Universities Superannuation Scheme · CAS-45705-H0F4

CAS-45705-H0F4

Ombudsman’s Determination Applicant Mrs N

Scheme Universities Superannuation Scheme (the Scheme)

Respondent Universities Superannuation Scheme Ltd (the USS)

Complaint Summary

Summary of the Ombudsman’s Determination and reasons

• The USS failed its duty of care to Mrs N, to reinstate her into the Scheme since 2014.

• This situation has caused Mrs N serious distress and inconvenience for which she shall receive an award.

1 CAS-45705-H0F4 Detailed Determination Material facts

1 Preston and others v Wolverhampton Healthcare NHS Trust and others (No.2) [2001] HL 2 The reference number for this complaint is: PO-14751. 3 The reference number for this complaint is: PO-1576.

2 CAS-45705-H0F4 “…I understand that the fund transferred to USS under my name is not invested by USS in the usual way and no annual increments are added. As already discussed I believe the fund amount is incorrect. Under the circumstances I would be grateful if you could return the fund to TPS as soon as possible until the ombudsman has deliberated upon my complaint. Please can you let me know when this has been completed…”

“…Mrs [N] has confirmed that she wishes for the transfer value to be returned to [the TPS] whilst she pursues her ongoing complaint with [TPO]…”

“Mrs N’s additional benefits, as a result of her Preston claim, could not have been transferred within two years of her joining the USS in 2003. The reason for this is because the ET’s judgment on her Preston claim was not issued until May 2007. It then required a calculation of her additional benefits and the contribution to be paid by both Sparsholt and Mrs N before the transfer could proceed.

TP did not require Mrs N’s agreement in respect of the 2011 transfer because the pension that was being transferred was in respect of her Preston claim and her retrospective part-time service. As stated above, this pension had to follow the benefits that were transferred to the USS in 2003 and therefore there was no need for her to agree before the transfer was made in 2011.”

“In an effort to avoid returning Mrs [N’s] monies to her, and the probability of a further complaint with [TPO] against the USS, [TP] is prepared, exceptionally, to add interest to the payment incorrectly returned to the scheme on 9 June

4 Relevant sections of the Memorandum are in Appendix 1.

3 CAS-45705-H0F4 2014. The USS had held the monies since 15 December 2011 when the return was made, without interest. We would therefore be prepared to pay interest at Base Rate from 9 June 2014 to the date payment is made. In this way, USS will be in exactly the same position it would have been in, had it processed the ‘follow-on’ transfer value upon receipt in December 2011. Mrs [N] could then be paid her additional benefits from the USS.”

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Summary of Mrs N’s position

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Summary of the USS’ position

5 This Rule is set out in the Appendix 2.

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6 https://www.pensions-ombudsman.org.uk/decision/2010/761491/allianz-retirement-

death-benefits-fund-fundteachers-pension-scheme-761491 7 This Rule is detailed in Appendix 3.

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Conclusions

“Benefits payable to or in respect of any former member who does not have any service on or after 1 April 2016 shall be governed by the previous rules in

8 It noted that TP had previously informed Mrs N that it could not pay the CETV to a DC

(money purchase) pension arrangement.

9 CAS-45705-H0F4 force (or treated as having been in force) at the date when the former member last left service (as then defined for the purposes of the scheme).” (Original emphasis).

9 Relevant sections of the 2003 Rules are in Appendix 4.

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Directions

Within 28 days of the date of this Determination, the USS shall:-

Anthony Arter CBE

Deputy Pensions Ombudsman

28 February 2023

11 CAS-45705-H0F4 Appendix 1

“7.21 ‘Preston’ cases. In cases where a previously deferred member of a Club scheme has been granted additional service credit following a successful “Preston” claim and applies for a transfer of those benefits to another Club scheme, the sending scheme should calculate the additional transfer value using current factors, relevant date and age and allowing for pension increase. Given the background to these cases, it may not be possible for the members to comply with the time limits set out in paragraph 4.1 but it is hoped that receiving Club schemes would take a sympathetic approach to such cases.”

12 CAS-45705-H0F4 Appendix 2

“47.1 The trustee company may at the written request of a member accept a transfer payment into the fund in respect of rights of that individual under a transfer arrangement.

47.2 Subject to sub-rules 47.3 to 47.5 any such transfer payment which is accepted into the fund on or after the effective date shall be credited to the member’s DC account on such terms as the trustee company may decide…”

13 CAS-45705-H0F4 Appendix 3

“44. INDIVIDUAL TRANSFERS IN

…

44.5 The trustee company may on actuarial advice:

…

44.5.4 enter into any special arrangements with schemes participating in the transfer club where the balance of advantage would not be equitable between this scheme and any other such schemes…”

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“5.3 Club transfers

For the purpose of facilitating transfers between schemes participating in the transfer club the trustee company shall have the following powers, to be exercised, where appropriate, after taking actuarial advice:-

…

(d) power to enter into any special arrangements with schemes participating in the transfer club where the balance of advantage would not be equitable between this scheme and any other of such schemes…”

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