Horizon Pension Scheme · CAS-72336-P3R0

CAS-72336-P3R0

Ombudsman’s Determination Applicant Mr Y

Scheme Horizon Pension Scheme (the Capita Scheme)

Respondents CPLAS Trustees Limited (CPLAS Trustee) Capita plc (Capita)

Outcome

Complaint summary

Background information, including submissions from the parties and timeline of events

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“I authorise the above period of unpaid leave and that the Employers Contributions should be paid by Sx3.”

“Please deduct 2 days of unpaid each month for next 10 months starting in January 2008 and the last deduction in October 2008.”

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“I wish to pay a one off deduction of £2,883.35 in order to increase my Pensionable Service to 28 years [sic].”

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1Reg 7(1)(b) of The Electricity (Protected Persons) Pensions Regulations (Northern Ireland) 1992.

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“a fraction of a year’s Service may be rounded-up to a complete year of Pensionable Service, in which case an amount equal to the contributions that would have been paid by the Member during that year (less the contributions already paid for the part of the year) shall be deducted from the Member's benefits. This Rule 5.2 shall not apply to Members in Part-time Employment.”

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Summary of Mr Y’s additional comments

Summary of the CPLAS Trustee’s additional comments

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“The judge regarded the solution to the conundrum as lying in the interpretation of the old rule and the new rule as a blend. While I see the force of that approach, I do not agree with it. In my judgment the answer to the conundrum lies in the proviso and what it would have been understood to protect.”

2 The CPLAS Trustee noted that there were circumstances where a member would be better off under the Capita Rules (allowing for benefits to be rounded up to complete years of pensionable service with the payment of additional contributions) than under the NIESS rules. For example, if Mr Y had 28 years and 1 month of pensionable service without taking into account the 29 days of unpaid leave, his maximum pensionable service under the NIESS Rules would be 28 years, 1 month and 29 days, whilst under the Capita Rules it would be 29 years. Therefore, the CPLAS Trustee reserved its position on whether the protection afforded by the 1992 Regulations was not satisfied under the Capita Rules. 3 [2017] EWCA Civ 200

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4 PO-6444 and PO-6446

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Summary of Mr Y’s response to the Preliminary Decision

Ombudsman’s decision

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Camilla Barry

Deputy Pensions Ombudsman 21 July 2025

21 CAS-72336-P3R0 Appendix 1 Extract from a working consolidated version of the Northern Ireland Electricity Superannuation Scheme Trust Deed and Rules at 1 April 1992

“8. Cessation of membership

[…]

(F) A Contributor who, either in accordance with any career break scheme operated by the Employer or otherwise with the consent of the Principal Employer, agrees with the Employer to take unpaid leave from Service will, as from the date of commencement of that leave, be treated as a Contributor during the period of his leave notwithstanding that no contributions may be paid under Rule 10 during that period. In addition the Contributor will have the option of agreeing with the Committee before his unpaid leave commences to pay contributions to the Fund in accordance with Rule 10 either during the period of unpaid leave or at the end of that period and in either case based on his Salary at the date unpaid leave commences. If the Contributor exercises the option he will continue to accrue Pensionable Service during the period of unpaid leave. If the Contributor does not exercise the option his Pensionable Service will, on his return to paid employment with the Employer, be treated as continuous except that no account will be taken of the period of unpaid leave.”

22 CAS-72336-P3R0 Appendix 2 Extract from the Viridian Group Pension Scheme Rules dated 27 April 2009

“A. INTERPRETATION, STRUCTURE AND ALTERATION OF RULES […]

A3 Definitions […]

Part-time Employment means Employment under a contract of employment which requires an employee to work less than the number of hours in a standard full-time pay period as determined by the Principal Employer.

B. FOCUS SECTION […]

B1 Interpretation […]

Scale Pension means 1/60th of a Member's Final Salary multiplied by the period of his Pensionable Employment.

For this purpose:

(i) any period of the Member's Pensionable Employment which is Part-time Employment is multiplied by PT:FT; […]

where:

PT = the number of hours the Member is required to work under his contract of employment in each week during the period of his Part-time Employment;

FT = the number of hours in the standard full-time working week as determined for the Member by the Principal Employer. […]

B6 Retirement at or after Normal Pension Age

(1) On retirement from Employment at or after Normal Pension Age a Member is entitled to an immediate annual pension equal to his Scale Pension […]”

23 CAS-72336-P3R0 Appendix 3 Extracts from the Definitive Trust Deed and Rules of the Northgate Managed Services Pension Scheme dated 11 December 2012

“Schedule 2

Definitions

“Pensionable Service”

In respect of a Sx3 NIE Member, the number of years’ Service as an Active Member, together with any period added by the Trustees by reason of a transfer payment made to the Scheme in respect of him. […]

