Deirdre contributed 3% of her salary to a superannuation scheme that was administered by a professional trustee. Her employer also contributed 3%, bringing the total contribution to 6%.
In 2016, Deirdre decided to increase her contribution to the scheme. She wanted an extra 6% to be deducted from her salary. She filled in the appropriate form. In the box beside the sentence authorising her employer to deduct her contribution from her pay, she wrote ‘6%’.
When an administrator at the trustee’s office saw the form, he became confused. He noted that Deirdre’s total contribution to the scheme was already 6% of Deirdre’s salary. He assumed that the form was a duplicate of Deirdre’s original instruction, so thought that he did not need to do anything. The administrator did not contact Deirdre to clarify what she wanted, nor did he take any further action.
A year later, Deirdre discovered that the additional 6% was not being deducted from her salary. She complained to the trustee. The trustee offered to compensate Deirdre for the interest she would have earned, provided she topped up her account with a back payment of the additional 6% contribution.
Deirdre was not happy with the trustee’s offer. She considered that the form was so ambiguous, there was no way to give clear instructions to the trustee. For that reason, she wanted the trustee to pay the additional 6%, as well as the interest. When the trustee declined, she complained to FSCL.
We reviewed the form and noted that it could have been clearer. However, we also considered that the trustee’s settlement offer was reasonable because it put Deirdre back in the position she would have been in had her instruction been actioned.
We negotiated a settlement between Deirdre and the trustee. Deirdre topped up her account with a back payment, and the trustee paid the interest. The trustee also paid Deirdre a small amount of compensation for inconvenience, due to its failure to action her request. To ensure this situation could not happen again, the trustee agreed to change the form to remove any ambiguity. It also changed its procedures for administrators.
Key insight for participants
‘It’s the putting right that counts’ – but the law doesn’t require you to do more than put the person back in the position they would have been in if you had not made the error.