A police force has been told by the Pensions Ombudsman to refund an officer’s tax liabilities after failing to make him aware of the potential cost, claiming it had no legal obligation to offer advice.
Ombudsman Anthony Arter said the Police and Crime Commissioner of South Wales was wrong to not inform the complainant of the tax implications of re-employment on his retirement benefits.
Its failure to do so led to the complainant, a former police officer called John Cherry, incurring tax charges on his retirement benefits.
The legal representative of the PCC had said that neither the Police and Crime Commissioner for South Wales, nor the Chief Constable has any legal liability to advise individual officers and employees on their tax and pension liabilities.
They added: “Quite clearly it is for individuals to take their own independent financial or legal advice on such matters.”
But Mr Arter disagreed, saying this was a matter of providing information rather than advice.
He said: “I note the Commissioner’s comments that it was under no legal obligation to advise individual officers and employees on their tax and pension liabilities.
“I agree with this assertion, however I do not consider that this was a matter of an employer giving advice. This was about the provision of relevant information to employees about the impact on his or her benefits following re-employment.
“As a responsible employer the Commissioner had a duty of care to inform Mr Cherry of the tax implications of re-employment on his retirement benefits.”
Mr Cherry had been employed as a police officer with South Wales Police since February 1982.
He started taking his retirement benefits on 12 June 2011 but was re-employed by the PCC within one month of receiving his benefits.
Mr Arter told the PCC to pay Mr Cherry the tax liability which he paid to HM Revenue & Customs as a result of his loss of protected pension age.