Hogan Lovells

Key Dates

Determination issued on 29 June 2018.


The Pensions Ombudsman has upheld a complaint that the administrator, who knew that the deferred member was terminally ill, should have told the member that his early retirement benefits and associated widow's pension were only available if put in payment during his lifetime.  The trustees were directed to make good the tax free lump sum and widow's pension as if the member had started to draw benefits before his death.


Mr R was diagnosed with terminal cancer in November 2012 and died in August 2016.  In April 2016, he telephoned the then administrator of his pension scheme to discuss his options under the scheme.  The administrator accepted that during this conversation Mr R informed it that he was terminally ill.

A few days after the conversation, the administrator sent Mr R a letter outlining two options for early retirement from deferment: both options included a cash lump sum, a pension for Mr R and a widow's pension of £7,000 per year.  Option 2 would have provided a greater lump sum and a reduced pension for Mr R but the same widow's pension.  The letter also mentioned that if Mr R's life expectancy was less than 12 months then the benefits could potentially be paid entirely as a lump sum.

Mr R died without exercising either option to take his deferred benefit.  Mrs R was informed of the benefits payable on death in deferment: a widow's pension of £5,500 and no lump sum.

Mrs R's complaint through the scheme's internal dispute resolution procedure was rejected and she complained to the Pensions Ombudsman.

Ombudsman's determination

The Ombudsman held the following.

The administrator, on behalf of the trustees, was on notice that Mr R's condition was terminal and they had an obligation to take this into account when providing information.  The Ombudsman could not conclude (as argued by the trustees) that Mr had only asked about his early retirement options in the telephone call.


The trustees were directed to:

Date Accessed: 28/05/2022