Mercedes Benz Uk Pension Scheme · CAS-29562-B7J7

CAS-29562-B7J7

Ombudsman’s Determination Applicant Mr L

Scheme Mercedes-Benz UK Pension Scheme (the Scheme)

Respondents Daimler UK Trustees Limited (the Trustee)

Willis Towers Watson (the Administrator)

Outcome

Complaint summary Mr L complained that his pension is considerably lower than he was told it would be due to a calculation error made by the Scheme’s previous administrator.

Background information, including submissions from the parties

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Mr L wrote to the Scheme to complain about the incorrect calculation. He said:-

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Adjudicator’s Opinion

3 CAS-29562-B7J7 Mr L did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider.

Mr L provided his further comments which do not change the outcome. Mr L said:-

• He did not query the increase between 2011 and 2015 because the growth between 1993 and 2015 seemed feasible and encouraging.

• It was reasonable for him and his financial advisor to rely on the pension quotations as the basis for retirement planning.

• He began winding down his business from 2015 based on the incorrect quotations. If he had concerns about his pension, he would have maintained the pre-2015 level of business.

• His long-term financial security had been “vastly and permanently undermined through no fault of [his].”

• His health has deteriorated as a result of the error.

• The offer of £1,000 seemed to trivialise his case and could not be seen as fair and proportionate for the error.

I agree with the Adjudicator’s Opinion and I will therefore only respond to the points made by Mr L for completeness.

Ombudsman’s decision As explained in the Adjudicator’s Opinion, the basic principle for negligent misstatement is that a scheme is not bound to follow incorrect information.

In this case, the incorrect information was the retirement quotations sent to Mr L in June 2011 and August 2015. Mr L is only entitled to receive the benefits provided for under the Scheme Rules, that is, benefits based on correct information accurately reflecting the Scheme Rules.

I will only provide redress if it can be shown that that financial loss or non-financial injustice has flowed from the incorrect information provided. I am not persuaded in this case that Mr L has suffered a financial loss.

The Trustee has agreed that “at some point” between June 2011 and 2012, the Scheme’s previous administrator provided incorrect data to the current administrator (the data transfer), Based on this information, the current Administrator issued Mr L with incorrect quotations that led him to believe that he was entitled to a much higher pension than was actually the case. Mr L has said that he had made plans, in expectation of receiving the higher amount, and suffered a financial loss of “£120,000+” as a result of the incorrect quotations.

4 CAS-29562-B7J7 To support his claim that he relied on the incorrect figures when making financial decisions, Mr L provided approximate figures of his business income from 2012 to 2019. Mr L’s business income decreased by approximately £10,000 between 2012 and 2015. He maintained the same level of income between 2015 and 2018. It increased by £3,500 between 2018 and 2019 following Mr L’s attempt to “pick up more business.”

The figures between 2012 and 2015 suggest that Mr L had begun winding down his business before he requested the 2015 quotation. Furthermore, Mr L’s requests for retirement quotations were all based on his NRD. This suggests that Mr L planned to retire when he reached age 65 regardless.

There is no doubt that Mr L has suffered a loss of expectation, as a result of the incorrect information provided to him on the value of his pension, and that the error has caused him non-financial injustice.

Mr L and his financial advisor needed a figure on which to base his retirement planning. It was reasonable to expect the retirement quotations to provide an accurate reflection of what Mr L might receive when he reached age 65. However, the quotations explained that the values were an estimate of what Mr L might receive and that the figures were not guaranteed. In my view, it was clear that the figures could not be relied on. Taking this into consideration it would have been reasonable for Mr L to seek clarity over the significant increase between the 2011 and 2015 statements.

I understand that Mr L is disappointed that he is entitled to less than he expected and I sympathise with the position in which he finds himself. The Trustee has agreed to make Mr L a payment of £1,000 in recognition of the serious distress and inconvenience he has suffered which I find is reasonable and in line with my guidelines.

Therefore, I partly uphold Mr L’s complaint.

Directions

Anthony Arter

Pensions Ombudsman 16 March 2020

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