Reference: P00950
The member claimed that her illustration for added years had led her to believe that she would be purchasing 4 years 183 days of additional service. In fact, as she was a part-time employee, the amount of service that could be bought was significantly less, as pension was based on full-time equivalent salary. The illustration had referred to a leaflet that explained that, for part-time members, bought reckonable service counted only as a proportion of full-time service. The application form she then signed stated:
“I authorise the deduction of 9% per week/month from my wages/salary in addition to my standard contributions to buy 4 years 183 days”.
The trustees pointed out that the illustration had referred to a booklet and leaflet and that the member had responsibility to obtain the necessary information before proceeding with the contract. She could also have taken independent financial advice.
However, the member observed that the illustration only stated “you may wish to refer” to the booklet. She also said that her IFA had noted the offer of 4 years 183 days in recommending that she buy the added years.
The Ombudsman held that the member had entered into a contract with the trustees when she agreed and began to pay added years contributions and the terms were as set out in the illustration and application form that stated she would pay an additional 9% of salary each month in exchange for an additional 4 years 183 days of pensionable service. There was no indication that, in order to be credited with that amount of service, she would need to pay 9% of the equivalent full time salary.
“Whether by error or design”, the trustees had notified the member that her proposed contribution based on that stated salary would buy her 4 years 183 days added service. The trustees should honour that statement.
