And The Law Says

How to calculate pension loss on termination of employment

December 10, 2014


The Court of Appeal has recently overturned an EAT decision regarding the calculation of pension loss on termination of employment (Griffin V Plymouth Hospital NHS Trust). The employee had brought a successful constructive unfair dismissal and disability discrimination claim, but challenged the amount awarded for her loss of pension benefits due to her illness and inability to return to work. The tribunals had followed the existing guidance on calculating pension loss but had used the simplified approach and not properly taken account of the claimant’s circumstances or her loss of future final salary pension benefits.

The judge criticised the formal guidance referred to by the tribunals: the guidance did not have statutory force and was now significantly out of date having been written over 10 years ago. Pension schemes have changed significantly over recent years and employees are likely to find new employment with final salary scheme pension benefits.

Ginevra Gatrell says: Consequently the tribunal guidance should not be heavily relied upon in future pension loss cases and should be viewed critically.

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