Mis-sold Occupational Pension???

dunstonh

Pollycat wrote: »

I think it's a shame that the OP has edited his first post so that the "rather complicated query relating to my occupational pension" is no longer readable but the replies are.

Copy of the first post before it was removed:

Hi There

I have a rather complicated query relating to my occupational pension which was sold to me between 1990 and 1993. I am a former employee of a large manufacturing company. In 2003 I was made redundant due to factory closure therefore my pension is apparently now preserved until I reach the age of 60 (I am currenly 30 something years of age).

My query relates directly to the question..."What constitutes mis-selling of a pension product"? On looking back I can remember very clearly being summoned to the HR department to speak to an HR Adviser who at the time informed me that it would be a good idea to join the scheme as it would be good for my future...sound advice undoubtedly. However in retrospect there are a number of areas which I feel prevented me from making an informed choice about whether to consider the alternatives to the occupational option.

As I said, I had a 10 minute discussion with my HR Adviser who to my knowledge had no professional financial experience what-so-ever (no disrespect to her). We had a short discussion and I was told that everyone who goes from a temporary to permenant contract "must" join the scheme. I was left in no doubt that I should join the scheme. I signed up and around £60 was deducted from my salary on a monthly basis. I was given a booklet (which i still have) and given no other information relating to terms and conditions etc.

I have the following specific questions which I'd be grateful if anyone could provide some advice:-

1. Should the company have provided a professional financial Adviser to offer advice on the occupational scheme v other alternatives?
2. Should the benefits of the scheme be outlined at the point of sale ie investments/risks etc?
3. I am currently looking to cash in my pension....apparently I cannot do this, however I was never informed of this, is this right?
4. I now work for another company and as an alternative to "cashing in" I considered transferring to my current employer. However, I cannot transfer my Pension to my current company's scheme due to issues relating to future rights. Although I would not expect my old employer to discuss this with me specifically, there was no mention that some schemes will not allow a transfer?
5. Am i likely to have a case for compensation if I complain.

Although the old pension provider was always regarded as a good scheme, I feel (now that i'm a bit older and wiser) that the the Scheme may, or indeed may not have been the right scheme for me. I get the feeling I have been mis-sold this extremely important financial committment.

Any advice anyone can offer would be much appreciated.

Stargazer57

...if the first impulse of former members is to consider action for misselling - even though the pension they have been given is worth many times their own contributions.

manabootadug

Stargazer57 wrote: »

...if the first impulse of former members is to consider action for misselling - even though the pension they have been given is worth many times their own contributions.

I'm sorry, but I asked some basic questions by way of assistance with my query. If my query offends your fundamental belief in the UK financial system then perhaps you should channel your energy more constructively.....ie answer the question, but not with another one?

Have some individuals learned no lessons from the current crisis. Financial institutions have embarked on a crusade against the very people who supported it for decades. I'm quite sure my little query has played no part in the downfall of any pension fund.

MrChips

manabootadug wrote: »

Quote: How do you feel you have been mis-sold? You have had the benefit of a final salary pension which carries no investment risk unlike all the other options. You have probably paid in a fraction of what it would have cost you to contribute to a defined contributions scheme. Meanwhile your preserved pension will continue to grow in line with inflation until your retirement age.
Answer: Yes it will continue to grow but only by the rate of inflation (a very small amount)....another part that wasn't explained.

This isn't quite true. Yes, your preserved pension will grow by the rate of inflation, but that isn't comparing like with like. If you had instead opted for a money purchase pension arrangement, then the value of your contributions would fluctuate with the investment returns of the assets you invested in.

For your final salary pension, a notional part of the total fund will be invested to provide your own pension and this will also fluctuate with investment returns. The difference is that to the extent that the investment returns aren't sufficient to provide you with your promised pension (which is inceasing each year by the level of inflation) your employer will have to stump up additional cash to make up the difference. So rather than your pension going up with inflation, the funds that back it are actually being given a no risk investment return, probably of the order of 6-7% pa. If investment returns are higher than this, you also have the chance of additional discretionary increases on top. Not a bad deal in my opinion.

jh2009

Im not really sure where this is going.......

Compulsary scheme membership was outlawed in the 1980s so it wasnt compulsary to join the scheme. The problem with a meeting with an HR Person almost 20 years ago is that with no record of the meeting its very much the posters word against the companies as to what happened.

When the posters says he was told he "must" join the scheme, its not impossible this was advised in error, but even if so there is a degree of personal responsibility here. Its no different really to going in a shop and being told I have to buy a product. Its my responsibilty to ask if its necessary, call a manager, etc before i pay for it.

The postings about whether a company, having provided a benefit voluntarilly that it was not required to by law, then has a responsibility to sit down with the member and hire advisers and effectively get a crystal ball out isnt a reasonable thing to expect a company to provide. Again when i go into a shop i dont expect tescos to provide advisers to analyse/comment on my shopping at the till, and this is no different.

I don't know the scheme rules, but its highly likely that if the member was unhappy about how he joined, he had time during his membership to opt out. Also id imagine that even if a scheme handbook was never presented to him, hes always been able to request it and that will have full info about the scheme, and how it operates.

The member will have the right to complain under his scheme rules if hes unhappy with what went on, and although i think its a waste of time given whats been posted here maybe he will feel better to get it off his chest. But he should really only do this if he has sufficient evidence to support any complaint he makes.

If the poster is so unhappy with the scheme then even if he cannot transfer it to his current employers scheme, hes always been free to set up a private scheme and do this. Considering its a final salary scheme though it probably wont be a great idea, given what has been posted by him, he must seek financial advice before doing so.

manabootadug

jh2009 wrote: »

Im not really sure where this is going.......

Compulsary scheme membership was outlawed in the 1980s so it wasnt compulsary to join the scheme. The problem with a meeting with an HR Person almost 20 years ago is that with no record of the meeting its very much the posters word against the companies as to what happened.

When the posters says he was told he "must" join the scheme, its not impossible this was advised in error, but even if so there is a degree of personal responsibility here. Its no different really to going in a shop and being told I have to buy a product. Its my responsibilty to ask if its necessary, call a manager, etc before i pay for it.

The postings about whether a company, having provided a benefit voluntarilly that it was not required to by law, then has a responsibility to sit down with the member and hire advisers and effectively get a crystal ball out isnt a reasonable thing to expect a company to provide. Again when i go into a shop i dont expect tescos to provide advisers to analyse/comment on my shopping at the till, and this is no different.

I don't know the scheme rules, but its highly likely that if the member was unhappy about how he joined, he had time during his membership to opt out. Also id imagine that even if a scheme handbook was never presented to him, hes always been able to request it and that will have full info about the scheme, and how it operates.

The member will have the right to complain under his scheme rules if hes unhappy with what went on, and although i think its a waste of time given whats been posted here maybe he will feel better to get it off his chest. But he should really only do this if he has sufficient evidence to support any complaint he makes.

If the poster is so unhappy with the scheme then even if he cannot transfer it to his current employers scheme, hes always been free to set up a private scheme and do this. Considering its a final salary scheme though it probably wont be a great idea, given what has been posted by him, he must seek financial advice before doing so.

Very useful, thanks!