Section 32 Pension Redress

BERT_2

I transfered a company pension into a Norwich Union Section 32 policy in 1991 . In 2000 I was awarded a lump sum for being mis-sold this policy.
This redress was to provide for the tax free lump sum and the other benefits that the original sum had no hope of producing .
Like others I have recieved no bonus since 2005.
Now it seems Aviva have placed both policies together and it looks as if they will use the redress money to help the policy meet the GMP.
Can they do this - Has anybody elses redress money met the same fate. I am 57 years old the Transfer value is £76000 original sum invested was £8450 and a sum of £37000 given for the mis-selling with a GMP of £8250 on reaching state pension age.

mrschaucer

Sounds like a rerun of my experience with Clerical Medical. They put both "pots" together some years ago, and were all set to use the redress money to help pay for the GMP until I produced their letter written at the time of their accepting the redress payment stating that this payment would only ever be used to provide additional benefits and not go towards the GMP. Did you ever get anything in writing to prove what you believe is the case? If so, get your IFA to send them a copy when you start getting your pension organised. Strangely, CM then even calculated my tax free lump sum on the total amount in the pension pot (original plus redress) even though the original amount wasn't enough to pay the GMP ... If you don't have anything in writing, you've got time to badger them to confirm what you believe you were told at the time. Do it sooner rather than later.

BERT_2

Thanks for that

morven135

I have just received a letter from Norwich Union saying that they may not be able to meet that guarantees under my Section 32 Policy at my nominated retirement date and that they may therefore have to change the Benefit date. I cannot see anywhere in the Policy which gives them that option. Can anybody help?

Also interested in Bert's comments about being mis-sold this contract and the redress that was paid. If Bert is there, would you mind sharing the process around this please?

xylophone

I have just received a letter from Norwich Union saying that they may not be able to meet that guarantees under my Section 32 Policy at my nominated retirement date and that they may therefore have to change the Benefit date.

Is there a GMP?

http://www.scottishlife.co.uk/scotlife/Web/Site/faq2.asp?category=S32%20buyout%20bonds#935 Anything relevant here?

dunstonh

I have just received a letter from Norwich Union saying that they may not be able to meet that guarantees under my Section 32 Policy at my nominated retirement date and that they may therefore have to change the Benefit date. I cannot see anywhere in the Policy which gives them that option. Can anybody help?

Look for the term GMP - Guaranteed minimum pension. If the pot is insufficient to meet the GMP then they can refuse to allow early commencement and any tax free cash. It doesnt mean you cant commence the pension early. It would require a transfer to do that and the guarantees lost. However, you have to be on guard when doing that in case you are throwing away valuable guarantees.