It has for many years been generally accepted that statements made in a scheme booklet do not, of themselves, give rise to enforceable rights. A series of court decisions, the most important being the Court of Appeal in Steria v Hutchinson, have confirmed this.
The Pensions Ombudsman (the Ombudsman), going against the established position, has recently found that a statement in the scheme booklet did amount to an "enforceable promise". He found, in the case of Muller, that a statement in the scheme booklet confirming that a pension was "payable for life" was an enforceable promise that the pension would be paid.
As with all Ombudsman decisions, this is binding only between the complainant and respondent. The law as set out in Steria still stands and generally statements made in scheme booklets will not give rise to directly enforceable rights. However, this decision may indicate that the new Ombudsman (in post since June 2015) is willing to push the boundaries to achieve a just result for a 95-year-old member who would otherwise have been deprived of his pension.
It is also essential that booklets accurately reflect the benefits provided by the scheme. Certain information is required by law to be included, and material changes must be notified to members as soon as practicable. In view of the number of recent and impending changes (including the abolition of contracting-out and the new state pension), now is a good time to undertake a detailed review of the scheme booklet and other member literature.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
