Pearl Assurance - Pension mis selling "guarantee"

jewellery10

My husband died suddenly as a result of a road traffic incident in October 2009.

It has taken me until now (that is another story!) to get to the point where I am attempting to make a claim against two Pearl Personal Pension policies that my late husband was sold in the late 1980's. The policies were reviewed as part of the pension mis selling fiasco and a "Guarantee Certificate" was issued by the Pearl stating that he would receive benefits which are at least equal in value to those you would have had from your employers scheme.

However, I have received a quote from the Pearl with the following options

1) Use all funds to provide an annuity from the Pearl
2) Tax free lump sum and remainder of fund to provide an annuity from the Pearl
3) Open Market option to purchase an annuity from another provider
4) Tax free lump sum and remainder of fund to purcahse an annuity from another provider

Once I have chosen one of these options, a Pearl representative stated that they would then work out how much they would have to compensate for the fact that if any one of the options above is less that the benefits my late husband would have received from his employers scheme, they will "make up" the difference.

Are there any disadvantages/advantages of chosing one option over the other taking into account that the Pearl has to make up any shortfall?

Any help would be appreciated.

jewellery10

No-one gone through the process of a pension mis-selling guarantee then? As the widow with 2 children I need to ensure that any decision I make will safeguard their future. Do you know anyone who has gone through this process?

Any information gratefully received.

cavework

OP first and foremost I am very sorry you have lost your Husband.
I cannot give you any advice but I do know there are people on here who I am sure would be able to help and advise you.
If no one does reply it might be worth talking to a few independant financial advisors.

JOHNGT

First you need to read the 'guarantee' that Pearl gave your late husband. Does this agree to replicate exactly the benefits the scheme would have paid? What is the basis of the guarantee - is it based upon your husband's pension had it come into payment at the date of his death? Or is the guarantee of a widow's pension in the event of death?

From what you say of the options, it would appear not to matter if you shop around for an annuity elsewhere. For example, let's say the guarantee is £5,000 and a Pearl annuity gives you £4000 and one from another company gives you £4500. Does it matter to you who provides the annuity if Pearl is going to top it up to £5,000 anyway?

Regarding the tax-free lump sum, you will have to give up some pension to get that. Depending on your age, state of health and the £s of pension you have to give up, taking tax-free cash is not always the best option from a purely value for money viewpoint. But you may have other needs for a cash lump sum such as paying off debts, or a need for income which also affects the choice you make.

First you need to be crystal clear on what Pearl are offering you. If you don't think the documentation is clear, ask them to spell it out to you in writing and in Plain English.

If you have more detailed info such as the amount of cash you will get and the amount of pension you have to give up, someone on here will help you work out whether the trade-off is good VFM.

As cavework says, if you are not confident about this, you might be better off showing what you have got from Pearl to a professional such as an IFA who will make sure you don't make a poor choice.