Macaulay v Pensions Ombudsman 2

Reference: (1998) OPLR 107

The appellant complained to the Ombudsman in relation to a pension benefit which he claimed he was owed under the Federated Land and Building Company Limited Pension and Life Assurance Scheme. The appellant was a member of that scheme. The principal employer had taken out a number of life policies for the benefit of the appellant. The facts in relation to these life policies were far from clear. In particular, there was significant debate as to whether the proceeds of those policies were assets of the pension scheme. In order to resolve these problems, the insurer agreed to use the proceeds of four of the policies to purchase an annuity for the appellant. The proceeds of the fifth policy were to be paid to the trustees to provide the appellant with an enhanced pension and a tax free lump sum. The trustees indicated their agreement to these arrangements and they were partially implemented on behalf of the trustees. However, the appellant never accepted the proposals and failed to return the application form to obtain the proposed annuity.

The appellant claimed that he was entitled to a pension under the scheme up to Inland Revenue limits. The Ombudsman rejected this claim holding that the assignment of the policy to the pension scheme resulted in that policy falling within the general assets of the scheme. Unless the trustees specifically decided to allocate those assets to enhance the appellant's personal benefits he was entitled to no more than a normal deferred pension.

Ferris J rejected the appeal. He held that it was a question of fact as to whether the trustees had exercised their power of augmentation specifically in relation to the appellant. Unless they are shown to have done so, the appellant was not entitled to any specially augmented benefits under the Federated Scheme. The question as to whether the trustees had exercised such a power was a question of fact. Given that the Ombudsman had determined that no such decision had been taken, the court was not in a position to overturn this finding. The only way that the appellant could persuade the court to overturn the Ombudsman's determination would be to show that the evidence before the Ombudsman was wholly insufficient to reach that conclusion. This was not such a case.