UK - The TSW Group Pension scheme has been ordered to reinstate a widow's two-thirds pension after slashing it to protect its "finely balanced" funding status.
The case to the pensions ombudsman concerned Mrs Jenkin – whose husband was a director of the scheme sponsor, UK Safety. She complained that her £40,000 per year pension had been cut in July 2001, and claimed maladministration by the trustees of TSW.
Mrs Jenkin received benefits equal to two-thirds of her husband’s pension following his death.
Under the scheme rules, spouses are only entitled to 50% pension and in the absence of any documentation stating that Mrs Jenkin was entitled to a two-thirds pension, the scheme concluded that it could cut her pension.
But ombudsman David Laverick said handwritten notes on the scheme’s 1990 valuation and a 1984 benefits statement outlining how Mr Jenkin received a two-thirds spouse’s pension proved the trustees had prior knowledge of the arrangements and had unlawfully cut her benefits.
He said: “For at least 15 years before Mr Jenkin died, all parties proceeded on the understanding that Mrs Jenkin would receive a widow’s pension of two-thirds of his pension.
“It is not open to the company now to claim no knowledge of this and it should not be allowed to go back on this understanding.”
Laverick said the scheme must reinstate Mrs Jenkin’s two-thirds pension, pay her legal bills and give compensation equal to the total amount she missed out on because of the cuts made in 2001.
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