Dr Y (CAS-37814-G1K9) – administrator not responsible for member’s decision to opt out following letter about lifetime allowance changes

TPO has held that it is the member’s responsibility to establish his LTA position.


Dr Y was a member of the NHS Superannuation Scheme (Scotland) (the “Scheme”). The Scheme was administered by the Scottish Public Pensions Agency (“SPPA”).

LTA reduction notice

On 8 January 2014, SPPA wrote to inform Dr Y that the LTA would be reduced from £1.5 million to £1.25 million from April 2014. The letter stated: “The purpose of this letter is to give you an early warning that, based on the information we currently hold, we consider that you may be affected by the reduced LTA.”

On 10 January 2014, Dr Y wrote to SPPA to request information about his Scheme contributions, the value of his benefits and his LTA position. Chasing a response, Dr Y made clear that he wanted to be able to understand how close he was to exceeding the LTA so that he could consider whether to apply for FP14.

Dr Y subsequently received two pension estimates from SPPA illustrating:

  • Total estimated pension benefits valued at approximately £703,000 as at March 2014, representing 46.88% of the then LTA of £1.5 million.
  • Total estimated pension benefits valued at approximately £733,000 as at July 2014, representing 58.64% of the then LTA of £1.25 million.

On 17 February 2016, SPPA wrote to inform Dr Y that the LTA would be further reduced, from £1.25 million to £1 million from April 2016 and, again, set out that “based on the information it held about Dr Y’s benefit entitlement from the Scheme, it considered that he may be affected by this change to the LTA” (the “February 2016 Letter”). It also explained that it may be possible to apply for FP 2016, if the value of the benefits already accrued was in excess of £1 million.

In response to this letter, Dr Y decided to opt out of the Scheme by ceasing his contributions from 31 March 2016.

Following further pension statements in June and August 2017, on 11 August 2017, Dr Y wrote to SPPA stating that he had stopped his contributions to the Scheme to avoid breaching the LTA. However, after subsequently learning that the value of his benefits was just £634,256.35 as at June 2017, he wanted to re-start his contributions. Dr Y also pointed out that his Scheme record did not show contributions from one of his NHS employers.

Incorrect employment records

On 20 June 2018, SPPA wrote to Dr Y to explain that it had identified an issue with the information received by one of Dr Y’s NHS employers, arising from an error in his employment status. This error affected the calculation of his benefits and meant that his previous benefit estimates had been incorrect.

Dr Y’s complaint

On 20 November 2019, Dr Y registered a complaint under the Scheme’s IDRP stating he had paused his contributions to the Scheme, because he was led to believe by SPPA that he was approaching the LTA. He subsequently learned that the value of his benefits was unlikely to breach the LTA, so he opted back into the Scheme. However, he said that he would not have opted out if he had been aware of his true LTA position from the outset. He asserted that he had missed potential contributions to the Scheme during this time.

Dr Y’s complaint was considered by one of TPO’s Adjudicators, who concluded there was some maladministration by SPPA, although not in respect of the LTA communications, but that Dr Y had not suffered a financial loss. Dr Y did not accept the Adjudicator’s Opinion and the complaint was passed to TPO.


Decision to opt out of the Scheme

Dr Y indicated that his decision to opt out of the Scheme was based on information contained within the February 2016 letter. TPO held that, although this letter suggested that Dr Y may have been close to the LTA, the letter did not provide any incorrect information (i.e. it did not say that Dr Y was close to, or in excess of, the LTA), nor did it recommend he take any specific action. It was Dr Y’s responsibility to determine his LTA position, noting that this would have included consideration of any benefits he held outside of the Scheme. Therefore, SPPA is not responsible for the financial consequences of Dr Y’s decision to opt out of the Scheme.

Incorrect pension estimates and Dr Y’s decision to retire

TPO held that SPPA was not responsible for the incorrect estimates that Dr Y received before the identification of the error in his employment status noting that SPPA is reliant on NHS employers to submit accurate member information for it to calculate pension entitlement and that it is not reasonable to expect that SPPA should have known the information submitted by his employer was incorrect.

However, the incorrect pension estimate which was sent in September 2018, after the error in his employment status had been identified, did amount to maladministration.


TPO directed SPPA to pay £1000 to Dr Y for the distress and inconvenience which had been caused by their maladministration.


With the imminent removal of the LTA in April 2024 (see our Alert), this is a timely reminder that it is up to individuals to establish their LTA position.

This decision also highlights that, whilst it may be appropriate to provide information about changes in the law which might affect members (without giving members financial advice), it is prudent to avoid setting out exactly how the change would affect an individual’s benefits. It would then be the member’s responsibility to determine the impact of the change on their own benefits.

Finally, this decision will bring some comfort to administrators, since TPO concluded that the administrator was not responsible for the incorrect benefit estimates since they were a result of inaccurate information provided by the employer.