Oral hearing, time limits and variation of benefits 2

Reference: J00508

The member is currently a pensioner in the Scheme. In 1981 the member was offered employment with the employer. His offer letter said that his pension would be 46 per cent of final pensionable salary plus an annual sum equal to 1 per cent of total profit commission earned during employment. In 1982 the member received a letter informing him that his pension would be something different.

The member claimed pension as set out in the original letter. The employer argued the member should have challenged the position in subsequent correspondence after 1982 and also that the member’s claims were time barred. The member requested an oral hearing.

In relation to whether the member was in time, the Ombudsman held that his complaint could be categorised as a dispute of law in respect of the member’s entitlements to benefits of retirement and on that basis time did not begin to run until benefits came into payment.

In relation to an oral hearing, the Ombudsman said he would be prepared to give one where there were: (a) differing accounts of a particular event and the credibility of statements needed to be tested; (b) allegations of dishonesty on the part of either party; and (c) disputed material and primary facts which could not otherwise be determined. None of these applied in this case.

In relation to the member’s benefits whilst "an agreement to vary by conduct will not be inferred lightly, the possibility of such an implied agreement is not completely precluded". Here the member was at a very senior level and able to understand all of the correspondence and the Ombudsman therefore found that there had been an effective variation of the original pension promise.

Comment
The case provides a useful summary of the circumstances in which the Ombudsman will agree to an oral hearing. It also illustrates the fact that members who go along with amendments to their benefits meaning to argue about them at a later date may find that they have become bound by the changes in the interim.