Mmc Uk Pension Fund · CAS-69635-V3Q8

CAS-69635-V3Q8

Ombudsman’s Determination Applicant Mrs S

Scheme MMC UK Pension Fund (the Fund)

Respondents Mercer Limited (Mercer) MMC UK Pension Fund Trustee Limited (the Trustee)

Outcome

Complaint summary

Background information, including submissions from the parties The sequence of events is not in dispute, so I have only set out the salient points. I acknowledge there were other exchanges of information between all the parties.

It should be noted that Mercer’s parent company acquired Jardine Lloyd Thompson (JLT) Group plc in April 2019. Mrs S was previously a member of the JLT Pension Scheme, administered by JLT, when its assets and obligations were transferred to the Fund in 2020. It is now the ‘JLT section’ of the Fund. For ease of reference, I have only referred to the Fund and Mercer throughout this Determination.

The section of the Fund Mrs S is a member of is governed by the Seventh Definitive Deed and Rules relating to the JLT Pension Scheme dated 10 September 2015 (the Fund Rules). The section headed ‘Part 1: Definitions’ states:-

“Pension Supplement” means in relation to a Member a supplement of the amount by which the pension to which he is entitled under the Scheme falls short of the pension to which he would have become entitled if, in the definition of “Pensionable Salary”, the words from “but only” to the end were omitted. The effect of the Pension Supplement (where payable) is that if a 1 CAS-69635-V3Q8 Member’s pension becomes payable before he reaches the state pensionable age applicable to him at that time, the amount of such pension will be of an increased amount until the Member attains such state pensionable age, to take account of the fact that the Member's Basic Pension will not commence until he attains that age provided that the state pensionable age shall not for these purposes exceed age 65.”

‘Commencement of deferred pension’ Rule 8.1 in ‘Part 4: Defined Benefit Rules’ of the Fund Rules states:-

“If a Long Service Member leaves Service (otherwise than by death), before Normal Retirement Date and is not in receipt of a pension in accordance with Rule 8. 7 or postponed payment of his pension under Rule 8.8 he shall be entitled to a deferred pension commencing at Normal Retirement Date calculated in accordance with the formula and subject to the limits in Rule 5.2.”

“(1) Before 1st June following the end of the tax year, an employer must give a certificate (Form P60) to every employee—

(a) who was in the employer’s employment on the last day of the tax year, and

(b) from whose relevant payments the employer was required to deduct tax at any time during that tax year…”

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On 9 May 2019, Mrs S emailed Mercer complaining that she had not reached her State Pension Age in March 2019 nor received a payslip confirming a benefits reduction. Mrs S also said that Mercer had failed to notify her of the benefits reduction before it was applied, or how the overpayment figure of £37.04 had been calculated. She also requested a full copy of her retirement claim form.

On 13 May 2019, Mercer emailed Mrs S to acknowledge the complaint and said that a response letter dated 8 April 2019 had been sent to her.

On 20 May 2019, Mercer emailed Mrs S and said it was regrettable that she found it necessary to raise her “concerns”. Mercer said the “issues” Mrs S had raised would be investigated by its Administration Team and a response would be sent within five days. Mrs S emailed Mercer in response and said that she would like a complaint number.

On 21 May 2019, Mercer emailed Mrs S and provided the requested complaint number.

On 31 May 2019, Mercer sent Mrs S a P60 for the 2018/2019 tax year.

On 27 June 2019, Mercer wrote to Mrs S and provided a pre-paid envelope and a full copy of her signed retirement claim form, with a letter stating that:-

• Under the Fund Rules a supplementary pension was payable when a qualifying member’s retirement benefits from the Fund went into payment before they had reached the State Pension Age. The supplementary pension could continue up to State Pension Age provided that this did not exceed age 65. That information had not been clearly communicated in the letter dated 16 April 2014.

3 CAS-69635-V3Q8 • Pension payslips were normally sent following a change of £1 or more from the previous month’s pension instalment. This was for information purposes only, and not as a formal notification of any changes to pension entitlements. Under normal circumstances, a letter would have been sent confirming the benefit reduction before it was applied. Due to excess workloads that Mercer was experiencing at the time, this procedure was missed, and her supplementary pension was not ceased appropriately.

