1 PURPOSE OF THE REPORT
To report the Pensions ombudsman determination of a complaint from a former employee (teacher) about how pension estimates was dealt with by the former Education Department in 2000.
2 INFORMATION
2.1 A secondary school teacher submitted a complaint to the Pension Ombudsman, about a pension estimate he received from the Authority. His final pension from the Teachers Pension Agency differed from that provided by the Authority, as they had applied a rule which capped his pension due to a salary increase in his final year of teaching.
2.2 The teacher retired from his post on 31st December 2000.
2.3 The Teachers Pension Scheme (TPA) is administered by Capita. The Authority have no influence on how the TPA apply their rules and regulations.
2.4 Any estimates supplied by the Council are clearly marked as estimates and teachers are informed that the Teachers Pension Agency is responsible for the final pension calculation.
2.5 The Ombudsman’s determination was that the teacher was provided with an incorrect estimate of the benefits he would receive (should he choose to retire), and that was maladministration. The Council was informed about this determination in June 2006.
2.6 The Ombudsman directed the Authority to make a payment (of £52,543) to the Teachers Pension Scheme to cover the loss suffered and increase the (ex) employee’s pension from the date of his retirement. This sum has been met by the Council’s insurers.
2.7 The Council has already taken steps in the provision of estimates, to ensure the problem does not recur. Pension estimates provided now include the following statement:-
“The enclosed estimate of pension benefit is based on our records and interpretation of the Teachers Pension Scheme Regulations. However, this estimate is provided without legal liability as actual benefits are determined by the Teachers Pensions Agency (TPA) in its application of the Scheme Regulations and with reference to final service / pay records.
It is, therefore, strongly recommended that you contact the TPA for confirmation of your pension quote before making any decisions or taking any action in respect of which the amount of such benefit would be a consideration.
You can contact the TPA by e-mail at http://www.teacherspension.co.uk or by telephone on 0845 6066166. You may also refer to the TPA Pension Guide or their website for further information.
NOTE - Temporary Up-Grades: The pensionable pay used to calculate your retirement benefits may be restricted by the TPA if your salary is increased by more than 10% plus the standard increase, during your last 3 years of pensionable employment before retirement.”
2.8 We have also sought advice from the Pensions & Medical Fitness Team, Department for Education & Skills, Sanctuary Buildings, Great Smith Street, London SW1P 3BT – (which contracted Capita to provide this service) to indicate our intention to refer employees to Capita / TPA for final pension quotations, and seeking their advice as to any alternative / additional action they would also recommend in these circumstances. The advice that has been received confirm the importance of the statement in paragraph 2.7.
2.9 The Chief Personnel Officer has reviewed, with Finance, the current arrangements for providing (LGPS) pension estimates which already contain such qualifying wording and is satisfied the Council’s position is sound. He has also reviewed and updated the wording referred to in 2.6 above, which is used in the proforma documentation sent to employees, so there is no room for ambiguity.
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