Out-Law News 2 min. read

Employer must not rely blindly on medical advisers when deciding if an employee is eligible for ill-health benefits, ombudsman says

An employer cannot rely "blindly" on its medical advisers when deciding if an employee is eligible for an ill-health early retirement pension, the pensions watchdog has said.

The Deputy Pensions Ombudsman said in her determination (16-page / 111KB Word document) that Bridgend County Borough Council had not based its refusal to award employee Mr R Parry an ill-health pension on "appropriate evidence".

They had accepted a medical adviser's report without recognising that there were "sufficient anomalies" that should have caused them to ask more questions, she said.

Appropriate evidence is evidence that does not contain anomalies and is obtained from a medical adviser that the employer is sure understands its role, the Ombudsman said.

The employee was a member of the Local Government Pension Scheme (LGPS), which is one of the largest public-sector pension schemes in the UK. Membership of the LGPS is available to all local government employees in England and Wales.

The LGPS is governed by the LGPS Regulations, which state that an employing authority must award an ill-health pension if it decides to terminate its employee's employment because of ill health that has made him "permanently incapable" of performing his role and where the employee has a "reduced likelihood" of being able to work again before the normal retirement age.

Before making a decision on whether an employee is entitled to an ill-health pension under the Regulations, the authority must obtain a certificate from a medical practitioner confirming that he is "permanently incapable" of performing the role and whether his condition makes it unlikely he will ever work again. Enhanced benefits are available to employees who will likely never work again, or who will be unlikely to resume "gainful employment" in the next three years.

Parry went on long term sick leave in July 2007 suffering from back pain and depression. In July 2008 an occupational health physician with the Council's medical advisers reported that he should demonstrate improvement with "appropriate interventions". Parry was referred to an independent physician who "rejected" his application for ill-health retirement as he had not had a "full range of treatment". His employment was terminated in October 2008.

The Ombudsman said that it was for the Council, not the physician, to decide whether to terminate Parry's employment.

"[The Council] was required to obtain a certificate from an independent registered medical practitioner... before making its determination. However, the medical practitioner was being asked for an opinion; not to make the decision for [the Council]," she said.

"It is the case that [the Council] are not medical experts and, of course, neither am I. However, this does not mean that they should abrogate their responsibility for making a decision. [The Council] have a responsibility to base their decision on appropriate evidence and they cannot be sure that they have done this if they do not know whether their medical advisers understand their role," she said.

The Council should not have allowed their medical advisers to make the decision for it and should have referred back to them for more information, she said.

"[The doctor said] that he was unable to say that Mr Parry met the criteria for ill health retirement because he could not say that all treatment modalities had been tried. In fact, the advice needed to go further than it did and include a statement as to the likely efficacy of the treatment modalities [the doctor] considered remained to be tried," she said.

"[The Council] are entitled to rely on the professional advice that they receive, but should not do so blindly," she said.

The Council will now have to examine Parry's application again and pay him £400 for his distress and inconvenience, the Ombudsman said.

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