• The value of her supplementary pension was £554.90 per year or £46.25 a month gross, which was £37.04 per month net. Pension instalments were paid in advance on the last working day of each month. So, she had received payment for April 2019 on 29 March 2019, including the overpayment of supplementary pension. Since the supplementary pension subsequently ceased from May 2019, a payslip was sent to her in April 2019.

• A recording of the telephone call on 1 May 2019 had not included the section of the conversation in which she requested a pre-paid reply envelope. So, an envelope was not sent to her in response.

On the same date, Mrs S emailed Mercer quoting three complaint numbers to which she said no responses had been received. Mrs S also said that her complaint of 1 May 2019 had not been resolved in accordance with the timescale set out in the complaints handling procedure.

On 29 June 2019, Mrs S emailed Mercer asking for a copy of the IDRP.

On 1 July 2019, Mercer emailed Mrs S and said that the letter dated 27 June 2019 had been sent in response to her complaint of 1 May 2019.

On the same date, Mrs S wrote to Mercer confirming that she had received a pre-paid reply envelope on 29 June 2019 and attached a cheque for £37.04 to the letter as a refund for the overpayment. Mrs S also said she would like a revised P60 for the 2018/19 tax year, reflecting her benefits reduction.

Between 2 July 2019 and 16 July 2019, Mercer and Mrs S exchanged several emails in which Mercer informed Mrs S that her complaint had been escalated under the Fund’s IDRP ‘on her behalf’. Mercer said Mrs S would receive a response from the Trustee “shortly”.

In response Mrs S said:-

• She had not received a copy of the Fund’s IDRP, as requested on 29 June 2019.

• She would like details of the complaint that had been made under the IDRP on her behalf.

On 18 July 2019, Mercer emailed Mrs S a copy of the Fund’s IDRP and said the level of service provided to her had been poor, including a failure to provide information promptly and send updates on her complaints. 4 CAS-69635-V3Q8 On 27 August 2019, Mrs S complained under the Fund’s IDRP and reiterated the grievances she had previously raised on 1 May 2019 and 27 June 2019. In summary Mrs S also said:-

• A pre-paid envelope was not initially provided in response to a request she made during the telephone call on 1 May 2019. The letter of 8 May 2019 subsequently failed to address all the issues she had previously raised by telephone on 1 May 2019. It quoted a net overpayment of £37.04 but included no details regarding how that figure was calculated and only a partial copy of the retirement claim form was attached, without her signature.

• Mercer’s email dated 20 May 2019 was “confusing” since it referred to “concerns” she had raised rather than “complaints” and stated that the matter had been referred to the Administration Team. Previously, she had assumed that the Administration Team was already dealing with her complaints.

• She considered that the deadline for any pension payroll amendments, before paying her monthly pension instalment on 30 April 2019, would have been on or around 15 April 2019. Mercer ought to have ensured that the supplementary pension was ceased appropriately and sent a letter regarding the related reduction before it was applied. Excess workload was an inadequate explanation for Mercer’s failure do so.

• Her letter of 1 July 2019 requested a revised P60 for the 2018/2019 tax year following the retirement benefits reduction, but Mercer failed to provide this documentation. Mercer’s email dated 1 July 2019 inappropriately confirmed that a complaint response had already been sent on 27 June 2019.

• Mercer’s email dated 2 July 2019 stated that no further responses would be sent by email; she would need to provide her telephone number for a verbal response or she could call a named complaint handler. However, the same email also confusingly confirmed that she could raise enquiries via the Customer Support Centre.

• Mercer wrote to her from two different email addresses, and she did not know which one to use in response. Her complaints may have been dealt with more efficiently if one staff member, in the Administration Team, had taken responsibility for dealing with them. The poor service provided by Mercer caused her distress and inconvenience.

On 28 January 2020, Mercer wrote to Mrs S regarding another matter and confirmed that her record had been updated following the benefits reduction and corresponding details provided to HM Revenue & Customs (HMRC).

In April 2020, the Trustee took over management of the Fund from the Trustee of the JLT Pension Scheme.

