Advice to members 1

Reference: K00007

The member joined the Scheme in 1968. The Scheme provided two categories of benefits. Between 1968 and 1973 the member changed categories three times. In 1975 he requested information on the cost of purchasing added years and purchased 9 added years over a 10 year period. However, in 1998 he discovered that they had been credited in a category he was in from 1970 to 1973 rather that the one he was in in 1975. The member had been provided with a leaflet at the time which explained the added years would be based on age and salary in 1972.

The member complained and claimed that it was reasonable to assume that the added years would be credited to the category he was in at the time he paid them.

The Ombudsman held that although it was not completely clear that the 1972 category would be used as well as the 1972 pay, as the cost of the added years was based on the old category salary, the member ought perhaps to have recognised that there was a link between cost and benefit. At most the leaflet he was given was incomplete and he should have queried the position before he decided what to do. There is no general duty on employers to advise employees about pension scheme benefits, except perhaps where the employee needs information to make a decision which he could not reasonably obtain himself.

Comment
This determination supports the judgment in Outram v Academy Plastics [2000] 38 PBLR and further distinguishes the case of Scally v SHSS Board [1992] 1AC 294 which held that an employer could have an implied contractual duty to provide information in situations where the employee could not find the information himself.