by Roderick
Ramage, solicitor, www.law-office.co.uk
first
published in New Law Journal (newlaw.journal@butterworths.co.uk) on 25 October
and 1 November 1996
DISCLAIMER
This
note and precedent are not advice to any person and may not be taken as a
definitive statement of the law in general or in any particular case. The author does not accept any responsability for anything that any person does or does
not do as a result of reading it.
The Pension Act
1995, s 50(1) enacts: "The trustees or managers of an occupational scheme
must secure that ... arrangements
... for the resolution of disagreements
between prescribed persons about matters in relation to the scheme are made and
implemented." Detailed provisions for this purpose are made by the
Occupational Pension Schemes (Internal Dispute Resolution Procedures) 1996 (SI
1996 1270), which with s 50 came into force on 6 April 1997. If the arrangements are not made or
implemented, any trustee or manager, who has failed to take reasonable steps to
comply with s 50(1) is liable to a civil penalty imposed by the Occupational
Pensions Regulatory Authority up to a maximum of £1,000 in the case of an
individual and £10,000 in other cases.
The only schemes, which are exempted, are schemes in which all members
are trustees or schemes with only one member.
Neither the statute
nor the regulations prescribe how the procedures are to be made or
implemented. They can be incorporated
into the body of the pension scheme's trust deed or rules, but this would
probably be cumbersome in many cases, because of the formality normally
required to alter the trust deed or rules both to incorporate the procedure and
to alter it if necessary. Moreover only
the trustees or managers are responsible for making and implementing the
procedures, whereas the power to alter the trust deed and rules is often vested
in the principal employer with the consent of the trustees.
The Occupational
Pension Schemes (Disclosure of Information) Regulations 1996 (SI 1996/1655) reg
4 requires the trustees to furnish in writing information specified in Schedule
1 to various persons, including members and prospective members of occupational
pension schemes. Regulation 8 contains a
similar obligation in respect of certain other schemes. Schedule 1, para 25 states: "What
procedures the scheme has for the internal resolution of disputes ... and the address and job title of the person
to be contacted in order to have recourse to these."
The following
specimen procedure (precedent B), which is based closely on the wording the
regulations, is intended to be used as a free standing document to be issued to
the members by a trustees' written announcement or in the scheme booklet. Precedent C is a short and simplified
alternative and, although it does not contain the details, the trustees or
managers must make arrangements which deal with all the matters in the
regulations (and precedent B). Precedent
A is an enabling clause for incorporation in the trust deed or rules.
xx The Trustees shall make and implement such
arrangements for the resolution of disagreements about the Scheme as are from
time to time prescribed by the [Pensions Statutes] and regulations made under
them.
[name]
Pension Scheme] ("the Scheme")
disputes resolution
procedure
This procedure is
issued by the Scheme's trustees under: section 50 of the Pensions Act 1995; the
Occupational Pensions Schemes (Internal Dispute Resolution Procedures)
Regulation 1996; and rule xx in the Scheme's trust deed and rules.
1
This is the procedure to resolve disagreements between the trustees of
the Scheme on the one hand and on the other hand any person in the following
categories: a member of the Scheme; a widow, widower or surviving dependent of
a member of the Scheme who has died; prospective members of the Scheme; persons
who cease to be within the above categories within six months immediately
before an application for a decision under this procedure; and any person
claiming to come within one of the above categories. In this procedure any person within any of
the above categories is referred to as "Complainant".
2
A Complainant may nominate a representative.
3
Applications by a Complainant for a decision must be made in writing,
signed by or on behalf of the Complainant and sent to the trustees at the
address at the bottom of this notice.
The application must contain: the full name, address, date of birth and
national insurance number of the Complainant and, where the Complainant is not
a member, similar particulars of the member and details of the relationship
between the Complainant and member; the full name and address of the
Complainant's representative and whether that address is the address for
service of any documents in connection with the disagreement; and a statement
as to the nature of the disagreement with sufficient details to show why the
Complainant is aggrieved.
4
The complaint will be considered by [one of the trustees to be nominated
by them (or) [name] (or) a committee by of a least two
trustees, of whom one is member nominated and the other is company nominated].
5
The decision will be notified to the Complainant in writing within two
months of the date on which the application was received. The notice of the decision will include: a statement
of the decision; a reference to any legislation relied upon; a reference to any
part of the Scheme rules relied on and, where discretion has been exercised, a
reference to any parts of the Scheme rules by which the discretion is
conferred; a reference to the Complainant's right to refer the disagreement for
reconsideration by the trustees.
6
If, in any case, a written notice of a decision is not given within the
two months, an interim reply will be sent to the Complainant setting out the
reasons for the delay and an expected date for issuing the decision.
7
At any time within six months from the date of the notice of a decision,
a Complainant may apply to the trustees to reconsider the disagreement. The application for reconsideration must be
made in the same way as an application under paragraph 3 above and in addition
to the matters to be stated under that paragraph must include: a copy of the
notice of the decision on which a reconsideration is requested; a statement of
the reasons why the Complainant is dissatisfied with the decision; and a
statement that the Complainant wishes the disagreement to be reconsidered by
the trustees of the Scheme.
8
The application for a reconsideration of a decision on a disagreement
will be considered by [all the trustees (or)
a committee consisting of the total number minus one of the trustees].
9
Within two months from the date on which the particulars of a reference
of reconsideration were received by the trustees, the trustees will issue to
the Complainant a written notice of their decision which will include: a
statement of the decision and explanation as to whether and, if so, to what
extent that decision either confirms or replaces the decision previously made;
a reference to any legislation relied on; a reference to any parts of the
Scheme rules relied on and, where discretion has been exercised, a reference to
any parts of the Scheme rules by which the discretion is conferred; a statement
that the Pensions Advisory Service is available to assist members and beneficiaries
of the Scheme in connection with difficulties which they have failed to resolve
with the Trustees and the address at which may be connected, and a statement
that the Pensions Ombudsman may investigate and determine any complaint or
dispute of fact or law in relation to the Scheme and the address at which he
may be contacted.
10
If, in any case, a written notice of decision is not given within the
two months, an interim reply will be sent to the complainant setting out the
reasons for the delay and an expected date for issuing the decision.
Dated 200
Signed
Trustee
Trustee
Any correspondence
or applications in connection with this procedure should be addressed to The
Trustees The [name] Pension Scheme at [address]
[name]
Pension Scheme] ("the Scheme")
disputes resolution
procedure
1
You may make a complaint if you are a member of the Scheme, a widow,
widower or dependant of a member, are eligible to
become a member or have been such a person within six months before your
complaint is made.
2
All complaints must be in writing and must include details of the
complaint and also your full name, address, date of birth and national
insurance number. It will be dealt with
by [name], who, if possible, will give you a written decision within two
months. If the decision cannot be given
with two months you will be told the reason for the delay and the expected date
of the decision.
3
If you do not agree with the decision, you may, within six months of the
decision, apply to the trustees to reconsider it and the trustees will, if
possible, give you a written decision within two months.
4
If you still do not agree with the decision, you will be entitled to ask
the Pensions Advisory Service to assist you or to apply to the Pensions
Ombudsman to investigate your compliant.
Any correspondence
or applications in connection with this procedure should be addressed to
The Trustees
The [name]
Pension Scheme
[address]
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