ADJUDICATION OFFICER RECOMMENDATION
Adjudication Reference: ADJ-00007860
Parties:
Anonymised Parties
An Employee
An Education Body
Representatives
SIPTU
Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969
CA-00010454-001
Date of Adjudication Hearing: 03/08/2017
Workplace Relations Commission Adjudication Officer: Pat Brady
Procedure:
In accordance with Section 13 of the Industrial Relations Acts 1969following the referral of the dispute to me by the Director General, I inquired into the dispute and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the dispute.
Background:
In 2004 the complainant bought additional ‘notional’ years for pension purposes from her then employer. (She remains in the same employment but the entity employing her has changed).
She was advised that she could purchase seventeen additional years and she did so, by means of regular deductions from her salary and as a percentage of her salary.
In 2014 when she was considering retirement it emerged that there had been an error and that she should have been entitled only to an additional nine years.
Summary of Complainant’s Case:
In 2004 the complainant engaged with her then employer as part of her retirement planning.
She sought details from the pensions department as to what additional ‘service’ she might purchase and was given a written quotation. She and her husband met the Pensions Department manager who confirmed the figures she had been given and advised her to proceed. She did so.
In the ensuing years she received annual pension statements from her employer which reflected the position as she understood it.
In late 2014 she began to plan for retirement to take effect in November 2016. Her husband was planning to retire at the same time.
Her employer (now a different entity to that which implemented the initial deal) recommended that she meet their pension advisors, and in order to prepare for this meeting she sought certain paperwork only for it to emerge that there had been an error, and that the maximum number of years she should have been entitled to purchase in 2004 was significantly lower; nine instead of seventeen.
On the one hand this meant that she had overpaid by some €34,950 (which was refunded with appropriate deductions). It also meant that the pension lump sum she had been expecting to receive would be €32,774 instead of €43,977, and her annual pension €4,370 instead of €5,863.
She appealed unsuccessfully, although she did get a small award from the Pensions Ombudsman of €1,346.
The outcome of this error was that the complainant had to postpone her retirement and continues to work. She submits that the respondent should honour the original agreement and pay her the pension to which she contributed.
Summary of Respondent’s Case:
The facts outlined above are not disputed by the respondent.
It is accepted that an error was made in 2004 but that given the statutory basis of the superannuation schemes it had no discretion but to correct it.
The scheme is explicit and the respondent cannot interpret the regulations in such a way as to calculate pension entitlement which is not permitted by the scheme.
The scheme is also part of the wider public service scheme and therefore it is not open to the current respondent to propose any amendment to it.
Findings and Conclusions:
The facts in this case are as set out above. It is a most unfortunate case.
I accept that it is not open to me to make a recommendation which would require the respondent to act contrary to the provisions of a statutory superannuation scheme.
Complaints under the Industrial Relations Acts went, for many years up until the establishment of the Workplace Relations Commission, to the Rights Commissioner Service.
While in recent years the Rights Commissioners acquired additional jurisdiction for a number of employment statutes their original role in the resolution and determination of ‘rights disputes’, and their success and expertise in finding equitable solutions was of great value to employers and workers, and generally widely appreciated.
These fell into the area of generalised breaches of rights that are not covered by the specific employment statutes. It provides a court of ‘fair play’ and an opportunity to undo inequitable treatment of one sort or another for which a remedy cannot be found elsewhere.
That is the ‘jurisdiction’ and tradition under which this current case falls to be determined.
In this case the complainant entered into an arrangement on the basis of the advice and recommendations of the professional pensions’ manager in her then employment.
She proceeded for ten years; planning with her husband for her retirement. She did so reassured by the arrival of annual pension statements which offered no indication that the arrangement she had entered into was in any doubt.
She had these plans dashed by the revelation of the true positon.
One often hears reference to a person being ‘badly advised’ in respect of investments, or such like which do not prosper as anticipated, or where other poor judgement has been manifested.
This is not such a case of being badly advised or of poor judgement.
The complainant was misled and given totally erroneous information about her entitlement to purchase additional notional years by someone employed to be an expert in the scheme, and who, according to her submission recommended she proceed with it.
I do not fault the respondent for its actions in seeking to correct the error but it inherits, and must acknowledge the seriousness of the original and ongoing error (for ten years), and also its impact on the complainant when she learned of it and of its implication for her retirement plans.
These are the two factors I take into account in making my recommendation.
In respect of the first, it was an error of quite significant proportions.
It was not a minor miscalculation of wages or other payments, nor was it of short duration; some error that was spotted a few weeks or months after it was made.
That no-one in the respondent’s pension department, or whoever had responsibility for checking the annual statements which issued to the complainant sought to ensure that they were soundly based at any time in the ten year period is incredible almost beyond words.
The respondent is a large organisation with sufficient resources to ensure that the information it was sending the complainant was accurate and reliable in respect of such an important matter.
It cannot expect to escape accountability for its culpability and the impact of its omission or error on the complainant and the distress and disappointment which resulted.
Turning then to that impact on the complainant, it takes little imagination, insight or empathy to picture the scene following the arrival of this news. A process of planning for retirement, one of the big milestones in a person’s working life, which had begun two years earlier was brought to a shuddering halt.
The complainant continues to work over two years later because she could not afford to retire. Her submission referred to the ‘disappointment and hardship’ she and her family have had to endure
I find that she is entitled to compensation for this ‘disappointment and hardship’, (which latter word I also use in its more colloquial sense).
Accordingly, and for these reasons I assess the treatment of, and impact on the complainant as being on the extreme end of the spectrum.
It represents a serious breach of her entitlement to fair treatment at the hands of her employer and she has the right to a remedy that is both equitable and proportionate to the distress she has experienced.
A clear liability falls on the respondent to do so.
These considerations, outlined in the reasoning above are reflected in the level of my recommendation.
Decision:
Section 13 of the Industrial Relations Acts, 1969 requires that I make a recommendation in relation to the dispute.
For the reasons set out above, and solely in respect of the distress caused to the complainant I uphold complaint CA-00010454-001 and recommend a compensatory payment to the complainant of €10,000.
Dated: 21st August 2017
Workplace Relations Commission Adjudication Officer: Pat Brady
Loss of pension entitlement, badly advised, compensation.