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  • FIRST POST
    • HowardRoberts
    • By HowardRoberts 17th Jan 17, 9:49 AM
    • 4Posts
    • 3Thanks
    HowardRoberts
    Norwich Union (Aviva) Section 32 mis-selling on benefit indexation
    • #1
    • 17th Jan 17, 9:49 AM
    Norwich Union (Aviva) Section 32 mis-selling on benefit indexation 17th Jan 17 at 9:49 AM
    I would be interested in hearing from anybody who has had a problem with mis-information on the indexation of their benefits on a Section 32 GMP from Aviva (previously Norwich Union). I took out a Section 32 transfer in 1989, on contributions made between 1975 and 1989. All the documents etc. that I was given at the time (illustration, policy) implied that the benefits would increase by 3% annually. Now Aviva tell me that it is only the post 1988 proportion (pretty small) that will increase by 3%. This is not what is shown in the Norwich Union documents. This will obviously make a huge difference to the real value of the benefits as I get older.
Page 1
    • xylophone
    • By xylophone 17th Jan 17, 1:14 PM
    • 23,675 Posts
    • 13,799 Thanks
    xylophone
    • #2
    • 17th Jan 17, 1:14 PM
    • #2
    • 17th Jan 17, 1:14 PM
    All the documents etc. that I was given at the time (illustration, policy) implied
    What does the policy actually say?
    • HowardRoberts
    • By HowardRoberts 28th Jan 17, 6:57 AM
    • 4 Posts
    • 3 Thanks
    HowardRoberts
    • #3
    • 28th Jan 17, 6:57 AM
    Illustration
    • #3
    • 28th Jan 17, 6:57 AM
    Hello. The actual wording on the Norwich Union illustrations note 4 is 'benefits will increase a rate of 3%p.a. compound on the anniversary of the first date of payment'. I realise that this is purely the plan illustration. The actual policy is of course several pages - I will prepare the extracts.
    • xylophone
    • By xylophone 28th Jan 17, 1:28 PM
    • 23,675 Posts
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    xylophone
    • #4
    • 28th Jan 17, 1:28 PM
    • #4
    • 28th Jan 17, 1:28 PM
    Re GMP portion of your pension, the insurer has no obligation to increase pre 88 GMP in payment and post 88 GMP only up to 3%.

    http://www.financialadvice.net/s32_buy_out_plan/zone/1288

    http://forums.moneysavingexpert.com/showthread.php?p=71977297#post71977297 see post 96.
    • waterstar
    • By waterstar 28th Jan 17, 4:19 PM
    • 157 Posts
    • 131 Thanks
    waterstar
    • #5
    • 28th Jan 17, 4:19 PM
    • #5
    • 28th Jan 17, 4:19 PM
    All the documents etc. that I was given at the time (illustration, policy) implied that the benefits would increase by 3% annually. Now Aviva tell me that it is only the post 1988 proportion (pretty small) that will increase by 3%. This is not what is shown in the Norwich Union documents. This will obviously make a huge difference to the real value of the benefits as I get older.
    Originally posted by HowardRoberts
    I also have a Aviva s32 from the same era and have experienced the same disappointing outcome.

    I suggest there are two different 3% figures coming into play in respect of your policy.

    (a) the escalation percentage rate, which is what Aviva used in the projections presented to you and which i believe was typically based on the maximum inflation factor in the DB pension from which the transfer in was provided (in the case of my s32 this escalation percentage rate was 5%); and

    (b) the 3% relating to post 1988 GMP which Xylophone refers to above.

    Re the escalation percentage rate the position of Aviva appears to be that it is dealt with under section 9 (of most policies of this era) "The rate of increase in Pension shall not be such that the pension and Widow's pension which can be purchased by the capital shall be less than the GMP and the GMWP respectively. "

    There was a lengthy discussion of this in a previous thread, see particularly posting 25 onwards

