opted out of serps do i have a claim

dazzabambro

hi, i opted out of serps in 1987 with cis my dob is 25/11/68.
i forgot about it and had i think only one statement from cis between87and 02.
in 2002 i was diagnosed with parkinsons and had to medicaly retire
recently i saw something online about serps and got in touch with cis who sent me an otions pack idecided to take a £3000 lump sum and a pension of £33 a month.
ive just been lookiing at the statement dated 2009 2010 and the total contribtions from govt are 0 and as far as i can tell theyve been 0 since i retired in 2002,is this correct ?
and do i have a claim against cis as they have failed to keep me informed about the pension and failed to advise me that i could have claimed this pension when i retired back i 2002.
i feel that this policy has been mishandled from the start

withabix

Assuming you didn't have an employment income since 2002, there would not have been any contributions since then, as none would have been due.

Did CIS have your correct address?

Did you advise CIS in 2002 that you had retired?

You say that CIS have failed to keep you informed about the pension, BUT you also say you have annual statements. This is all they are required to provide.

It appears that they are offering you a lump sum equal to the amount you would have received since 2002, plus an ongoing pension.

What are you expecting to have a claim for?

dazzabambro

i dont have statements the only statement they provided was after i contacted them recently
yes they have allways had my address s they do insurances for other members of my family
shouldnt they have contacted me when the contributions stopped as they are administering and supposedly advising me on the pesnsion

dunstonh

i opted out of serps in 1987 with cis my dob is 25/11/68.

That seems like good advice. You were in the age range that it was best to do it.

in 2002 i was diagnosed with parkinsons and had to medicaly retire

So, as mentioned above, you have only been contracted out on paper since 2002 as you were not earning (like a bucket under the tap but the tap is turned off)

ive just been lookiing at the statement dated 2009 2010 and the total contribtions from govt are 0 and as far as i can tell theyve been 0 since i retired in 2002,is this correct ?

Yes. rebates are based on your class 1 NI contributions. You havent paid any class 1 NI since 2002.

and do i have a claim against cis as they have failed to keep me informed about the pension and failed to advise me that i could have claimed this pension when i retired back i 2002.

It is not for CIS to tell you what you can or cannot do. That is for you or your adviser. They take instructions from you or your adviser. You couldnt "claim" this pension back in 2002 on normal basis as you were too young. So, unless you tell them you were ill and qualified for early release they would not know that.

shouldnt they have contacted me when the contributions stopped as they are administering and supposedly advising me on the pesnsion

They are not advising you on the pension. That is not within their remit. Your adviser, if you employ one, does that or you do it if you do not employ one. The CIS pension was quite ready to accept contracted out rebates. The fact the tap was turned off because you stopped working doesnt mean the plan was contracted back in. On paper it was still contracted out.

There is no wrong doing here. You seem to be looking to blame someone. Either blame yourself or your adviser if you employed one to provide servicing to you (CIS have never offered servicing, only transactional advice).

jamesd

dunsonh, would Parkinsons produce any chance of an enhanced annuity?

Initial advice to contract out looks perfect given your age and when it was done, it was expected to be the best choice at the time you were contracted out. No payments in from the government since you stopped working and paying the NI that they use to fund the payments is also right.

I don't see any reason for them to tell you about the pension income option back in 2002. Unless you had told them that you had been diagnosed with a medical condition that was expected by your doctors to kill you within a year you wouldn't have been eligible because you wouldn't have been at least 50 years old. The current rule is 55 years old.

I agree that there has been significant mishandling but that's by you, not CIS. You should have been monitoring and adjusting your investments and staying on top of its value with at least annual checks by you from the time you started it. Pensions like this aren't places where you just stuff in the money and forget about it unless you don't care how much you get back - you can make a huge difference by taking control and being proactive with them.

Your most significant mishandling may be the recent one where you saw something online and asked for an options pack then took a lump sum but didn't ask here or an IFA. You may have badly mishandled that in these two ways:

1. Until April 2012 such pension payments from contracted out money have to provide ongoing income for a spouse after your death. If you have no spouse this mistake has cost you significant income that you could otherwise have, because you now have cover for a spouse you don't have. Even if you do have a spouse it might be better for you to have an annuity without protection for your spouse, particularly if their income is low enough that they would qualify for means-tested benefits after your death. CIS were not required to tell you about this change in the rules.

2. You have a medical condition that could affect your life expectancy. CIS probably quoted you terms for a standard annuity that doesn't take any account of such medical conditions. They aren't required to mention any products that they don't offer themselves. They are required to mention something called the "open market option".

