Tie Uk Limited Retirement Fund · CAS-99744-B8V5

CAS-99744-B8V5

Ombudsman’s Determination Applicant Mr E

Scheme TIE UK Limited Retirement Fund (the Fund)

Respondents BESTrustees (the Trustees)

Aon Solutions UK Limited (Aon)

Toyota Material Handling UK Limited (the Employer)

Outcome

Complaint summary Mr E’s complaint concerns the provision of an incorrect retirement quotation he was sent by Aon in September 2021.

Background information, including submissions from the parties

Between 1 November 1998 and 5 June 2003, Mr E was a member of the Fund, a defined benefit occupational arrangement, administered by Aon. Mr E’s normal retirement age (NRA) under the Fund was 65, which he reached in August 2020.

On 20 May 2020, Aon sent Mr E a retirement quotation for his Fund benefits. At his NRA, in August 2020, he was eligible to receive a yearly pension of £5,476.80, or he could claim a maximum tax-free cash lump sum of £21,819.04, with a reduced annual pension of £3,272.86.

In August 2020, Mr E told Aon that he wished to defer claiming his Fund benefits until August 2021, when he turned 66. He said it should send him a retirement quotation prior to this date.

1 CAS-99744-B8V5 On 19 March 2021, Aon sent Mr E a retirement quotation which explained that the current value of his yearly pension was £6,508.21.

On 15 September 2021, Mr E contacted Aon as he had not yet received a retirement quotation for claiming his benefits in August 2021.

On 16 September 2021, Aon sent Mr E a retirement illustration, for an annual pension of £5,827, based on an effective date in August 2021 (the Quotation). Alternatively, he could claim a tax-free lump sum of £22,627.97 with a reduced annual pension of £3,394.20.

In response, Mr E queried the figures he received as he believed that his annual pension should have been nearer to £6,500, increased up to £6,860 due to the inclusion of a late retirement uplift. Aon explained that the Quotation was correct; however, Mr E was unsatisfied with Aon’s response and asked for a breakdown of how the figures had been calculated.

Between 6 and 27 October 2021, Mr E emailed Aon four times as he had not heard from it since 16 September 2021. He had completed and returned the necessary declaration forms to claim his pension from August 2021, however, he was yet to receive any payments.

On 1 November 2021, Aon telephoned Mr E to discuss the calculation of his Fund benefits. Mr E followed up the telephone call with an email summarising what he discussed with the Aon representative.

On 2 November 2021, Aon provided Mr E an amended quotation, and explained that his recalculated entitlement was an annual pension of £6,508.21, uplifted by a factor of 1.064 (for late retirement) to £6,924.85.

In response, Mr E asked Aon to confirm that his pension would be backdated to August 2021. He said that he should be provided with compensation in recognition of the distress and inconvenience he suffered due to Aon’s errors.

On 6 November 2021, Mr E chased Aon for a response to his email of 2 November 2021.

On 10 November 2021, Aon responded to Mr E and explained:-

• If his pension was effective from August 2021, his annual pension would have been £6,924.96. On 4 December 2021, he could receive an arrears payment of £1,845.07, which was comprised of the payments he should have received since August 2021.

• As it had been more than two months since his selected retirement date of August 2021, he could choose to have his pension effective from October 2021. In doing so:

2 CAS-99744-B8V5 o he would be due an additional two months of late retirement uplift; however, his pension would not be backdated to August 2021;

o his annual pension would be increased from £6,924.96 to £6,996.48; and

o on 4 December 2021, he would receive an arrears lump sum of £698.05.

• He should confirm whether he wanted his pension to be effective from August or October 2021.

In response, Mr E said that he wished for his pension to be effective from August 2021.

On 17 December 2021, Aon apologised for the incorrect calculation of Mr E’s pension, and for the service he had received. It offered him £100 in recognition of any distress and inconvenience he suffered.

