'Missing member' in Tyler case to be compensated

Deputy pensions ombudsman Charlie Gordon said the innocent member should be put in the position he would have been in had he been part of the bulk transfer on the winding-up of the scheme.

Law firm Sackers said the case – M Tyler v Robert Fleming Benefit Consultants and Minet Benefit Consultancy – serves as a warning to both administrators and trustees to maintain proper records.

Associate Arshard Khan said: "It serves as a useful reminder to administrators and trustees of the need to keep and maintain accurate member records, and to do so for a length of time even after the winding up has been completed.

"Although this case was brought against administrators it is equally possible in other circumstances for scheme trustees to be in the frame for such liability. This may pose problems for trustees in relation to satisfying any such liability because the assets of the scheme will have all been transferred."

He added: "Trustees who have concerns about the prospect of a residual liability in respect of a missing member hanging over them should consider the appropriateness of insuring against that risk prior to transferring or paying out all the scheme assets."

Tyler joined the scheme in 1973, and left the firm in 1981. Tyler’s name appeared in the pension scheme’s member details as at 1988, but by 1992 it was no longer there.

Khan said the DPO expressed considerable sympathy for Tyler.

By the time that he became aware that there was a problem the scheme had been wound-up. While the two sets of administrators wrangled with each other over who was responsible, he was losing out financially.

At some point between 1988 and 1992 Tyler’s name was missed off the record of deferred members. The DPO found that the responsibility for the disappearance lay with Minet, the administrators during that period.