Citigroup Global Markets Ltd Pension & Life Assurance Scheme (PO-10421)

Ombudsman’s Determination

Outcome

I do not uphold Mr T’s complaint.

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

Complaint summary

Mr T is complaining that the Trustee has amended the Late Retirement Factors (LRF), applied to his pension benefits, contrary to an agreement with Salomon Brothers in 1990 (the Letter). The Letter promised that Mr T’s pension benefits would be underpinned in relation to his former pension scheme with Merrill Lynch (ML). The letter stated:

“You will join the Scheme on the day you join SBIL with a normal retiring age of 65. The benefits expressed above may (and, currently, would) exceed the benefits payable under the rules of the Scheme which are now subject to the “cap” for new employees. SBIL will provide for any difference in benefit to be paid to you outside the Scheme and insofar as such provision is made via a funded unapproved pension arrangement the full cost (including any liability to tax) will be met by SBIL…For the avoidance of doubt we confirm that the undertaking regarding your pension and life assurance benefits will disregard any limit as to benefits imposed by UK Inland Revenue and furthermore we confirm that the rules of the Scheme will not be amended to your detriment without your consent in writing”.

Mr T states that the Letter promised the following:

• he would not be subject to any detrimental changes in the rules of the Scheme;
• he would not be worse off joining Salomon Brothers than if he had stayed at ML.

Mr T says he is unhappy that the Trustee is now refusing to honour these undertakings. He states that as a result of this, his pension benefits have been calculated to his detriment by applying a lower LRF of 6.75% instead of 7.5%.