Schedule 3

General Rules

The General Rules apply to DB Members, Sx3 Members and Sx3 NIE members

1 Temporary Absence […]

1.3 Benefit entitlement during temporary absence

(a) Where a Member or his Employer where the Salary Sacrifice Arrangement applies, continues to pay contributions in accordance with Rule 3 (members contributions) of the DB Rules, the Sx3 Rules or the Sx3 NIE Rules, as appropriate, during his temporary absence (and based on his pensionable Salary or Pensionable Earnings, as appropriate, calculated on the day immediately preceding the commencement of his temporary absence), he shall continue to accrue benefits under the Scheme. Alternatively, the member may elect, with the consent of the Trustees, to reduce or suspend the payment of contributions payable under Rule 3 (member contributions) of the DB Rules, the Sx3 Rules or the Sx3 NIE Rules, as appropriate during the period of temporary absence. Where such contributions have been reduced or suspended, if the Trustees consent, the member (or his Employer where the Salary Sacrifice Arrangement applies) may make up any contributions to the Scheme at the end of his temporary absence. Where contributions have not been paid in full during the period the Trustees shall, on the advice of the Actuary, determine the benefits payable in respect of the period of temporary absence.”

24 CAS-72336-P3R0 Appendix 4 Extracts from the Definitive Trust Deed and Rules of the Capita Pension and Life Assurance Scheme dated 13 December 1996 and the SX3 NIE schedule of a Deed of Amendment and Adherence, dated 6 June 2014

Definitive Trust Deed and Rules of the Capita Pension and Life Assurance Scheme dated 13 December 1996:

“9 Temporary Absence from Work

General

9.1 A Member who is temporarily absent from Service will be treated as remaining in membership of the Plan for as long as he receives contractual earnings or statutory sick pay (as defined in the Social Security Contributions and Benefits Act 1992). In these circumstances, his Pensionable Service is treated as continuous.

9.2 If, during any temporary absence from Service, a Member does not receive contractual earnings or statutory sick pay (or, if he did, it has stopped) the Employer may decide to treat the Member as remaining in membership of the Plan and for a period as the Employer decides. The Employer will decide, with the agreement of the Trustees, the extent to which Pensionable Service will be treated as continuous.”

SX3 NIE schedule of a Deed of Amendment and Adherence, dated 6 June 2014:

“5.2 A fraction of a year's Service may be rounded-up to a complete year of Pensionable Service, in which case an amount equal to the contributions that would have been paid by the Member during that year (less the contributions already paid for the part of the year) shall be deducted from the Member's benefits. This Rule 5.2 shall not apply to Members in Part-time Employment.”

25 CAS-72336-P3R0 Appendix 5 Extracts from the Electricity (Protected Persons) Pensions Regulations (Northern Ireland) 1992

“Protected Employee

3 – (1) Subject to paragraph (2), this regulation applies to any person who –

(a) is an existing employee and immediately before the transfer date is a participant in the scheme; […]”

“Accrued pension rights

6 – […]

(4) If a protected person transfers or is transferred to a relevant scheme, and if a transfer payment is made to that scheme in respect of his accrued pension rights, the employer providing the scheme shall procure that the rules of that scheme will secure accrued pension rights which, on the basis of good actuarial practice, are at least equivalent in value to the accrued pension rights so transferred from the former scheme.

(5) Any new employer shall also procure that if the protected person notifies or is deemed to have notified his new employer in accordance with the terms (if any) of the relevant scheme provided by the new employer, and otherwise within two years of transferring to the new employer, that he desires to transfer his accrued pension rights to the relevant scheme provided by the new employer, he shall be entitled to transfer to that relevant scheme in accordance with paragraph (4) any accrued pension rights which are capable of being transferred.

(6) To the extent that an employer is unable to provide a relevant scheme which satisfies the requirements of paragraphs (4) and (5), he shall ensure that the accrued pension rights of each protected person in his employment are secured by other suitable means in accordance with regulation 9 to the same extent and at the same level as such rights would have been secured if he had provided a relevant scheme which satisfies those requirements.

Future pension rights

7 - (1) The future pension rights for the purposes of these Regulations are-

(a) the right of a protected employee to participate in a relevant scheme and (subject to paragraph (3)) -

(i) where that scheme is one of the Original Schemes, to accrue pension rights in accordance with the rules of that scheme;

26 CAS-72336-P3R0 (ii) where the relevant scheme is an alternative scheme, to accrue pension rights on the same basis as that applicable to other protected employees in that scheme;

[…]

(b) subject to paragraph (2), the right of a protected employee, who is participating in a relevant scheme and who changes employer to an employer who provides a relevant scheme in which no protected employees are then participating, to accrue pension rights which are no worse than transfer date rights.

[…]

Alternative Scheme

8 - (1) This regulation applies to any retirement benefits scheme which –

[…]

(e) provides future pension rights in accordance with regulation 7;”

“Provision of relevant scheme

13.- (1) This regulation applies where a protected employee changes his employer –

(a) in the circumstances referred to in regulation 11(5); or

(b) in any other circumstances not falling within regulation 11(1) or 12.

(2) If the new employer participates in a relevant scheme, he shall enable the protected employee to participate in that scheme and shall provide future pension rights for the protected employee in accordance with regulation 11(4).

(3) If his new employer does not participate in a relevant scheme, the new employer shall so far as reasonably practicable provide an alternative scheme.

(4) The future pension rights to be provided by any scheme required under this regulation shall be no worse than transfer date rights.”

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