Gkn Group Pension Scheme · CAS-77483-T9R9

CAS-77483-T9R9

Ombudsman’s Determination Applicant Mr H

Scheme GKN Group Pension Scheme (the Scheme)

Respondent The Trustee of the GKN Group Pension Scheme (the Trustee)

Outcome

Complaint summary

Background information, including submissions from the parties I have only set out the main points in relation to the complaint. I acknowledge that there were other exchanges of information between the parties.

Prior to his death, Mr T was an active member of the defined contribution (DC) section of the Scheme, which is an occupational pension scheme. Mr T also had other benefits in the Scheme that had been accrued on a defined benefit basis.

Following Mr T’s death, the following benefits were payable:

• a lump sum representing the value of Mr T’s DC ‘Individual Account’, which amounted to £26,221.92;

• a death in service lump sum benefit of £240,520.00; and

• five years’ worth of payments of the pension that would have been payable in respect of Mr T’s defined benefits, amounting to £29,394.15.

1 CAS-77483-T9R9 The Trustee exercised its discretion in deciding to award both the DC individual account and death in service lump sum (collectively the Death Benefits) to Ms Y. The third of the three benefits set out above was paid to the personal representative of Mr T’s estate. Mr H has complained about the decision for the award of the Death Benefits only.

The Trustee’s discretionary powers in relation to the decision are set out in the Scheme’s Deed and Rules, dated 14 September 2012, and a Deed of Amendment dated 30 June 2017 (the 2017 Deed). Relevant extracts from the 2017 Deed are quoted in the Appendix.

The salient points regarding the two parties’ positions, as set out prior to the issue of the Adjudicator’s Opinion, are detailed below.

Summary of Mr H’s position

Mr T and Ms Y lived separately, some distance apart. They did not meet that frequently and they had separate finances.

Although Ms Y and Mr T did continue to communicate, their relationship had ended prior to Mr T’s death. Ms Y did not attend the funeral and she did not have any involvement in the arrangements.

He spent considerable time caring for Mr T in the last years of Mr T’s life. He had to give up a full-time job in order to do this.

Prior to his death, Mr T had considered updating his death benefit nomination, but his expectation was that he was going to be made redundant by the Scheme’s employer. This is why Mr T had not updated the nomination he made in 2014.

As part of the decision, the Trustee appears to have considered information obtained from Mr T’s family and his line manager at his former employer.

He was ostracised from the family due to his ethnicity; his mother, Ms R, is of non- white ethnicity. Information obtained from Mr T’s family members was likely to be biased.

Any statement the Trustee obtained from Mr T’s brother should be discarded. This is because Mr T’s brother was employed by the same company as Mr T, and he has a close relationship with Mr T’s line manager and other employees. His statements could have influenced the Trustee. Shortly before his death, Mr T had asked his brother to make no further contact.

Mr T had been off work on a long-term basis, so any information provided by his line manager may not have been up to date. Further, Mr T did not have a positive relationship with his manager, due to a disciplinary matter for which Mr T had to involve his workplace union.

2 CAS-77483-T9R9 The law clearly states that when there is no Will or marriage, a deceased person’s estate will fall to the next of kin. It is not clear why this was not followed for the award of the Death Benefits.

Mr T did not make a Will because his intention was that he (Mr H) would inherit the estate, which was what happened under the rules of intestacy, meaning a Will was not necessary. The fact that he was the beneficiary of Mr T’s estate should not have had any bearing on the Trustee’s decision.

Summary of the Trustee’s position

It acknowledged that this was a challenging case. It carried out investigations in accordance with its usual processes to gather information on the potential beneficiaries, in order to inform its decision regarding payment of the Death Benefits.

It noted that Mr T did not leave a Will, he was not married at the time of his death, and he lived separately from Ms Y. There was no element of financial dependency or interdependency within Mr T and Ms Y’s relationship.

Mr T had completed an expression of wish form, dated 13 September 2014 (the 2014 EOW Form), which nominated Ms Y to receive 100% of his lump sum death in service benefits. There was a previous form, dated 20 February 2009, which again nominated Ms Y. There was also a form dated 12 May 1998, for the predecessor of the Scheme, which nominated Mr H and Ms R to each receive a 50% share of any benefits payable.