    http://forums.moneysavingexpert.com/showthread.php?t=1089865
    Money Saving Fan.
    • towag
    • By towag 29th Jan 17, 7:02 PM
    • 117 Posts
    • 32 Thanks
    towag
    • #6
    • 29th Jan 17, 7:02 PM
    • #6
    • 29th Jan 17, 7:02 PM
    Thats because Aviva are fobbing everyone of with the same excuse of pre 1988 and post 1988 "legislation" ..... http://www.aviva-for-advisers.co.uk/adviser/site/public/tech-centre/tech-article-detail/section-32-arrangements-gmps-and-transferring .....That they do not have to pay it and that the government is responsible for paying that "EPR" (Escalation Percentage Rate) through your old state pension and the new state pension... What they didnt factor in was that if you were "contracted out" you would also receive a reduced state pension, because you paid less NI contributions towards your state pension which was to encourage people into paying into these type of DB pensions, or your section 32 from Norwich Union, if you left a DB company or government pension scheme... So in effect not only will you get NO EPR from Aviva, you will also get a reduced state pension which the Aviva or section 32 pension EPR was supposed to make up for.... Crafty and unacceptable con and fob off by Aviva or any other company that doesn't want to pay this very important part of these section 32 pensions through saying "insufficient funds" when the fund is worth 39 billion quid https://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=NQF50&univ=P...
    Not only that, the CEO of Aviva recently had a pay deal...http://www.thisismoney.co.uk/money/markets/article-3514805/IN-MONEY-Aviva-chief-executive-Mark-Wilson-handed-3-1m-pay-rise.html?login#readerCommentsCommand-message-field
    So Aviva can do this, yet renege on your pension and everyone else's, which just goes to show what conniving rip off merchants this company really is... Stating "insufficient funds" is doing nothing other than just fobbing you off with the same old lame excuse as to WHY they did not pay all these section 32 holders from their 60th birthdays or chosen maturity dates when they were meant to receive it!!!! THAT is EXACTLY what they are doing NOW to get out of paying the EPR of 3% or 5% depending on when you took your policy out...
    The ruling and determination by the PO and Anthony Harris's Persistence is WHY you are getting your pension paid in full (minus the EPR)...
    I repeat... NOTHING is stated in my policy or any subsequent documentation recieved from Aviva, about my section 32 policy does it state that Aviva is or are exempt from paying the EPR... In fact the wording says that it SHALL and WILL be paid on commencement of my pension coming into force at maturity... This other "clause" if you read it does not mention that they are also exempt from paying out the EPR "The rate of increase in Pension shall not be such that the pension and Widow's pension which can be purchased by the capital shall be less than the GMP and the GMWP respectively" .... Aviva wrote to me after pressure with the same as I said above and all they came back with is the same lame excuse they have been using for not paying out from the chosen maturity age... I suggest you read your policy and re-read it to see if you can find anything that even suggests that... If its anything like mine, then you will not find it... THAT is WHY I am challenging it by way of complaint to the Pension Ombudsman... I hope you will see that, and suggest that you do what Anthony Harris did in challenging these discrepancies as I am already doing by challenging this through the Pension Ombudsman.... Up to you of course, but then again you have nothing to lose in doing so.... Except your 3% EPR......
    • Pension12
    • By Pension12 28th Feb 17, 3:04 PM
    • 11 Posts
    • 1 Thanks
    Pension12
    • #7
    • 28th Feb 17, 3:04 PM
    • #7
    • 28th Feb 17, 3:04 PM
    Hi Towag,

    I'm having the same problem (see thread: Should my Pension escalate annually, sorry no link but as a newbe I cannot post links) and my reading of the of the policy is that they are required to apply increments. They are however using the pargraph:

    The rate of increase in pensions shall not be such that the pension and Widow's pension which can be purchased by the Capital Sum shall be less than the Guaranteed Minimum Pension and the Guaranteed Minimum Widow's Pension respectively.

    as a let out cluase, saying it means the incrments don't apply to the GMP, but try as I may I cannot see this, I read it a being that whatever the increment they still must pay at least the GMP and could pay more.

    At the moment I am still banging away to Aviva about this but will be going to the Pensions Onbudsman if they do not change their mind and award the increment. Meanwhile, I would be interested to know how your experience with the onbudsman is going, also whether or not you are currently taking your pension or have deferred it until after the onbudsman has made a decision.
    • PotentialEnergy
    • By PotentialEnergy 28th Feb 17, 4:23 PM
    • 62 Posts
    • 14 Thanks
    PotentialEnergy
    • #8
    • 28th Feb 17, 4:23 PM
    • #8
    • 28th Feb 17, 4:23 PM
    Hi

    Towag has done some comprehensive searching and cross-referencing to other forums. Here are another few to run down as there may be a useful nugget of information. It backs up the point made of how long this has gone on and dragging of heels.

