The Pensions Ombudsman has decided in favour of Old Mututal Wealth after a widow claimed the trustee of her deceased husband’s pension awarded death benefits wrongly.
On 3 July 2013, Mr Y, who was the named policyholder of the plan, passed away while he and Mrs Y were married.
Mrs Y applied for death benefits from the plan on 25 July 2013, attaching relevant evidence that included a settlement agreement between Mr Y and his ex-partner.
This confirmed: “Thereafter the trustee [Mr Y’s ex-partner] will be solely responsible for the financial maintenance of the minor children…the donor [Mr Y] voluntarily agrees to contribute towards his sons’ additional school expenses which include their uniform, school trips and books, while they remain in full time education or reach 18, whichever is the sooner. The exact sum to be agreed between the trustee and donor.”
Around this time Mr Y’s ex-partner, and mother to Mr Y’s two children, submitted a claim on the children’s behalf.
On 20 August 2013, the trustee wrote to Mrs Y to explain it had decided to pay benefits on the basis of one third to her and one third to each of Mr Y’s children.
Mrs Y wrote to the trustee to challenge the decision and argued it was at odds with the settlement agreement.
She explained her misunderstanding that her submission and claim for benefits would be sufficient for full benefits to be paid to her.
Mrs Y also argued that if she been invited to make further submissions to support her claim, she would have done so.
She also queried the accuracy of the information the trustee had been provided with by the other claimant.
The trustee acknowledged Mrs Y’s letter and confirmed the matter would be reconsidered subject to further information being provided which Mrs Y handed over.
On 11 September 2013, the trustee responded to Mrs Y, confirming that its decision had not changed and she raised a complaint.
The adjudicator sided with the trustee as the rules of the plan take precedence over the settlement agreement and these allowed a wider definition of dependency.
Under the plan rules the children were dependents until the age of 23 and so the trustee acted in accordance with the rules.
Mrs Y did not accept the adjudicator’s opinion and the complaint was passed on to ombudsman Anthony Arter.
He says: “Mrs Y may not accept the decision of the trustee, and may wish that it had explained its reasoning in more detail, but neither of those points are sufficient for me to uphold the complaint.
“The trustee did provide its rationale, even if that was not the logic Mrs Y would have chosen to apply to the same question.
“I am also satisfied that the trustee reviewed the relevant evidence in reaching its conclusion, and that the decision reached is a reasonable one in the circumstances.”