Loss of Pension Rights

We are able to provide an assessment of loss of pension rights for use in legal proceedings and employment tribunals. An individual may lose pension rights following the action of others, for example, through unfair dismissal or through an accident (whether at work or otherwise). 

In such circumstances, we can place an objective measure on the loss in pension rights that has been incurred, and we can act for both the individual affected or the organisation against which any such claim is made. Our advice can then serve as a basis for settlement for tribunals or other such proceedings.

We have significant experience of both the calculations that are required in respect of such cases, and also of the legal or quasi-legal process that these involve. Our reports are reflective of recognised methods and approaches to the valuation of pension losses and are written in a form that is easy to understand.

We can provide advice in respect of redress for pension losses incurred via the “pension mis-selling” scandal of the 1980s/90s in cases where the Financial Ombudsman has ruled that the time bar is not to be applied. Such calculations are performed in line with the terms set by the Financial Ombudsman for such cases.

The services that we can provide in this area are as follows:
  • Detailed review of documentation pertaining to individual’s pension rights
  • Analysis of loss of pension rights incurred by the individual (whether on behalf of the individual or organisation against whom the claim is made) performed by a qualified Fellow of the Institute & Faculty of Actuaries
  • Review of any reports / analysis produced by other advisers for “the other side” in the case
  • Preparation of schedule of agreements and disagreements in cooperation with other such advisers
  • Conference calls / in-person meetings with the parties and representatives
  • Attendance at court proceedings / employment tribunals

Case studies

Below are two examples of where we were able to assist with the valuation of losses of pension rights. Names and identifying details (pension schemes, amounts etc) have been changed in the interests of client confidentiality.


Case 1
Loss of pension rights following an accident

Mr Person was employed as a supermarket manager. In 2015, when he was aged 50, he was involved in a car accident which unfortunately led to his being unable to work for some months and then only being able to work c. 40–60% of his former hours. On account of his now receiving a reduced salary—expected to be for the rest of his working life—Mr Person had incurred a loss of pension rights which formed part of his claim against the other driver’s insurer.  His solicitor instructed us to prepare an actuarial report to quantify such a loss.

We established that Mr Person was a member of his employer’s defined contribution pension scheme, and has lost pension rights to the extent that salary-related employer contributions are now lower than once they were. We determined that from the accident to the date of calculation, he had lost c. £5,000 of contributions, and we showed that future losses might be £20,000 to £25,000, depending upon the actual hours that he might now be expected to work until retirement.

In our analysis, we showed how such a calculation is performed, with particular reference to the published guidance that is relied upon by Tribunals in such cases. We also drew to the attention of Mr Person and his solicitor the likely points of challenge by the other driver’s insurer and its own expert, being Mr Person’s expected future working plans both before and after the accident, the rate that his pre-accident salary may have increased and allowances to be made for overtime, bonuses etc.


Case 2
loss of pension rights following unfair dismissal

Mrs Other was employed by a local council in southern England, and had accrued pension benefits in the Local Government Pension Scheme (LGPS), a defined benefit arrangement that operates through a number of county-wide funds. She was dismissed from her employment in 2020, aged 40, and made a claim for unfair dismissal. Her solicitor instructed us to prepare an actuarial report on this matter.

It is important to note at this point that i) we do not know the background to the termination of Mrs Other’s employment, nor ii) whether her claim is deemed to be valid.  For the purposes of the calculations that we perform, such matters are irrelevant: we seek only to provide advice on the actuarial loss that has been incurred with regard to her pension rights.

Upon inspection of the data, we established that through the termination of her employment, Mrs Other had lost pension rights in the LGPS. In particular:

We determined that the loss of the salary linkage on the legacy pension benefits was worth c. £10,000 and the loss of the right to accrue further pension benefits was worth c. £170,000. These calculations were based upon certain assumptions around the expected rate of increase of Mrs Other’s salary and her likelihood of remaining in her current post, but for the incident in question. However, we set out details of how the calculations might change were other assumptions to be adopted.

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