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Mr R was an employee of AstraZeneca PLC and a member of the employer’s pension scheme when the employer announced proposed scheme changes in 2010, giving members two options:
The employer’s guide for members on the changes stated that “early retirement terms may be less favourable for deferred members than employee members, if they leave in certain circumstances” which included an employee leaving service of their own choice or at the employer’s request (e.g. redundancy).
Later in 2010 in a letter to deferred members, AstraZeneca agreed to extend the early retirement terms to include redundancy from employment with AstraZeneca. No assurances were given in relation to TUPE transfers.
Mr R chose to become a deferred member. In 2016, his employment was transferred to Avara under TUPE and he was told that an unreduced early retirement pension he had sought was not available to him. The rules of the scheme required the member to have left service at the request of his employer.
The Ombudsman considered two questions:
While “leaving service at the request of the employer” was open to interpretation, there was a 2003 Court of Appeal precedent. In AGCO Limited v Massey Ferguson Works Pension Trust it was held that the phrase meant that the employer has asked the employee to leave service and the employee had the right to refuse the request. The TUPE transfer did not give Mr R the choice to remain in service with AstraZeneca, and therefore the scheme rules did not allow him to receive an unreduced early retirement pension.
As Mr R left employment as a result of the operation of law under TUPE, rather than as a result of a “request” from his employer, the Ombudsman determined that his application should not succeed.
The Ombudsman’s determination can be read here.
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