    http://forums.moneysavingexpert.com/showthread.php?t=5439551

    http://forums.moneysavingexpert.com/showthread.php?p=70539122

    http://forums.moneysavingexpert.com/showthread.php?t=4413631

    http://forums.moneysavingexpert.com/showthread.php?t=1089865

    I too have a S32[from 89] but with Pearl now part of Phoenix Life. It has a good Guaranteed Annuity Rate if I exercise it at the age of 65. That I will do. It will require some horrendous inflation over the next few years and/or astrnomic rises in the annuity rates for it to be a bad decision to have sat on my hands with the policy.
    • towag
    • By towag 28th Feb 17, 11:40 PM
    • 117 Posts
    • 32 Thanks
    towag
    • #9
    • 28th Feb 17, 11:40 PM
    • #9
    • 28th Feb 17, 11:40 PM
    I suggest that you do exactly what you say you intend to do and get your complaint in ASAP!! Put it this way... You, me and probably thousands of others are being hoodwinked into losing their EPR's because of Aviva's legislation "interpretations" of these policies... They were found wrong in deferring all those with agreed benefit dates of 60 to 65 because of Mr Anthony Harris's hard work and persistence... I also know that the PO has recieved many other complaints of the same problem. from people who have the same NU policies... I assume you have read the posts I've made and I suggest you read up on the links I've put in, so that you get a clearer picture of what Aviva are actually trying to get away with... The trouble is that many who have these policies are basically too bone idle and/or complacent about getting what they are really actually entitled to, from what they agreed to in the 1st place when they took out these policies... Aviva know that and are laughing all the way to the "bank" with its vast profits, denying all of us with these abused policies... Its morally wrong and they know it, but as with all these giant insurance companies they DO NOT GIVE A DAMN as we are just small fry who can be brushed aside with impunity... I just have a gut feeling feel that IF you do not stand up to these insurance and pension industry "bullies" they will just keep getting away with what they do... So you have nothing to lose other than the EPR's that are stated in your policies... End of... Up to you at the end of the day, and I say go for it...
    • Pension12
    • By Pension12 23rd Mar 17, 12:10 PM
    • 11 Posts
    • 1 Thanks
    Pension12
    Hi towag,

    I have been conversing with the Pensions Advisory Service who at the moment seem to be determind to side with AVIVA.

    Have you had any feedback from the Pensions Onbudsman yet? If so what have they said?

    Cheers

    Pension12
    • towag
    • By towag 26th Mar 17, 8:45 PM
    • 117 Posts
    • 32 Thanks
    towag
    Hi towag,

    I have been conversing with the Pensions Advisory Service who at the moment seem to be determind to side with AVIVA.

    Have you had any feedback from the Pensions Onbudsman yet? If so what have they said?

    Cheers

    Pension12
    Originally posted by Pension12
    If you have any sense whatsoever Pension 12, you will get your complaint in via the Pension Ombudsman Pronto... Suffice to say that quite a few others have put in complaints regarding the EPR Escalation Percentage Rate... Pre1988 5% post 1988 3% which for your info IS NOT in your contract or says anything about this"legislation"... Stick to what the contract says regardless what Aviva tell you... Its in their interest to put you off the scent with the same old lame excuse of "insufficient funds" scenario which they tell everyone with these Norwich Union Section 32 Policies... I cant say anymore than that because I have instructions not to divulge the details of my case to anyone, other than what's already known on this subject... http://forums.moneysavingexpert.com/showthread.php?t=5439551
    Read all the way through the thread, but dont bother with the IFA "advice" and flim flam from other posters as it will cloud out what is important to you...
    Clarity is what's important... You will see posts from me and also PersistancePaysOff ... That in fact, is Mr Anthony Harris, who through his complaint to the PO you now have your pension being paid to you as originally in your contract... I hope that helps you to make up your mind and what you feel you must do if you want to be paid what you are owed by your Norwich Union S32 contract...
    • M_j_t
    • By M_j_t 4th Apr 17, 4:20 AM
    • 30 Posts
    • 2 Thanks
    M_j_t
    So Towag I'm saying :-

    I also believe that there is one important aspect that has not been acknowledged by Aviva. That is that in my complaint I have the expectation of d):-
    Apply the provisions set out in Section 7 appropriately , allowing the Guaranteed Minimum Pension and the Widow’s Guaranteed Minimum Pension to increase annually according to the policy
    The relevant part of section 7 states:-
    Provision may be made for all or any pensions purchased under this Condition to increase at a percentage rate not exceeding in total 8.5% compound from each anniversary of the Benefit Date or the Substitute Benefit date provided that no pension may exceed whichever is appropriate of the Maximum Pension, Maximum Widow’s Pension or Maximum Dependent’s Pension increased by the accumulated increase in the Retail Price Index published in the calendar month preceding the month in which the Benefit Date or Substitute Benefit Date occurred or by 3% compound per annum whichever is the greater less in the case of a pension payable to the Insured the pension equivalent of any cash sum taken at the Benefit date or Substitute Benefit Date.