It identified Ms Y, Mr H, Ms R, and Mr T’s siblings as potential beneficiaries of the Death Benefits. It sought information about Mr T’s life from each of these parties, as well as from some of Mr T’s former colleagues. It has provided the information it received to The Pensions Ombudsman (TPO), with a number of redactions for details it considers to be of a personal nature.

There were some contradictions in the information it received. However, it concluded that directly prior to Mr T’s death, he and Ms Y had been in a relationship of around 20 years, which was ongoing.

The information provided by Mr T’s three siblings and his ex-colleagues corroborated the information provided by Ms Y about the nature of the relationship. It did not believe it was necessary to discuss this particular point with Ms R. Ms R was no longer in a relationship with Mr T and there was no indication that she would have been able to provide any information about the relationship between Mr T and Ms Y.

It held two telephone calls to discuss the case before reaching its final decision. There are no notes available for either of these calls, nor any other notes or minutes of meetings from the time of its decision that record the process by which it reached the decision.

3 CAS-77483-T9R9 It took a number of factors into account in reaching its final decision. These factors included the following:-

• The 2014 EOW Form. It did not consider there was any evidence to support that Mr T intended to amend this nomination. Although there was no expression of wish form for the benefits associated with Mr T’s DC individual account, it considered the 2014 EOW Form as a relevant factor, given that it was the most recent document expressing Mr T’s wishes.

• There was evidence that Mr T made one-off payments to both Mr H and Ms R. There was also evidence that Mr T had paid for holidays with Ms Y. None of the potential beneficiaries it identified had demonstrated that they were financially dependent on Mr T directly prior to his death.

• While Mr T’s relationship with Ms Y had been long-distance and on a financially independent basis, there was evidence from multiple parties to suggest that the relationship was ongoing at the date of death. This is contrary to what has been claimed by Mr H.

• Mr H and Ms R paid for Mr T’s funeral.

• Mr H was the main beneficiary of Mr T’s estate, so was to receive a benefit in relation to Mr T’s death.

Adjudicator’s Opinion

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1 Edge v The Pensions Ombudsman [1999] 4 All ER 546

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Mr H did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider. Mr H submitted further comments which are summarised as follows:-

• The Trustee’s failure to make a contemporary record of its decision process means it is impossible to verify that all relevant factors were properly considered, or whether irrelevant matters influenced the outcome.

• He has provided evidence that Mr T and Ms Y lived separately, had no financial interdependence, and met only occasionally. This can be supported by multiple witnesses. The Adjudicator’s Opinion does not appear to reflect that evidence. Given that the nominations Mr T made were many years old, the Trustee’s finding that the relationship remained active is questionable.

• The Trustee ignored the evidence that he had taken responsibility for the arrangement of Mr T’s funeral. This was material fact that should have been considered, because it shows that Mr T relied on him for personal affairs and that the relationship with Ms Y had effectively ended. The omission of this evidence demonstrates a failure by the Trustee to take relevant information into account.

• The Trustee appears to have given weight to the fact that he received the third of the three death benefit payments, amounting to £29,394.15, listed in paragraph 6 above. That is not a relevant consideration when deciding the beneficiary of the Death Benefits, as they were separate entitlements.

• He gave up work in order to care full-time for Mr T. This shows genuine dependency which the Trustee did not appear to investigate. It should have been considered a relevant factor.

The Trustee did not submit any comments in response to the Adjudicator’s Opinion, other than to say that it accepted the findings.

I have considered Mr H’s comments, in conjunction with the previous submissions for the complaint, however I agree with the Adjudicator’s Opinion.

6 CAS-77483-T9R9 Ombudsman’s decision

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I do not uphold Mr H’s complaint.