5 CAS-69635-V3Q8 On 19 May 2020, Mrs S sent an email directly to the Secretary of the Trustee. Subsequently, Mrs S’ complaint under the Fund’s IDRP was escalated to the Trustee on 9 June 2020.

On 21 July 2020, the Trustee wrote to Mrs S in response to her complaint under the Fund’s IDRP and said:-

• She had not reached the State Pension Age in March 2019, as stated in the letter dated 30 April 2019. However, under the Fund Rules, the supplementary pension was due to cease at age 65 in March 2019. Mercer ought to have reduced her pension from April 2019 and sent her a pension payslip reflecting this reduction in March 2019. Mercer should also have sent her a letter confirming the reduction before applying it.

• Calculation of the overpayment and the way in which it related to her April 2019 pension instalment was as stated in Mercer’s letter dated 27 June 2019. The letter dated 8 May 2019 correctly confirmed that she had completed a retirement claim form in 2014, even though the copy it provided did not include the signature section.

• She should have received an explanation that a supplementary pension provides benefits from the Fund intended to bridge the gap between retirement and State Pension Age, or age 65, whichever is sooner.

• When her original complaint was raised by telephone on 1 May 2019, it was not recorded that she had not received a pre-paid envelope. So, that point was not addressed in Mercer’s letter of 8 May 2019.

• The words ‘concerns’ and ‘complaints’ are aligned by Mercer and the Trustee to mean the same thing in addressing complaints. It was regrettable that she found this “confusing.”

• Her complaint under the Fund’s IDRP should have been acknowledged within 10 working days. Mercer’s email of 13 May 2019 failed to confirm the timescale for sending a full response following her complaint of 9 May 2019.

• Mercer’s Customer Support Centre was a specialist team within its administration area that provided a first point of contact for members. The Customer Support Centre had been trained to deal with “most” pensions-related enquiries and the Administration Team dealt with more complex matters.

• She had been provided with conflicting information in July 2019 regarding the way in which she should contact Mercer. However, she could have responded to either email address that Mercer had written to her from, since those responses would have been received in the same mailbox. Since this could be a source of confusion, Mercer had subsequently changed its procedures so that messages were only sent from a single email address.

6 CAS-69635-V3Q8 • An award of £750, in recognition of the distress and inconvenience she had suffered as a result of errors made by Mercer and the delay in responding under the Fund’s IDRP, was appropriate.

On 29 July 2020, Mrs S emailed Mercer and complained that her P60 for the 2018/19 tax year was incorrect and she had not received a copy of the IDRP complaint raised on her behalf by Mercer.

On 7 August 2020, the Trustee emailed Mrs S and said:-

• The overpayment of £37.04 had been returned in the 2019/20 tax year but was applicable to the 2018/19 tax year. So, Mercer had confirmed that the correct P60 details for those tax years were:-

Tax Year Gross Pension Tax Deducted Final Tax Code

2018/2019 £6,085.32 £1,217.00 BR Cumulative

2019/2020 £5,755.88 £1,151.00 BR Cumulative

• The original P60 figures for the 2018/2019 tax year had been a gross pension of £6,131.56 and tax deducted of £1,226.20. However, after the overpayment was returned, the correct figures were as quoted above. Those figures had also been submitted to HMRC on 27 January 2020, and Mercer would send her a “copy” of the P60.

• Her complaint of 27 August 2019 was considered under the Fund’s IDRP, in the letter of 21 July 2020. Mercer had initially failed to pass on that complaint to the Trustee, resulting in the delay.

On 10 August 2020, Mrs S emailed the Trustee and questioned why there was a delay in sending her amended pension details to HMRC and said that she required a related P60 for the 2018/2019 tax year.

On 13 August 2020, Mercer wrote to Mrs S regarding another matter and reiterated the pension details previously provided in the Trustee’s email dated 7 August 2020.

On 24 August 2020, the Trustee emailed Mrs S and confirmed that there had been a delay in providing her amended pension details to HMRC for the 2018/19 tax year. However, it was not Mercer’s standard practice to send a revised P60 automatically, following amendments to a member’s pension details.

Between 21 October 2020 and 5 January 2021, Mrs S exchanged several further emails with the Trustee in which she complained about not receiving a revised P60 for the 2018/19 tax year nor copies of the complaint submitted under the Fund’s IDRP on her behalf by Mercer.