    The quotation appears to contradict this in that it is split into two separate amounts, a pre 1988 amount of £910.44 with a yearly increase of 0% and a post 1988 amount of £881.04 with a yearly increase of 3%. From the above I believe that this should in fact be a single amount of £1791.48 increasing yearly at the Retail Price Index with a minimum of 3% and a maximum of 8.5%.
    Is that a suitable way for a coward to complain about the issue that you have so clearly explained?

    P.S. I've been told not that I have insufficient funds but that I am not funded.

    I’ve checked with our actuarial department, and can confirm policy ET?????? is, as you suspected, not funded.
    Last edited by M_j_t; 04-04-2017 at 5:30 AM.
    • towag
    • By towag 4th Apr 17, 7:30 AM
    • 117 Posts
    • 32 Thanks
    towag
    So Towag I'm saying :-

    Is that a suitable way for a coward to complain about the issue that you have so clearly explained?

    P.S. I've been told not that I have insufficient funds but that I am not funded.
    Originally posted by M_j_t
    So you believe everything that Aviva quote you... Fine... Thats your prerogative.... Good luck....
    • M_j_t
    • By M_j_t 4th Apr 17, 4:11 PM
    • 30 Posts
    • 2 Thanks
    M_j_t
    So you believe everything that Aviva quote you... Fine... Thats your prerogative.... Good luck..
    Of course I do, there's so much evidence on here that I never questioned a word of what Aviva say and of course where would luck come in when it's all down to what is written by Aviva?
    • towag
    • By towag 4th Apr 17, 7:35 PM
    • 117 Posts
    • 32 Thanks
    towag
    Of course I do, there's so much evidence on here that I never questioned a word of what Aviva say and of course where would luck come in when it's all down to what is written by Aviva?
    Originally posted by M_j_t
    Fine for you, but I would hazard a good guess that many reading your posts would completely disagree with you... You must be a fan of Aviva, their "products" and neglect of these Section 32 policies bought out from Norwich Union during the early part of this century....
    • Ian Macfrugall
    • By Ian Macfrugall 2nd Oct 17, 10:00 PM
    • 3 Posts
    • 0 Thanks
    Ian Macfrugall
    I have this exact same issue with a denial of my stated EPR because there are insuficient funds. Is it worth complaining?
    • Ian Macfrugall
    • By Ian Macfrugall 16th Oct 17, 9:56 AM
    • 3 Posts
    • 0 Thanks
    Ian Macfrugall
    Oh dear I seem to have missed the boat on this debate as nobody is responding! Dissapointed ��
    • xylophone
    • By xylophone 16th Oct 17, 10:43 AM
    • 23,675 Posts
    • 13,799 Thanks
    xylophone
    Oh dear I seem to have missed the boat on this debate as nobody is responding! Dissapointed ��
    It has been debated to death? See above and previous threads.

    http://forums.moneysavingexpert.com/showthread.php?p=72173287

    https://www.ftadviser.com/pensions/2017/05/10/aviva-pension-policy-complaint-dismissed/

    But if you think you have a case then you should go ahead and make your complaint.
    • waterstar
    • By waterstar 23rd Oct 17, 4:07 PM
    • 157 Posts
    • 131 Thanks
    waterstar
    I know there are various threads re Aviva s32 on the forum and one or other gets reactivated from time to time. This seems to be the thread which has had posts most recently, so posting here.

    Recently the ombudsman (FOS) has upheld a complaint that a client was given “fundamentally bad advice” by an adviser to transfer out of a company pension nearly 30 years ago (in 1989) to a Norwich Union s32. FOS had an actuarial calculation performed and worked out the losses as approximately £300k, although FOS could only order £100,000 in redress with a recommendation the firm pay the balance of what is left of the pension losses, but this is not binding.

    From what i have read this claim has been in process since about 2003, however when you read the adjudication (48 pages!) the reduction in pension income in terms of the s32 outcome versus the deferred pension outcome seems to be of a similar order of magnitude to that which many posters on this forum have hinted at or disclosed in their own cases.

    News report is at

    https://www.moneymarketing.co.uk/ombudsman-upholds-complaint-1989-pension-transfer/

    Adjudication is at

    http://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=158628
    Money Saving Fan.
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