Government Pension Scheme (PO-3753)

Complaint summary

Ms P Lettman has complained about the death benefits payable from the LGPS in respect of her late son, Mr K R Lettman, being subject to a 40% tax charge as an unauthorised payment, due to not settling the death benefit within two years.

Summary of the Ombudsman’s Determination and reasons

The complaint should be upheld against LBHF and to a lesser extent LPFA because:

• LBHF and LPFA ought to have been aware of the two-year time limit for making the payment of the death grant;
• LPFA should have informed Ms P Lettman of the two-year time limit and the tax consequences if the death grant was not paid within this timescale;
• although the papers were provided at the 11th hour, there was still 13 working days to settle the death grant, and this should have been sufficient time to process the papers and arrange for the payment by cheque.