On 10 January 2022, Mr E emailed Aon and said that its response did not sufficiently convey, or recognise, the seriousness of its error in calculating his pension. If he accepted the figures provided on 16 September 2021, he could have incurred a loss of £25,000 over his lifetime. He had to contact Aon on a number of occasions about the Quotation. The service he had received was unacceptable and had caused him distress and inconvenience which he should be compensated for.

On 18 February 2022, Aon informed Mr E that its letter of 17 December 2021 was its final response on the matter. However, he was free to ask for his complaint to be investigated under the Fund’s Internal Dispute Resolution Procedure (IDRP).

On 8 March 2022, Mr E asked for his complaint to be considered under the Fund’s IDRP.

On 5 July 2022, the Secretary to the Trustees provided its IDRP response and said that Mr E’s complaint had been considered by the Trustees and explained that:-

• The Quotation was incorrectly calculated due to a human error in a figure being incorrectly transposed.

• The Trustees apologised for the error in the Quotation, and for the service that he had received from Aon thereafter.

• The Trustees were working with Aon to help mitigate the risk of any similar errors occurring in the future and to ensure that Aon’s response times were in line with the agreed service level agreement.

• It was accepted that Aon’s service fell short of what the Trustees would normally expect. However, the error in calculating the Quotation had not resulted in a financial loss.

• The Trustees increased the offer of £100 to £500 in recognition of the distress and inconvenience Mr E had suffered. 3 CAS-99744-B8V5 On 7 July 2022, Mr E emailed Aon and said that the offer of £500 did not adequately address the level of distress and inconvenience he had suffered. Aon should consider increasing the offer.

On 7 July 2022, Mr E emailed the Employer to outline his dissatisfaction with Aon and the Trustees. Upon receipt of Mr E’s email, the Employer referred the matter onto the Trustees.

Between July 2022 and August 2022, Mr E corresponded with the Trustees about increasing the offer of £500. The Trustees apologised for any inconvenience Mr E suffered; however, they did not agree that it merited an award in excess of £500.

On 3 August 2022, Aon contacted Mr E and explained that, in order to bring about a final resolution to his complaint, it was prepared to increase the offer to £577.08. This was equal to the value of his monthly pension.

On 2 September 2022, the Trustees agreed that it would pay Mr E £500, this was in addition to the sum of £577.08 that Aon had offered Mr E. In total, if he accepted the offers from the Trustees and Aon he would receive £1,077.08. This represented the final offer from both parties.

Between August 2022 and November 2022, Mr E continued in extensive correspondence with the Trustees, the Employer, and Aon. He expressed his continued disappointment and frustration that the compensation did not adequately reflect the distress and inconvenience he suffered and that it should be increased. He reiterated, on a number of occasions, that if the error in calculating his pension was not corrected he would have suffered a loss of over £1,000 a year, and a total loss of £25,000 over his lifetime.

Adjudicator’s Opinion

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Mr E did not accept the Adjudicator’s Opinion, and the complaint was passed to me to consider. Mr E provided his further comments which did not change the outcome. I agree with the Adjudicator’s Opinion and note the additional points raised by Mr E, which are summarised below:-

• He contacted Aon on four occasions with his concerns that there was an error in the calculation of his entitlement under the Fund. It was not until 2 November 2021, that Aon conceded that there was an error in its own calculations.

• It took a further four attempts for Aon, and the Trustees, to consider paying him an amount in recognition of the distress and inconvenience he suffered due to their actions. He did not agree that £1,077.08 sufficiently recognised the stress, anxiety, frustration and inconvenience he suffered.

• He believed that Aon’s actions amounted to incompetence as opposed to maladministration. This, in his view, caused far more work for him in having to pursue Aon and the Trustees about the error and his request for sufficient compensation.

5 CAS-99744-B8V5 Ombudsman’s decision

I do not uphold Mr E’s complaint.

Anthony Arter CBE Deputy Pensions Ombudsman

29 October 2024

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