Anne-Marie Winton comments in Professional Pensions on the Ombudsman ruling in the Kingfisher Pension Scheme case that could set a major precedent for future cases. In the case, the ruling stated that Kingfisher trustees were correct to reject Mrs. X’s claim to two thirds of DB pension, highlighting the need for trustees to read the fine print and utilize evidence to support claims of broken promises.

Anne Marie puts the determination in context of the IBM United Kingdom Holdings Ltd and another v Dalgleish and others case which is currently in the Court of Appeal and yet to be concluded. The company is fighting the accusation it breached its duty of good faith to members in closing its DB schemes.
Winton says: “We always did think whether this very large IBM case would open the floodgates to people saying ‘My employer promised me something and now they are going back on it’. Mrs X was saying: ‘I was pretty sure I was promised something valuable and you guys have taken it away’.”

“[But] the ombudsman is saying: ‘actually not really, you have probably been given an incorrect steer’. But I think it fundamentally shows what was promised was no longer applicable to that person and possibly was never going to be applicable’.”

Any pensions guarantee if proven legitimate by successful appeal to the ombudsman could be worth many hundreds of thousands of pounds and “could be blisteringly expensive if it stood the test of time,” adds Winton.

The mention of other possible claimants on the first page of the Kingfisher determination points to the wider scope of the ombudsman’s thinking. “It really stands out as unusual that someone has made the effort of going to the ombudsman and potentially 100 people behind the scenes are also thinking the same,” Winton continues.

View the full article in Professional Pensions here.