Member complaints. Reading between the lines in the Grievson case

Jason Shaw

The recent High Court decision in Grievson raises some interesting questions about the extent to which the Pensions Ombudsman (and possibly, by extension, trustees) should ‘fill in the blanks’ when a member’s complaint is not as well articulated (in terms of legal arguments) as it might be. It also highlights the importance of ensuring that every aspect of an IDRP or Ombudsman complaint is addressed.

The case was an appeal from an Ombudsman determination and concerned the calculation of a transfer value from a SASS in which the complainant was one of only two members. The complaint was that the transfer value had not been calculated in accordance with previous actuarial valuations. Those valuations had notionally split the assets between the two members. The complainant considered that his transfer value should have been his share of the fund as set out in those previous valuations.

The Ombudsman found against the complainant on the grounds that the split of assets in the valuations was a mere ‘notional’ split and did not confer on the complainant any beneficial entitlement to those assets. The complainant appealed.

The Court stated that the appeal rested on two alternative arguments. The first argument being that the transfer value should have been calculated on a share of fund basis. The second argument being one of estoppel.

In relation to the first argument, the High Court upheld the Ombudsman’s decision in relation to the split of assets being a notional split. However, the interesting point arises in relation to the estoppel argument. The Court acknowledged that the member’s complaint to the Ombudsman had not mentioned the word “estoppel” at all. Despite this, the judge held that as the member had alleged that the transfer value departed from previously agreed actuarial values and he had suffered injustice in the form of no longer being able to plan for his retirement, these allegations raised the question of estoppel and estoppel should therefore have been considered by the Ombudsman. The judge held that “generous allowance” must be made for the fact that the member was unrepresented and that the process of complaining to the Ombudsman is an informal one.

The complaint was remitted back to the Ombudsman to determine whether estoppel had been established.

The decision rests easily with the informal, investigatory, nature of the Ombudsman’s office and, in my experience, the Ombudsman does tend to look at the allegations rather than requiring the member to have spelt out the legal basis for their challenge e.g. negligence, estoppel by representation etc. But it does beg the question of how far the Ombudsman should go to ‘fill in the blanks’ of a member’s complaint and, by extension, how far trustees should go to do the same. The decision is also an important reminder to trustees of the need to ensure that IDRP responses, and Ombudsman determinations, address all the issues that the member has raised. If they don’t, the member may get a second chance at the complaint, thus doubling the time and cost involved of resolving that complaint.

Jason Shaw is a senior associate at Allen & Overy LLP.

Comments published on Pensions Talk do not necessarily reflect the views of Allen & Overy or its clients.

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