You have no apparent basis for a claim against CIS so far but tell us more about exactly when you got the options pack from them and what type of annuity you have. There's a small chance that there's still an opportunity to correct things and get you a better deal if it's recent enough. Did you tell CIS about the Parkinson's at any point during your discussions about the option pack? If you did, did they mention contacting an independent financial advisor in any way, verbal or on paper, after that? Do you have a spouse?

My guess is that your best choice would have been to wait until the new tax year and get a single life level annuity then, perhaps on enhanced terms because of the Parkinsons.

dunstonh

dunsonh, would Parkinsons produce any chance of an enhanced annuity?

I dont know. Which is surprising as one of the towns near me has the highest number of parkinsons cases in the country. Yet I have never had anyone mention it when asking about health.

jamesd

A little checking I just did show s mixed results.

A little research I just did shows that it may well vary depending on the specifics of the individual case but that the general expectation is about normal. While this one says that life expectancy is typically significantly to substantially reduced compared to the general population depending on age of diagnosis.

So merely mentioning Parkinson's wouldn't necessarily be a red flag that even an execution-only provider should have noted, though you surely know much more about that than I do. Which may well close the avenue that might have allowed dazzabambro to get out of the current annuity.

dazzabambro

thanks for the replies i got the options pack in mid december.i have no spouse. i spoke to cis and explained the situation that i have parkinsons and have had it since diagnosed with what is called early onsett parkinson in 2002, im now 43. the open markets option is briefly mentioned but nobody explained this to me and cis never suggested contacting an ifa
i took an annuity from cis it consisted of a lump sum of £3800 and a monthly pension of £33.00

dunstonh

the open markets option is briefly mentioned but nobody explained this to me and cis never suggested contacting an ifa

CIS dont offer enhanced or impaired annuities. They offer their own product.

They do mention the open market option in their paperwork but do not really promote the benefit (pretty obvious as its a bit like asking Tesco to promote ASDA. It is disclosed as an option available to you. At that point, you needed to ask an IFA. It's too late now.

jamesd

If you want to do as I suggested and wait until the new tax year then buy a level single life annuity I suggest that you do this:

1. Complain to them that even as an execution only sale your discussion with them of you having been diagnosed with Parkinson's, a condition known to adversely affect life expectancy, should have prompted them to consider the inappropriateness of an execution-only sale of a non-enhanced annuity given your situation.

2. Ask them as redress (use those two words) to cancel the annuity purchase and return the money to the pension pot so you can transfer it elsewhere to purchase an appropriate product.

You may or may not succeed but my guess is that this will give you the best prospect for an improved position. You aren't going to get any cash in the hand out of this, just a chance to get a more appropriate annuity, at best.

Note that I don't know if you have a spouse or not, don't know if you'd want a single life instead of joint life annuity (single would pay you more while alive) and don't know the specifics of your health situation so I can't check what impairment increase you might get, if any. I'm speculating based on generalities and limited information. Remember that it's YOU who's making the decisions here, we're just discussing options and possible implications to help you to decide and know what you might be able to do.

Mostly, you probably screwed up and I'm trying to find a way to get you out of it to get you a higher income, which is highly likely if you were to decide to buy a single life annuity in the new tax year. They might decide it's cheaper to give in than stand firm and pay the costs of this going to the Financial Ombudsman Service.

dazzabambro

thanks for the advice jamesd have written the following letter hopefully itl work
Cis Insurance Ltd
Miller Street
Manchester
M60 0AL 1st February 2012
Re penson ref no: xxxxxxxxxx
Dear sir/ madam,
I beleive i have made an error in choosing my options for the above pension.When i spoke to you representative by phone and informed them that i wished to be sent the options pack made them fully aware that i was medically retired due to parkinsons,
Even as an execution only sale my conversation with your representative and the fact that i have parkinsons a condition which can severely affect quaility and life expextancy should have prompted them to consider the inapropriotness of an execution only sale of a non enhanced annuity given my situation.
I was also not made aware that up untill april 2012 contribtions from contracted out money have to provide a pension for a spouse after my death.
As i have no spouse i beleive this has cost me severe financial loss.
I was also not advised of the benefits of contacting a independent financial advisor which one would expect from a professional company such as yourselves.
May i suggest that as a form of redress that you return the money to the pension pot so i can use it to purchase a more appropriate annuity in the new tax year.
I look forward to your comments and eagerly await your reply.
Yours Sincerely
Darren Bambrough
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