Valuation of future pensions losses in defined benefit schemes

In Jhuti v Royal Mail Group, the employment tribunal ordered the respondent to pay in excess of £2.3m to Ms Jhuti as compensation following her successful claim for unfair dismissal. In doing so, the tribunal provided guidance as to the valuation of losses of future pension. The parties had been unable to agree the methodology for valuing future pensions losses. Ms Jhuti’s proposed methodology produced a figure in excess of £1m (which would have resulted in an overall award in excess of £3m) whereas the respondent’s proposed methodology produced a figure of around £70,000. The tribunal rejected Ms Jhuti’s proposed methodology, stating that this would result in her being compensated twice for her loss of future earnings, and give rise to gross and unjustifiable overcompensation.

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