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Legal and General Assurance Society v Pensions Ombudsman 2

United Kingdom
03/11/1999
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Reference: (2000) OPLR 153

The trustees of a pension scheme entered into an insurance contract as a long term investment and administration vehicle. When the contract was discontinued Legal and General calculated a cash sum surrender payment. The principal employer and a beneficiary complained to the Pensions Ombudsman about the unfairness of the surrender terms and Legal and General's refusal to disclose how the sum was calculated.

The High Court found the Ombudsman could not make determinations on the fairness of the contract, he could only investigate maladministration. This was a commercial contract and the merits of its terms could not constitute any act of administration or management. However, calculating and paying the surrender value was an act of management and so failure to disclose the calculation could constitute maladministration. The insurer was required to disclose the basis of the terms of discrimination and the basis of the surrender value calculation.

The Pensions Ombudsman had the right to look at the complaint by the trustees, even though it was ordinarily out of time. The Court also decided there was no right under legislation for a party to appeal from a preliminary or interim determination of the Ombudsman, only from a final determination.

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