Members at Boots who have pension benefits in the Boots Pension Scheme will be aware that the scheme is now subject to a buy-in by Legal and General.
As a result of this, the company is now claiming that an unreduced pension from age 60 was not guaranteed under the scheme rules and, as a discretionary benefit, has ended with the buy-in. The PDA has been investigating the claims and has now sent the below mailing to members at Boots. More information and advice will follow shortly.
The PDA strongly recommends that members wait for its next communications before taking any action in relation to lodging complaints either internally with Boots or to the Pensions Ombudsman.
Dear colleagues,
This email has been sent to all PDA members our records show as working for Boots. However, the information contained in this email is only for those who have pension benefits in the Boots Pension Scheme. This is the final salary scheme which closed in 2010 to new entrants and future accrual and is now subject to a buy in by Legal and General and subsequent winding up. For all other members in receipt of this email in other Boots pension schemes or in no pension scheme they should treat this email as for information only and take no action on it.
We thank members for their patience while we have investigated the company’s claim that an unreduced pension from age 60 was not guaranteed under the scheme rules and therefore, as a discretionary benefit, this has ended with the buy in.
It is not unusual for closed final salary schemes to be wound up and benefits secured through an insurance policy. This does give those with benefits remaining in the scheme an increased level of security. However, when a scheme is wound up only the benefits guaranteed under the rules are secured. Any benefits provided at the discretion of the trustees are not protected unless they are written into the rules at the point at which the winding up process and buy in start.
The announcement to members suggests that there were two significant benefits that were discretionary.
One is the payment of pensions to dependents of scheme members should the scheme member die. It goes without saying that this is an essential part of any pension scheme and it is very unusual to find such benefits not secured under the rules. Nevertheless, we understand the trustees have amended the rules to include these benefits, which will now be guaranteed as part of the buy in. We believe this was the correct course of action for the trustees to take.
However, it is the second of these ‘discretionary’ benefits that is understandably causing members considerable concern. The ability to take an unreduced pension from age 60 is also being described as discretionary. This has not been secured through a change in the rules and has therefore ceased with immediate effect.
We have been assessing several pieces of information to test whether it is accurate to describe the payment of an unreduced pension from age 60 as discretionary. Again, we are grateful for members’ patience while we do this and also thank those members who have provided information to help us make our assessment.
As a result of our analysis, we believe the scheme rules do describe normal retirement age as 65. The Trust Deed and Rules will always be considered the definitive document when determining the benefits payable under any pension scheme. There is every likelihood therefore that the company and the trustees will rely on this to support their view that the unreduced pension at 60 was discretionary.
However, we have also seen individual benefit statements from those members kind enough to send them to us. There is no doubt these communicate that a full pension is payable at 60. There is no mention of this only being at the discretion of the trustees and, crucially, no mention that individuals should not rely on this still being in place when they retire. Had benefit statements included words to this effect then we would reluctantly have concluded nothing could be done to protect the unreduced pension at 60. But as far as we have seen they do not.
Our considered view based, and this must be stressed, on the information we have seen to date is that there is potentially an issue for The Pensions Ombudsman to resolve.
Members can find more details of the role of the Ombudsman here but should not make any claim yet. The Ombudsman is the route to a legally binding decision in disputes over pensions, rather than the Employment Tribunal system.
The first step, however, is to use the internal disputes procedure. This is a requirement of the Ombudsman before they can take up cases.
We still have some further investigations to carry out and other documents to obtain and check. We will, however, update members towards the end of next week confirming whether or not evidence has emerged that would make the company case stronger. In the absence of that, we will advise members on the steps to take to use the disputes procedure prior to lodging complaints with the Ombudsman.
It is very important that members wait for our next email before taking any action in relation to lodging complaints either internally within Boots or to the Ombudsman.
Kind regards,
Paul Moloney
PDA Union National Officer
Learn more
- PDA updates salary ready reckoner for Boots pharmacists to show FY24 rates
- Boots Pay Position Statement
- Boots Newsletter – November 2023
- PDA Reps Network in Boots
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