Can they renege on a guaranteed transfer value?

keithn

Hi,

I am a deferred member of a defined benefits scheme from a period of employment in the 1980's. In January 2012, I asked the pension provider to give me an up-to-date statement of benefits including a transfer value. They duly responded (after almost 3 weeks!) with a letter and statement quoting a guaranteed transfer value of £177,320.02 which I though was rather high considering that the pension at 65 was only about £3750 per annum. I asked them to re-confirm the figures and for other information such as early retirement penalties etc and again after 3 weeks, they re-affirmed the figures including the transfer value of £177,320.02, which was guaranteed if the transfer out took place before the 14th May 2012.

They are now back-pedalling saying that they have miscalculated the transfer value and that it should have been much less. They have said that they will re-calculate and send me the new figures in due course.

My question is: can they now change the transfer value even though I have two sets of signed paperwork from them stating the guaranteed transfer amount and without any clauses such as E & OE or other get-out's or can I hold them to their original figures? I suspect the new transfer figure will be less than half what they initially offered & guaranteed until the 14th May 2012.

Any help or advice would be gratefully received.

Many Thanks,

Keith

CannySaver_2

Hi

I would have thought there is a difference between a "guaranteed" value and what has happened in your case which is clearly a clerical error.

If they had correctly told you the transfer value then no, they could not change it during the guarantee period. However, it seems they have miscalculated your transfer value and are now simply recalculating it correctly.

This might come as a disapointment to you given the higher figure originally quoted but I would imagine you will have to accept it. Although when they come up with the new figure I'd do through their calculation with a fine tooth comb to make sure they are correct.

The Canny Saver

dunstonh

There is an FOS case on something similar to that where the difference was over £120k. The FOS ruled against the individual saying that it was a clerical error and that the person does not automatically gain rights to an amount just because a clerical error is made.

If the error was shorting you then you wouldnt expect them to turn around and refuse to put it up to the right figure. The same works in reverse.

SnowMan

You may find this page on 'Mistakes and overpayments' on The Pensions Advisory Service (TPAS) website useful (worth reading the questions also at the bottom of that page)

The starting position in your case is, as it says there:

Receiving misleading or incorrect information does not normally give a right to the incorrect benefits that have in error been quoted.

It may be worth contacting TPAS for advice if only for them to check that the revised transfer value quoted (when it has been calculated) is correct.

keithn

Hi,

Oh well, back to work for another 10 years

Thanks for the responses.

Keith