Principal Civil Service Pension Scheme (PO-9996)

Ombudsman’s Determination

Outcome

I do not uphold Mrs N’s complaint and no further action is required by MyCSP and TPSE.

My reasons for reaching this decision are explained in more detail below.

Complaint summary

Mrs N’s complaint against MyCSP and TPSE is that the Added Pension calculator on the Civil Service website provided her with incorrect pension quotes in 2011 and 2012.

Mrs N says that in November 2011 she used the Added Pension calculator to calculate the lump sum she had to pay to secure an additional pension of £1,250, per annum. The Added Pension calculator showed a lump sum figure of £16,175. She was subsequently told by MyCSP that she had to pay a lump sum of £16,282.63 to secure an additional pension of £1,256.63 per annum.

Mrs N says that in December 2012, the Added Pension calculator showed that she would receive an additional pension of £1,479.00 per annum based on a lump sum payment of £20,000. She was subsequently told that the correct pension figure was £1,442.31 per annum.

Mrs N asserts that the respondents and the Scheme actuary should provide complete answers to all of the outstanding queries she raised. Should those answers indicate that the additional pensions quoted were incorrectly calculated then she should receive the correct amounts. Specifically, she wants a complete technical specification of the factors used to calculate the additional pensions. She says the respondents have not explained how the assumptions appropriate for the lump sum payments she made in 2011 and 2012 were set. The 2007 valuation report which TPSE referred to in their letter to her of 22 June 2015, assumes a pensions increase in line with RPI, but the rate of increase is now CPI.

In Mrs N’s letter to this office of 1 April 2016, she says,

“ When I purchased an added pension of £1,250 per annum in November 2011 it is true that I was advised that I had to pay £16,282.63 and that I could have decided not to proceed. However, had I delayed pending resolution of my complaint there would probably have been … a period…during which I would not have made a payment. During that time the rate of conversion of lump sum for pension would probably have deteriorated. Furthermore…had I not made a payment by 5 April 2012 that opportunity would have been lost forever.

When I made a payment of £20,000 in November 2012 I was not advised in advance of the amount of pension it would secure, and I was not offered the opportunity to have my money back after the figure was calculated…

…The rates of conversion of lump sum for pension are specified in legislation …I therefore decided to go ahead with both payments on the basis that any errors would be corrected in due course…”