Ombudsmans Solution Proves Costly

A solicitor who was unhappy with the decision of the Pensions Ombudsman found, to his cost, that the Ombudsman does have discretion in the remedy he orders.

Richard Henderson was employed by a firm of solicitors which sent him to work at their office in Hong Kong. At the time of the transfer, the firm had agreed to admit him to their pension scheme, which was one to which both the firm and the employee made contributions. The admission was to be backdated to the time he joined the firm, which was a few years before the transfer. In fact, the firm failed to make him a member of the scheme and on his return to the UK, after three years abroad, he took action.

The decision of the Ombudsman was that the firm should have admitted Mr Henderson and that they should be prepared, on request, to determine a transfer value for his pension rights, so that his pension fund could be transferred to a new scheme. However, this was contingent on Mr Henderson paying the ‘missed’ contributions into the pension scheme from the time he went to Hong Kong. As this would have involved considerable expenditure by Mr Henderson, he applied to the court to overturn the Ombudsman’s decision and replace it with a straight payment of compensation to him.

The court did not agree, ruling that the Ombudsman had the discretion to decide on settlements other than the mere payment of damages.