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Annual Report of the Ombudsman 2003

Chapter 4 - Compensation for Loss of Purchasing Power to Pensioners in Superannuation Schemes

Compensation for Loss of Purchasing Power to Pensioners in Superannuation Schemes

The Ombudsman Act, 1980 precludes me from investigating complaints which relate to or affect the terms or conditions of employment including those under which superannuation benefits are payable. However, when the core of a complaint does not relate to such terms and conditions, but rather relates to the administration of a scheme e.g. the refusal of a public body to mitigate the adverse effect of an administrative oversight, then my jurisdiction applies in the normal way.

I received complaints from three pensioners who had been health board employees or whose spouses had been employees. They complained that the pensions or lump sums which they had received on retirement some years previously had been incorrectly calculated. The Boards in question had subsequently acknowledged the errors made, and adjusted the pension and lump sum payments to the correct level. Each person had received a lump sum payment to cover relevant arrears. However, the Boards had declined to pay compensation for the loss of purchasing power in the intervening periods. They did not consider that they had authority to pay such compensation under the relevant superannuation legislation.

I felt that it is was unfair to penalise the pensioners for errors made by the Boards. I also felt that the decisions not to compensate in these types of cases were contrary to fair and sound administration. I pursued the issue with the Department of Health and Children. In line with the principle of redress as articulated by my predecessor and in the interests of good administrative practice, the Department put a scheme in place which would allow health boards to make compensatory payments with reference to the Consumer Price Index, on an ex gratia basis, where refunds or payments of benefits have been delayed or withheld over an extended period of time as a result of error, misinterpretation, oversight or other similar action, when operating the superannuation schemes.

I would like to take this opportunity to acknowledge and commend the actions of the Department in this regard. I am pleased to note that the three pensioners received compensation in accordance with the Department's guidelines which issued to all health boards in December 2003.

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