Browne case: Pensions Ombudsman rules on liability for unauthorised payment charges resulting from payment of a death benefit

The Pensions Ombudsman considered a situation where an unauthorised payment charge arose because a pension scheme had not made payment of a death benefit within two years of a member’s death. Where the scheme does not make sufficient efforts to identify a beneficiary and pay them the benefit due on the death of a member within two years, the Ombudsman has determined that it is the scheme and not the recipient who should bear the costs of the charges and surcharges.

Mr Brent, a member of the Wrigley’s Pension Plan, which is administered by Aon, died on 15 December 2005, leaving no wife or children.

Under the plan rules, on the death of a member, a lump-sum death benefit was payable at the trustees’ discretion to a person or persons listed in the plan rules. The list of people to whom the trustees could make the payment was broad and included, among others, spouses, most blood relations and any other person the trustees believed to be dependent on the member. The gross amount of the lump-sum death benefit in the case of Mr Brent was £42,165.34…

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