum in section C and also saved a copy on his online account.

3 CAS-75556-D0T8 • Its system provider was aware of the problem and should have fixed it before next year’s statements were produced.

• It had carried out a thorough investigation of his member record so that it could provide an accurate and full response to his complaint.

• It partially upheld his complaint and would like to sincerely apologise for: (a) any distress and inconvenience caused by the substandard service it had provided him, (b) the tardiness of its response, and (c) its failure to previously answer his questions satisfactorily.

• Annual benefit statements were based on the figures as at 31 March and did not allow for pension increases due from the “new financial year”. For example, his statement as at 31 March 2019 did not include details of “the pension increases due to be applied in 2019/20”.

• The total pension available to him from the LGPS as at 31 March 2019 of £4,409.13 per annum shown on the original annual benefit statement was wrong.

• Following his enquiries, it had sent him a revised statement on 3 December 2019.

• The mistake was caused by a system error in which his transferred in benefits were not applied correctly. This resulted in an overstatement of his total pension figure.

• The pension figures shown on his online account did not always match those on his annual benefit statement because they were revalued and updated each month following his employer’s monthly submission of payroll data. His online account should always provide him with “the most up to date information”.

• The additional pension available to Mr R from the inter-fund LGPS transfer including the pension increase of 2.4% at the end of March 2019 was £1,636.16 per annum, that is,1,597.81 x 1.024 = £1,636.16.

• It enclosed a copy of his “CARE Benefit History” so that he could check the figures shown on it and contact LPPA if he had any concerns.

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“CARE pension transferred in from GMPF £1,636.165

CARE pension built up in the Fund (including £3,010.32

Atlas transfer and APC contracts)

Total current value of pension £4,646.48”

• It had comprehensively reviewed Mr R’s record. It was satisfied that the information held in it was accurate and provided a true reflection of his benefits in the LGPS.

• It had let him down as a customer and understood his concerns. It would like to sincerely apologise to him for the poor service it had provided.

5 The pension increase due at the end of March 2020 has not been included in this figure.

6 Mr R noticed that this figure was around £50 less than what LPPA had said it would be in its letter dated 23 March 2020. Mr R brought this to LPPA’s attention at Stage Two IDRP. 5 CAS-75556-D0T8 • It would keep his record under review and make sure that the information shown on future annual benefit statements was correct before issuing them to him.

• It would also review its processes to improve its service and to ensure no other members have been similarly affected.

• confirmed that the information shown in Mr R’s member record was correct; and

• provided full details of how the figures shown on the benefit statement as at 31 March 2019 and 31 March 2020 were calculated.

6 CAS-75556-D0T8 “I appreciate that your loss of confidence in the administration of your pension is as a direct result of our administrative errors, and for this I offer my sincere apologies. I hope that my explanations…and the corrected documentation enclosed, provide you with the reassurance that you need.”

It is unacceptable for LPPA: (a) to provide conflicting and inaccurate information about the benefits available to him from the LGPS in his annual benefit statements and online account, and (b) to discover its mistakes only after he had brought them to its attention.

He is concerned about the “discrepancies and inaccuracies” in his member record and that the value of his benefits cannot be established precisely.

He no longer has any confidence that the information which LPPA provides him about his LGPS benefits is correct and so cannot plan effectively for his retirement.

He would like: (a) his member record independently checked to ensure that it is accurate, and (b) LPPA’s “errors and omissions” to be fully and robustly investigated so that they do not occur again.

LPPA failed to respond to his enquiries and subsequent complaint in a timely manner and within its own timescales.

He has experienced considerable distress and inconvenience dealing with this complaint. LPPA’s mistakes have affected both his health and his work. He has spent much time and effort trying to resolve these errors for which he should be compensated by LPPA.

“Whilst I accept that administrative errors have occurred, and have since been rectified, I do not accept that Mr R has suffered any financial disadvantage. The initial annual benefit statement overstated his pension benefit due to the errors noted above, however the online figure was more realistic. The provision of pension benefit quotations cannot be a guaranteed figure. Every time someone runs a quotation the results will differ as they are as at that point in time, and dependent on various assumptions and calculation factors.

Mr R has now left Preston City Council and is therefore a deferred member of the Scheme. I am satisfied that his benefits are recorded correctly and have been since 2020.”

7 CAS-75556-D0T8 Adjudicator’s Opinion

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Mr R did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider. Mr R provided his further comments which do not change the outcome.

Essentially, Mr R said that the distress and inconvenience which he suffered in this matter warranted at least a payment of £1,000 which I could award for serious non- financial injustice when applying the criteria shown in my factsheet entitled “Redress for Non-Financial injustice.”

I note the additional points raised by Mr R, but I agree with the Adjudicator’s Opinion.

Ombudsman’s decision The conditions shown in my factsheet entitled “Redress for Non-Financial Injustice” for the various categories of distress and inconvenience are for guidance purposes only. The facts of many complaints will often straddle the criteria between different categories of distress and inconvenience, such as is the case here between the “serious” category and the “significant” category.

My awards for non-financial injustice are modest and not intended to punish a respondent.

9 CAS-75556-D0T8 I consider the sincere apology that Mr R has received and the goodwill award of £500 offered by LPPA during the Adjudicator’s investigation to be sufficient.

I partly uphold Mr R’s complaint.

Directions

Dominic Harris

Pensions Ombudsman 31 July 2023

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