Mrs S also confirmed that she had previously sent figures to HMRC based on the incorrect P60 for that period, but she had sent revised tax returns to HMRC for the

7 CAS-69635-V3Q8 2018/19 tax year based on the amended pension details provided by Mercer for that period.

In response the Trustee said:-

• HMRC did not require revised P60s to be provided; once published, they could not be amended.

• If Mrs S received any penalty charges from HMRC in response to the incorrect pension details she provided or in respect of not providing a revised P60, the Trustee would reimburse her payment of any such charges.

• Mercer would not provide a copy of the IDRP complaint it had raised on her behalf since she had not personally initiated that complaint, and so it was irrelevant.

The Trustee’s position

The delay in responding to Mrs S under the Fund’s IDRP between August 2019 and July 2020 was due to maladministration by Mercer. The Trustee only took over management of the Fund in April 2020; previously that role was performed by the Trustee of the JLT Pension Scheme. So, Mercer should have referred Mrs S’ IDRP application to the Trustee of the JLT Pension Scheme in August 2019, and it could then have been dealt with within four months in accordance with normal procedures. Instead, Mercer escalated Mrs S’ IDRP complaint to the Trustee on 9 June 2020, which meant that no response was sent to her until 21 July 2020.

Mercer also has a service level agreement (SLA) that required it to send responses to member enquiries within 10 working days. Mrs S’ enquiries and subsequent complaints were handled poorly by Mercer. A £750 award had appropriately been offered to Mrs S in recognition of the resulting distress and inconvenience she had suffered.

Mrs S’ position

Neither Mercer nor the Trustee had addressed the delay in providing her with accurate pension details for the 2018/19 tax year. The P60 for the 2018/19 tax provided by Mercer on 31 May 2019 was incorrect. She asked for an amended version on 1 July 2019 but that request was ignored.

It was not until 13 August 2020 that Mercer confirmed her correct pension details for the 2018/19 tax year. That letter was sent 15 months late, and 12 months after she had requested an amended P60. By that time, it was also seven months after the deadline for submitting her tax returns to HMRC for the 2018/19 tax year.

HMRC had not imposed any penalty for the incorrect pension details she initially provided for the 2018/2019 tax year. However, it was unclear how many years later HMRC could investigate the matter and apply a penalty retrospectively.

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Adjudicator’s Opinion

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Mrs S’ additional comments

Mercer incorrectly referred to her having reached the State Pension Age in the letter dated 30 April 2019. Mercer also sent her an incorrect P60 for the 2018/19 tax on 31 May 2019 then provided revised figures over 16 months later.

10 CAS-69635-V3Q8 Between 1 May 2019 and 29 June 2019 there were frequent communications between her and Mercer. During that period, she emailed Mercer on 9 May 2019 asking for answers to points she had raised on 1 May 2019. In response Mercer wrote her on 13 May 2019 and said that a reply to her enquiry had been sent by letter on 8 May 2019. This was not possible since any such response would have been sent before her email of 9 May 2019.

Mercer emailed her on 20 May 2019 confirming that her questions had not been answered and that a response would be provided by its Administration Team. She emailed Mercer on the same day asking for a complaint number relating to the complaint of 9 May 2019 and on 27 June 2019 she emailed Mercer quoting complaint numbers to which she had not received replies.

Mercer’s failures show that it was not handling her complaints in accordance with its normal deadlines. Mercer’s staff had not understood her enquiries since at times they thought her questions had been answered when this had not been the case. The responses provided by Mercer were poor and it also referred to her having raised “concerns” rather than “complaints”. Those two words have different meanings.

Mercer ought to send pension payslips and a letter confirming pension payment changes by first class post at least a week before making the related payment or the date of any changes being implemented.

Although HMRC does not require a revised P60 to be issued, Mercer informed her on 7 August 2020 that a revised P60 would be sent then failed to act accordingly. Mercer was subsequently incorrect in concluding that an amended P60 cannot be provided. The Gov.UK website confirms that a revised P60 can be issued by an employer.

