Pensions Ombudsman  

Court sides with ombudsman in death benefits case

Court sides with ombudsman in death benefits case

The High Court has dismissed an appeal against a Pension Ombudsman decision which ruled against a full payment of death benefits due to the pension holder, a doctor, being self-employed when she passed away.

A High Court judgment, published last month, disallowed an appeal of a decision made by the Pensions Ombudsman in January, which found the individual had died during deferred service rather than pensionable service.

Under NHS Pension Scheme rules when a person dies in deferred service the sum they are entitled to is three times the yearly rate of the member's preserved pension and the principal death benefit is half of the member’s preserved pension.

When a member dies in pensionable employment however, the lump sum payable is twice the member’s final year’s pensionable pay and the principal death benefit is half of the pension that would have been paid to the member if they had retired early through ill health.

Therefore the death benefit was considerably higher if it could be determined that the woman was in pensionable employment at the time of her death.

The case centered on Dr Helen Sanderson, a medical practitioner, who was a member of the NHS Pension Scheme and died suddenly on Christmas Eve in 2014.

Dr Sanderson’s husband, Carl Sanderson, argued that his wife died in pensionable service and was therefore entitled to a full payment but both the ombudsman and High Court argued against this.

At the time of her death, Dr Sanderson was self-employed and practised as a locum GP through company Greenfields Medical Chambers.

She had an ad hoc working pattern where she agreed in advance to work sessions at different GP practices.

She died on a day where she was not actually working but had worked on 15 out of the previous 23 days of December, including the day before she died.

Although it appeared that she was engaged in a regular pattern of work at the time of her death, she was self-employed and because she died on a day when she was in-between working, the small print of the NHS Pension Scheme meant she was not in pensionable employment at the time of her death.

The ombudsman also found that Dr Sanderson was not contributing to the scheme at the time of her death.

The ombudsman said: “It would be unusual for any pension scheme to which members were required to contribute, to provide death in service cover for a member during periods in respect of which the member made no contributions to the scheme.”

But Mr Sanderson argued at the time of his wife’s death she was booked to work in January and was therefore committed or obliged to work in the future under a contract of services by which she was then bound.

Despite this the High Court sided with the Pension Ombudsman’s decision and dismissed Mr Sanderson’s appeal.

Judge Justice Trower said: “In the present case, I do not consider that it is possible to say that Dr Sanderson was still engaged under a contract for services at the time of her death.