The Pensions Ombudsman (TPO) has upheld a complaint against the DXC and DXC Pension Trustee Limited for the non-financial injustice an employee had suffered for the delay in completing the Internal Dispute Resolution Procedure (IDRP).

The complainant, Ms Y, said that the company had delayed an her redundancy date and changing the scheme’s actuarial factors, causing financial detriment.  

Ms Y was informed that in 2017 her role was at risk of redundancy and phoned the scheme administrator to ask for a retirement quotation for her possible redundancy.

The scheme administrator gave her a benefit statement that set out potential benefits payable from the day after any confirmed redundancy date.

Ms Y attended several meetings with company representatives to discuss her possible redundancy and was made redundant on 2 July 2017, with a severance payment of £35,179.23 plus payment in lieu of notice totalling £19,236.97.

Ms Y emailed the scheme administrator, Mercer, asking for a retirement quotation and it sent the retirement quotation for benefits from 12 July 2017, including a full pension of £33,062.44 a year or a pension commencement lump sum (PCLS) of £201,506.56 plus a residual pension of £26,552.28 per year.

The complainant contacted the scheme administrator to question why there was a reduction of almost £900 per year between the full pension quoted in the original statement and the later quotation.

Ms Y said she wanted clarification on the new actuarial factors and later complained under stage one of the scheme’s IDRP.

She said the change in redundancy date had caused her to suffer a pension reduction of around £900 a year and suggested her benefit entitlements should be recalculated based on a redundancy date of 31 May 2017, using the old actuarial factors.

The trustee responded to this and said a ‘pensions bulletin’ relating to the scheme was distributed to members in early 2018, confirming that there would be changes in its commutation factors.

It also said benefits must be paid per the scheme rules using any actuarial factors approved by the trustee even though there was a lack of information provided to members.

It said, therefore, it was not possible to recalculate Ms Y’s benefits using the old actuarial factors that would have been applicable, had the termination date been 31 May 2017.

Ms Y submitted a retirement claim form to the scheme administrator having elected to take a full pension with no PCLS, which was processed.

Ms Y appealed under stage two of the IDRP and said she hadn’t received the pensions bulletin in 2018 and had not received a response to her complaint under stage one of the IDRP for almost a year.

She said she was forced to rely on her redundancy lump sum payment which she had previously intended to invest.

The trustee said that a response would be provided to her within two months of the date on which she made her complaint but, in this case, it may take “slightly longer”, but no response was given, which led to Ms Y chasing the trustee for a response about six months later.

The trustee responded, suggesting the delay was due to the company not responding promptly and the response was due “imminently”.

The trustee said there had been an “unreasonable delay” in responding to her complaint under the IDRP.

The company had acknowledged that it contributed to this delay and agreed to award her £2,000 in recognition of the resulting distress and inconvenience she suffered.

However, the £2,000 award offered to Ms Y was not paid. The scheme administrator and the company were allowed to comment further on their position regarding Ms Y’s complaint but chose not to do so.

The case was then passed onto an adjudicator to consider who concluded that no further action was required by the trustee or the company.

In the adjudicator's opinion, there was no evidence that Ms Y suffered financial detriment resulting from maladministration by the trustee, company, or scheme administrator in quoting reduced benefits in November 2017 quotation.

However, the adjudicator said the company’s award of £2,000 to Ms Y was sufficient recognition of the non-financial injustice she had suffered, for the delay in completing the IDRP between 1 February 2018 and 7 April 2020.

The trustee, company, and scheme administrator accepted the adjudicator’s opinion, but Ms Y did not, and the complaint was passed to deputy pensions ombudsman, Camilla Barry, to consider.

“The company’s previous offer of £2,000 is sufficient recognition of the serious distress and inconvenience Ms Y suffered due to the delay in completing the IDRP but I understand that it has not been paid. I uphold Ms Y’s complaint,” Barry said.

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