UK - Unum Provident has been ordered to pay £66,000 plus legal expenses after poor communication with scheme trustees left a widow without her full pension entitlement.
Mrs Pollitt complained to the pensions ombudsman, David Laverick, when she was told her husband’s enhanced death benefits had never been approved.
Mr Pollitt was director of operations at North American Bolts and Screws Europe, where he was a member of a scheme administered by Aon and managed by Unum Provident.
A death-in-service benefit of £150,000 was agreed by Unum based on the assumption that the original medical declaration remained unchanged.
In January 1999 Mr Pollitt received a wage rise that would have pushed his death benefits to £250,000, subject to medical underwriting.
But Laverick found that Unum had failed to notify Aon, NABS trustees or Mr Pollitt that it required a specific application form to make the additional cover valid. It also took no action to underwrite the requisite increase in cover until after Mr Pollitt died on June 19, 2000.
The ombudsman also noted that Aon took three months to forward Mr Pollitt’s salary details to the scheme manager.
On July 12, Aon informed the NABS trustees that Unum intended to pay Mrs Pollitt £184,000 in benefit but not the full cover of £250,000.
The NABS trustees defended the actions of the scheme manager. They said Mr Pollitt had the opportunity to apply for extended cover but failed to return documents to Aon in time.
But Laverick did not agree, saying that both Aon and Unum had acted in maladministration – Aon for delays in sending Mr Pollitt’s salary increase to Unum, and Unum for failing to contact the scheme trustees about the necessary underwriting for extra death benefits.
Laverick said Unum was the main party at fault and ordered it to pay Mrs Pollitt the sum of £66,000.
He added that Unum and Aon must also pay one half of the interest on the £66,000 sum and reimburse the claimant for one half of the professional costs she incurred in pursuing her complaint.
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