Mercer raised the IDRP complaint on her behalf and did not escalate her complaints. It then failed to provide copies of the IDRP application and the response to it, despite her asking for this information on six occasions. The IDRP complaint was raised correctly since she nominated Mercer to submit it on her behalf.

The poor service provided by Mercer caused her distress and inconvenience that has not been sufficiently recognised in the award of £750. Mercer had made numerous and repeated errors over a prolonged period and missed opportunities to correct those errors. Mercer had also failed to recognise the possibility of HMRC imposing a penalty for providing misinformation based on the incorrect P60 for the 2018/2019 tax year.

Ombudsman’s decision

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The P60 for the 2018/2019 tax year that Mercer subsequently sent to Mrs S on 31 May 2019 was correct at the time it was sent since it was not until 1 July 2019 that Mrs S sent the required refund to Mercer. There was no requirement under the 2003 Regulations for Mercer to send Mrs S a revised P60 reflecting that refund. Though I agree with the Adjudicator that it would have been prudent for Mercer to have done so.

However, Mercer did not update HMRC regarding Mrs S’ revised figures for the 2018/2019 tax year until 28 January 2020. The Trustee also delayed informing Mrs S of the amended figures until 7 August 2020, with confirmation sent by Mercer on 13 August 2020. I find that these delays from 1 July 2019 amount to further maladministration by Mercer and also the Trustee.

I acknowledge that the Trustee’s email dated 7 August 2020 suggested that Mercer would send Mrs S a “copy” of a revised P60 following the changes. However, Mrs S expectation in that regard did not change the fact that there is no legal requirement or need, for either Mercer or the Trustee, to provide Mrs S with a revised P60 for the 2018/2019 tax year. By August 2020 Mrs S had received confirmation of the revised figures, which Mercer had also previously provided to HMRC.

Further, Mrs S has confirmed that HMRC did not subsequently impose a penalty on her for providing misinformation based on the original incorrect P60. An award on the basis that HMRC may in the future impose a penalty would not be appropriate as there is no evidence of financial detriment to Mrs S. Also, the Trustee has confirmed that it would reimburse Mrs S in the unlikely event of any such penalty charge. I consider this to adequately address any potential tax liability that might arise.

It was not possible for Mercer to have responded on 8 April 2019 to Mrs S’ complaints of 1 May 2019 and 9 May 2019. However, a response was provided on 27 June 2019, outside of the timescale set out in the complaints handling procedure. Mercer has acknowledged that it failed to respond promptly to Mrs S’ enquiries and complaints. I find that this amounts to further maladministration by Mercer.

Mrs S has said that Mercer’s use of the word ‘concerns’ instead of ‘complaints’ was incorrect since those words have different meanings. Mercer aligns the words ‘concerns’ and ‘complaints’ to mean the same thing in addressing complaints. I consider that the way in which Mercer dealt with Mrs S’ complaints was of greater 12 CAS-69635-V3Q8 significance than whether it used the word “concerns” in any complaint correspondence to her. I note that Mrs S quoted three complaint numbers in the email dated 3 June 2019 to Mercer. So, Mrs S ought to have been aware that the “concerns” Mercer had referred to on 20 May 2019 were being considered as complaints.

Mrs S has also complained that Mercer initially raised an IDRP complaint on her behalf but did not escalate her complaints. It then subsequently failed to provide copies of the IDRP application and the response to it. The Trustee has confirmed that Mercer would not provide a copy of the IDRP complaint it had raised on Mrs S’ behalf since she had not personally raised that complaint. I find that this does not amount to maladministration since Mrs S was subsequently given the opportunity to submit an IDRP application herself, which she did on 27 August 2019.

I find that the maladministration identified in paragraphs 69, 71 and 74 above would have caused Mrs S significant distress and inconvenience. The Trustee’s award of £750 is sufficient recognition of this non-financial injustice. The errors Mercer made, including the relatively small overpayment of £37.04 that Mrs S’ subsequent complaints related to, were not sufficiently serious or prolonged to justify a larger award. Mrs S should contact Mercer if she would now like to accept the £750 award.

I do not uphold Mrs S’ complaint.

Anthony Arter CBE

Deputy Pensions Ombudsman 20 November 2024

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