Dominic Harris

Pensions Ombudsman 21 November 2025

8 CAS-77483-T9R9 Appendix – Extracts from the 2017 Deed “SCHEDULE 8

DEFINED CONTRIBUTION SECTION RULES

1. DEFINITIONS…

"Active DC 2017 Member" means a Member who is admitted to membership of this Section of the Scheme on 1 July 2017 immediately following the cessation of CARE Pensionable Service under either Schedule 1, 6, 7A or 7B who has not

(a) subsequently left Service;

(b) opted-out of Active DC Membership under Rule 3.5, Rule 3.6 or Rule 3.7;

(c) commenced receipt of pension benefits under Rule 7; or

(d) died…

…9. DEATH BENEFITS

9.1 Assets to be applied

On the death of a DC Member (except an Active DC 2017 Member), the Trustees may in their absolute discretion apply all or such part as they decide of the following assets (the "Relevant Assets") to provide death benefits in respect of the DC Member:-

9.1.1 his Individual Account; and

9.1.2 in the case of a DC Only Member who dies in Active DC Membership, a cash sum equal to eight times the DC Only Member's DC Pensionable Earnings, or such other amount as the Principal Company notifies in writing to the Trustees in relation to any individual or category of DC Only Members, provided that any such cash sum may (at the discretion of the Principal Company) be limited to the amount of any proceeds received in respect of him from an insurance policy purchased in accordance with Rule 11.4.

9.2 On the death of an Active DC 2017 Member or a DC Member who has been an Active DC 2017 Member and has not transferred his entitlement under the DC Section under Rule 7.3 the Trustees will apply the following assets (the "Relevant Assets") to provide death benefits in respect of the DC Member:-

9.2.1 his Individual Account; and

9 CAS-77483-T9R9 9.2.2 in the case of an Active DC 2017 Member who dies in Active DC Membership, subject to Rule 9.2.3, a cash sum equal to eight times the Active DC 2017 Member's DC Pensionable Earnings, if applicable, or such other amount as the Principal Company notifies in writing to the Trustees in relation to any individual or category of Active DC 2017 Members, provided that any such cash sum may (at the discretion of the Principal Company) be limited to the amount of any proceeds received in respect of him from an insurance policy purchased in accordance with Rule 11.4;

9.2.3 for the purpose of calculating the lump sum under Rule 9.2.2, if the Active DC 2017 Member dies after Normal Retiring Date and a lump sum is payable under either Schedule 1, 6, 7A or 7B (except Rule 11(E)(1) of Schedule 7B Part 2) then this lump sum will be taken into account so that the benefit payable under Rule 9.2.2 and whichever other schedule is applicable to the Active DC 2017 Member will together be equal to eight times the Active DC 2017 Member's DC Pensionable Earnings, or such other amount as the Principal Company notifies in writing to the Trustees in relation to any individual or category of Active DC 2017 Members (including all Active DC 2017 Members) plus the contributions paid by or in respect of the Member (and interest if referred to in the applicable schedule rules).

9.3 Benefits to be provided

The Trustees may apply the Relevant Assets to provide the following benefits in respect of the deceased DC Member:-

9.3.1 a lump sum or lump sums payable in accordance with Rule 11.3; and/or

9.3.2 a pension or pensions to any one or more of his Dependants. Unless the Trustees otherwise decide in any particular case, they shall secure any pension under an Appropriate Policy in accordance with Rule 11.1…

…11.3 Payment of lump sums on death

11.3.1 Any lump sum payable on the death of a DC Member which is expressed to be payable under Rule 11.3 may be paid or applied by the Trustees to or for the benefit of such one or more persons in such amounts, at such times and generally in such manner as the Trustees in their discretion think fit. The Trustees may pay the lump sum in whole or in part to the personal representatives of the DC Member or to trustees to hold upon such trusts and subject to such powers and provisions as the Trustees may direct. In exercising their discretion under this Rule the Trustees shall take account of, but shall not be bound by, any wishes of the DC Member expressed in a statement of wishes form received by the Trustees before the death of the DC Member and not revoked by the DC Member. The Trustees may recover from the lump sum in whole or in part any legal costs incurred by them in exercising their power under this Rule 11.3.1. 10 CAS-77483-T9R9 11.3.2 The Trustees may apply any part of the lump sum in paying, reimbursing or offsetting the cost of any funeral expenses paid or incurred by any person in respect of a deceased DC Member.”

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