Prudential s32 pension - update

parcival

My wife (aged 54) left Barclays Bank in 1990 and was advised by a Financial Advisor to transfer her pension to a standalone s32 (I think) pension with Prudential. It appears to be made up of 2 lots of units in the With Profits Fund. It looks like one set of units relates to a GMP.
The paperwork quotes her normal retirement age as being 60 - so presumably this is when she could normally avail herself of this pension. However since 1990 the state retirement age for her has increased to 65. Will this prudential policy still pay out at 60 or will she have to wait until 65.
Thanks.

EdInvestor

It will pay out at 60.She could in addition take the pension now, but it would need to be converted in a personal pension first abd she would lose her guarantee.

Has she considered making a complaint against the IFA for misselling, assuming the Barclay's scheme was a final salary one?

parcival

Thanks for the info Edinvestor. Now very intrigued - yes it was final salary but on what grounds would she have for a miselling complaint.

Interesting because we have since fallen out with the IFA after another mis selling fiasco for which we were compensated by the FSCS.

dunstonh

Now very intrigued - yes it was final salary but on what grounds would she have for a miselling complaint.

Between 1988 and 1993 too many people were told to transfer out of final salary schemes into section 32 buy out bonds or personal pensions. Ed is assuming that yours was one of the ones that wasnt justified.

SnowMan

The IFA should have explained that you were switching from a scheme that provided a guaranteed benefit to an investment that was dependant on investment returns and dependant on unknown annuity rates at retirement.

The IFA should also have done a broad comparison to check the likelihood that the transferred benefits would have provided more than the final salary scheme. Typically things like discretionary pension increases were ignored when calculating transfer values and so people lost out on these benefits when transferring.

If this didn’t all happen and you wouldn’t have transferred had it all been explained then you have grounds for complaint. However you may come up against time limits for complaining.

In practice these things were very rarely fully explained or understood by IFAs and so most people were probably mis-sold their policies. It was usually motivated by commission. The IFA got no commission if they told you to stay put but got paid commission if they advised you to transfer. Many of the companies of direct salesforces (not IFAs who were required to fight by professional indemnity insurance) actually took the view that all pension transfer sales (before around 1994) were mis-sold because the probability of justifying a sale as being compliant was so small.

It’s all a bit vague in my memory now but if your policy was sold after June 1988 you should have been offered an opportunity to request a review of your pension transfer by your IFA in the late 90s early noughties. If you were offered a review but didn’t take it up then you may be time barred from taking further action. But if you weren’t offered the opportunity for a review then you MAY be able to complain now.

If you weren't told about the switch to non-guaranteed benefits etc then put in a complaint to your IFA and then to the Ombudsman if the IFA rejects your complaint. You are likely to hit up against the time limits but it is always worth giving it a go if these things weren't explained.

parcival

Thanks Dunstonh.
I have been through all of the paperwork on my wifes behalf and don't even pretend to understand it.
However she was sent a letter by the IFA along with an FSA fact sheet back in 1999. This asked whether she wanted the IFA to check her case in the light of the number of mis selling cases. As far as I can see (and this concurs with her recollection) she did not reply to the letter. It sounds like she was in error in ignoring this.
Can we still ask the IFA to check her case or has too much time passed?

SnowMan

I suspect the limitations act means it is too late to complain see FSA info here.

However I am not a solicitor or expert on time limits so if in doubt complain.

dunstonh

Can we still ask the IFA to check her case or has too much time passed?

I suspect you are barred. Plus, you say you had an issue with this IFA that resulted in an FSCS redress payment. So, that suggests that the IFA in question no longer exists and any complaint you had to make would be through the FSCS. Its possible the review was never completed and no time bar was put in place.

The problem with a lot of pension transfers between 88-93 were that the actuaries gave information and effectively gave the go ahead on the basis that it was right to move them. The Govt also actively marketed personal pensions as a flexible and "better" option. With hindsight, there were an awful lot of flaws. Hence why the pension review was instigated.

parcival

The other 'issue' that gave rise to the fscs claim was that the IFA did not agree with our complaint - the fscs ultimately upheld it.
The IFA is still alive and kicking so I think a letter of complaint might be worth a go. It's a long shot and I am sure the IFA will reject it as we are not his favourite people!!!

dunstonh

The other 'issue' that gave rise to the fscs claim was that the IFA did not agree with our complaint - the fscs ultimately upheld it.

Do you mean FOS and not FSCS? The FSCS only get involved where the firm no longer exists or the firm has no assets.

parcival

Yes it was the Ombudsman and it was in relation to the Exeter Fund Managers Zero Fund - us and thousands of others no doubt. The IFA rejected it on the basis that he could not reasonably have been expected to understand the complexity of split caps!!!