Reference: M00251
The provisions of the scheme provided that early retirement was conditional on employer consent and after consent had been given members were given six months to exercise their option. The pension for active members was reduced by 3% per annum and for deferred members by 6% per annum for each year of retirement before normal retirement age.
The complainant was made redundant and at his request provided with an early retirement quotation. Although employer consent had not been given, the quotation was calculated on the basis that he was retiring from active service and did not state that the quotation was conditional on such consent. When, within six months of the quotation being provided, the member asked to receive the benefits backdated to the date of his redundancy, he was refused and told that the employer did not consent to him retiring as an active member. The member was given the option of taking early retirement as a deferred member.
The Ombudsman found that it was maladministration of the employer not to have informed the member that he could ask for early retirement on beneficial terms and that he would have six months in which to make up his mind. He also found maladministration on the part of the administrator because it had not obtained the employer’s consent before providing the quotation or warned that the quotation was conditional on the employer’s consent.
The Ombudsman concluded that the employer would have consented to the member’s early retirement as an active member had consent been sought at the time the quotation had been provided. He directed that the complainant should be treated as if the employer’s consent had been given and therefore he should receive benefits on the basis that he had taken early retirement from active service with the consent of the employer.
The case indicates that in certain circumstances the Ombudsman considers that the employer is under a duty to communicate proactively with a member where a valuable option is available.
