This Editorial at a Glance:

• Why FSVs should not trust the accuracy of their pensions;

• The case of NHS Nurse Leeks;

• An interesting parallel with the Bugler case;

• A High Court judgement on a  maladministration judgement by the Pensions Ombudsman ;

• The High Court decides the term 'Maladministration' is a very flexible term.

Dear Reader,

There is little doubt that Members of Fire Service Pension Schemes are awakening to their individual responsibilities to themselves to regularly check that all is well with their own pension accrual and/or the paying out of their correct benefits.

Simply because it is unwise to trust to the actions of unqualified pension Scheme ‘managers’ found within the FRS.

The days when unqualified pension managers 'know best' are rapidly coming to an end. Perhaps they ought to read the straws in the wind?

Here is one such straw.

The following is an interesting parallel for the Editor’s complaint of maladministration and misfeasance against the LFRS which is currently before the Pension Ombudsman for adjudication, the Editor having exhausted the IDRProcedures against the Lancashire Fire Combined Authority.

A High Court judge, Mr.Justice Sales, has recently confirmed that Scheme administrators are ‘on the hook’ for maladministration errors resulting from alleged problems with ‘automated systems’ which is the latest creative excuse for incompetence, maladministration, malfeasance, call it what you will…

Mr Justice Sales rejected attempts by the NHS Pension Scheme administrator to overturn a Pensions Ombudsman decision that it had been guilty of maladministration for failing to alert a member when she could retire.

In this case of maladministration an NHS Nurse Ms.Leeks having exhausted the NHS IDRProcedures lodged a Complaint with the Pension Ombudsman.

Ms.Leeks successfully complained that she had not been informed by her employer, the NHS Trust, that her pension entitlements had fully accrued by January 2007 and as a result she had been deprived of the opportunity of taking her retirement and pension from that time forward.

The NHS defence was that here had been a ‘glitch’ in an automated notification system(which is simply opportunism which has yet to reach the Fire Service –but it will), but the NHS patently ignored the Statutory duties of their Pension Scheme ‘managers’ to robustly monitor those systems and simple manual systems, if they exist, which is an endemic problem which will be reported on shortly by the Bugler in respect of Lancashire; now its the machines' fault.

The Complaint went before the Pension Ombudsman who made findings of maladministration against the authority. He held that Ms.Leeks had been unaware of the fact she could have retired in January 2007 with a substantial pension; that the employer had not informed her that her pension entitlement had fully accrued; and that it had not ceased deducting pension contributions from her pay. The authority had continued to accept and keep her contributions to the Scheme

Now where has the Bugler heard of unlawful, unjust enrichment, before?

By March 2009 Ms.Leeks had finally been given proper information about her pension entitlements.

The Ombudsman found that the NHS had failed in their pension Scheme duty to liaise with their staff, Ms.Leeks, and that as a consequence she had suffered injustice, amounting to the loss of the benefits which she would have received since January 2007, and that she had been

unjustly denied the opportunity to retire, and to take her pension in January 2007 as a consequence of the maladministration of her NHS pensions.

The Pension Ombudsman found that the primary responsibility for this maladministration lay with NHS Pensions as the Scheme's administrators. The Pension Ombudsman directed that Ms.Leeks be paid the lump sum of £110,000.00 payment, not as a benefit under the scheme, but by the Authority as compensation for the loss of the equivalent amount of benefit caused by maladministration.

In plain English the Pension Ombudsman ‘fined’ the NHS pensions by making them not only pay back these underpaid pension benefits which she would have been paid but also awarded her the exact same sum in compensation for the NHS Pension Scheme’s maladministration.

But of course this does not mean that Ms.Leek's cannot seek further independent  personal compensation through the Courts for her own loss of amenity in addition to her pension income and for the loss of the peaceful enjoyment of her  ‘possession’ under Protocol 1 Article 1 of the Human Rights Act 1998 for the years she ought to have been retired….

The NHS authority appealed but the Chancery Division of the High Court under Mr. Justice Sales dismissed the Appeal, holding that the Pension Ombudsman had been entitled to make his finding of maladministration.

Mr.Justice Sales continued to rather forcefully remind Pension Scheme ‘managers’ ,  in what has been described by industry pundits as a “tough but fair” decision, what the Courts and Scheme beneficiaries have a right to expect from them.

Mr.Justice Sales stated that although the rules of the NHS scheme were complicated, it was the job of the administrator to be the "expert in understanding those rules".

Further, he said: "It has, or should have full, detailed information about their pensionable service for the purposes of the scheme” adding that “Scheme ‘managers’ had a responsibility to check that administration systems were generating the right information for it Members”.

Furthermore, he said "It is reasonable to expect that a scheme administrator such as the Authority should be in a position to give accurate information to scheme members. In particular, it should tell them when their entitlements are complete and when no further contributions are due from them".

The legal team for the NHS acknowledged that "The court has made very clear that maladministration is a very flexible term and even if you have big automated systems, they are still covered by it. You cannot just say ‘there was a glitch' – you need to make sure your systems are up to scratch…”, and one might add that includes providing the professional education leading to professional pension scheme management qualifications for those current ‘managers’ administering the Schemes.

Surely by now the Lancashire Combined Fire Authority will have woken up to the consequences of several hundred of their disabled FSVs pursuing such Complaints with such dire financial consequences for LFRS budgets which the Secretary of State for the DCLG will insist is their failure in Lancashire and thus their responsibility, not his.

But then again, perhaps not?