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Yell Pension trustees found guilty of maladministration

The trustees of the Yell Pensions Plan have been found guilty of maladministration for failing to give proper explanation of the grounds on which they concluded a member had left service.

In the case Mr P J Anderson v The Trustees of the Yell Pension Plan, Deputy Pensions Ombudsman Charlie Gordon concluded that the trustees did not go far enough in determining the grounds on which the member, Mr P J Anderson, left service before denying him an unreduced pension.

Gordon states: “The trustees have concluded that Mr Anderson was dismissed on “other” grounds which fell outside those covered by the rules (for eligibility of an unreduced pension).

“I do not think that they went far enough in this respect. They must do more to spell out what those “other” grounds are if they are to refuse Mr Anderson his unreduced pension.

“In short they have failed to give proper reasons for their decision and this amounts to maladministration.”

Gordon has instructed the trustees to reconsider the circumstances underlying the termination of employment and, if they maintain their decision to deny Anderson an unreduced pension, to explain fully their conclusions within 56 days.

Sacker & Partners associate Arshad Khan says: “One of the key points that arises from this case is the blurring of the line between the responsibilities of the company and the trustees under the plan rules.

“This decision leaves open to question the length and extent to which trustees should go in order to examine more critically determinations made by an employer in all circumstances where the pension scheme rules expressly provide that the employer has the power to make a decision or exercise its discretion.

“This may result in greater conflict between the employer and trustees as to why a particular decision has been made by the employer.”

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