Complaint against Pearl PLC.... HELP!!!!!!

rjkershaw

In a nutshell....

In 1990 Pearl approached my Dad knowing he had a frozen Local Authority Pension scheme. Government legislation stated that these could be unfrozen and reinvested, with the assurance that the reinvested fund 'must do better than or equal too the frozen fund'. Reassured, my Dad signed up to the transfer.

In 1998 the Government recommended that the Pension Providers carry out a review of reinvested frozen pensions. At this point Pearl returned with news that his reinvested fund was 24.12% lower than it would have been with the local authority. Consequently Pearl enhanced his fund by £5,000. However, this was accompanied by a very dubious document stating that it was in full and final settlement of any claims against advice given by Pearl Reps. In other words if he didn't sign, he didn't get the money. There was no mention of revised T&C's.

On retirement in 2003 it emerged that the fund was now 60% lower than the local authority fund would have been!

Since 2003 my dad has been battling with Pearl, the FSA and the Ombudsman all to no avail. No one seems prepared to help him rectify this situation and get the full value of his fund reinstated.

Please, please, please can anyone help?

EdInvestor

I doubt that he has anywhere to go, as his misselling case has already been dealt with under the Pension Review.He cannot complain about the investment performance of the pension.

What has he been told?

dunstonh

In other words if he didn't sign, he didn't get the money.

Which is fair enough. They have to do that for liability reasons.

Please, please, please can anyone help?

Pearl would have sold a Freedom Bond which is a section 32 buy out bond. Not great but many of these have guaranteed annuity rates and the GMP within them typically means that they have not grown to match the GMP so you cannot take the benefits earlier without transferring out and losing the guarantee.

Is your father retiring early or is he at the scheme retirement age?

Retired_I.F.A.

"Government legislation stated that these could be unfrozen and reinvested, with the assurance that the reinvested fund 'must do better than or equal to the frozen fund'.

That's not true. there is, was, never has been, nor will there ever be any assurance given by any company or ordered to be given by the government. If he was told that (he did not need proof of being told) by a pearl rep then he was missold.

"In 1998 the Government recommended that the Pension Providers carry out a review of reinvested frozen pensions. At this point Pearl returned with news that his reinvested fund was 24.12% lower than it would have been with the local authority".

The local authority fund value never existed so there is absolutely no way of saying it's value.

Consequently Pearl enhanced his fund by £5,000. However, this was accompanied by a very dubious document stating that it was in full and final settlement of any claims against advice given by Pearl Reps. In other words if he didn't sign, he didn't get the money. There was no mention of revised T&C's.

He accepted the £5000, wheras he could have persued his misselling claim further.

On retirement in 2003 it emerged that the fund was now 60% lower than the local authority fund would have been!

Again thats not true. Although he was worse off at retirement hehe could just as easily have been better off and possibly was with better death benefits pre retirement.

Since 2003 my dad has been battling with Pearl, the FSA and the Ombudsman all to no avail. No one seems prepared to help him rectify this situation and get the full value of his fund reinstated.

Sorry to sound like a know it all prat but the truth is your dad never understood the pension he was in nor the one he transfered to. When given the oppertunity to understand and get redress for a missold pension he looked not into how they work but the bottom line only and accepted the £5000 probably thinking it was that or nothing. He should have seeked further advice at the time. it's too late now.

Darts

Yes if he accepted redress in full and final settlement I don't think there's much that can be done.

If it is a S32 it might be worth seeing in Pearl are trying to use the redress payment to partly fund the GMP. I might be wrong but I don't think they can do this as the GMP at least should be funded from the original transfer, so any redress payment should be used to pay for 'excess' benefits.

MikeJones_2

Hi rjkershaw,

This is a long shot. Was you dad offered reinstatement back into the Local Government Pension Scheme as an option by Pearl?

Reinstatement would have been where LGPS (at the specific request of Pearl) would have performed a calculation to find out what amount of money would have been needed to buy back your dad's pension benefits within the LGPS scheme. If for example the LGPS came back and said they needed £124,356, and if at the time your dad's transfer value with the Pearl was £92,546, then Pearl would have had to make up the difference of £31,810 in this (not extreme) example.

Reinstatement was often significantly more expensive for product providers such as Pearl. This was because whilst calculating compensation for mis-selling was done using parameters set by the financial services regulators at the time, the actual calculation which would have been used by a defined benefit scheme (such as the LGPS) were not - it could use it's own method of calculation without any reference to the regulators.

Indeed a defined benefit scheme (such as the LGPS) could refuse to accept reinstatement without reason.

Ask the question or look through the paperwork for the word reinstatement (into your dad's former pension scheme). Or alternatively, contact the LGPS to see whether they have any record of a request for a reinstatement calculation from Pearl.

Sorry to hear of your dad's predicament. He won't have been the first - and won't be the last to experience that situation.

Mike Jones

I work in the field of Pension Education and Pension Guidance in the UK. I am a current member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser.

dunstonh

I have had a few Pearl Freedom bonds come up and on maturity at selected retirement age they have recalculated cases under the pension review. Its only one early retirement or transfers out that they havent. That is why more information is needed.