Pension mis-selling in the 80's/90's

Culzean

I posted on this a few months ago ... please do read if you were one of those that were seduced out of a final salary scheme into a personal pension and subsequently claimed when the pension review was undertaken in the late 90's .. it's rather long but will only take a minute or two

I was one of those and the firm that persuaded me (Sedgwick) did not defend their actions and paid a small compensation payment into my pension.

I challenged the amount at the time but was told the amount was calculated using the rules set by the regulator so it was a simple take it or leave it

16 years later and as I approach retirement the pension has not accrued one single penny and indeed the paltry "compensation" hasn't even got the fund to a sum greater than the original GMP (Guaranteed Minimum Pension) that came with the new pension

For context my final salary pension would have paid me £23,000 annually and the pension I transferred to is going to pay me £6900 annually.

I have protested as much as I can to the Ombudsman (who is not interested) and even to my MP who has written to the FSA and got a curt "the matter is closed" response. I have also written to Ross Altman (a pensions lobbyist) but she said she couldn't help, and my letter to The Sunday Times went unanswered. I'm beginning to think Conspiracy Theory!!

It simply isn't right but I'm at a loss to know what to do next. I believe I will either have to take the regulator to court to have them reopen my case or try to access the European Court of Justice (or whatever). Naturally I have zero idea of how to do either and nor do I have a vast amount of savings to fund such activity.

One thing a (sympathetic) lady said at the Ombudsman office was that "there are several thousand others in the same position"

So I'm wondering where all these people are and have they just surrendered to the bullying tactics that the regulator oversaw? I'm trying to find people in the same predicament as myself and see if we can come up with a collective answer or who have also pursued the matter maybe further than I have and understand where they got to.

I am so determined not to let the matter drop but would really appreciate some help to know what course of action I should take and to possibly discuss this with others in the same boat

mania112

If the FOS, your MP, Ros Altmann, The Sunday Times and the company that gave the original advice ALL say they can't help you, perhaps its time to admit defeat?

If the company who gave the advice (Sedgwick) are no longer trading I think it's the FSCS who you should report to? You must have come across the line of enquiry though, so i'm sure all bases are covered.

Why do you think you have such a strong case?

dunstonh

So I'm wondering where all these people are and have they just surrendered to the bullying tactics that the regulator oversaw?

There has been a softening on the pensions review. The person that set it up said in an article a couple of years ago that with hindsight, too many people got paid redress who shouldn't. However, the position on final salary transfers has never been stronger and you have the position that they are mis-sold unless proven otherwise (i..e guilty unless proven innocent).

The problem in your case is that you accepted the settlement. That would have been a full and final settlement with an agreement to close the case and not pursue any further. So, you have limited scope for re-opening it.

I would suggest you visit a solicitor and put your case to them and follow their legal advice. Otherwise you are likely to spend a long time getting knocked back. The fact no-one is taking any interest and telling you that your legal position is weak. A solicitor would be able to verify this for you.

SnowMan

The redress offer would have set out that the calculations were based on assumptions set out by the FSA.

Ultimately the calculations had to be based on assumptions. Because the numbers wrongly advised was massive, trying to offer a guarantee at retirement in all cases would have been impractical.

The calculations allowed for future expenses so it would always depend what returns your pension achieved and the rates at which you could convert it into an annuity against the assumptions, amongst other things on how you would end up better or worse.

In coming up with the assumptions they had to draw up a balance between those who had been wrongly advised and those who did no take advice and left their money in their company schemes. To be overly generous to those who has been mis-advised rather than giving them a best estimate of their loss would have been wrong.

You would have signed an agreement to accept the offer, It would have said clearly that whether you would gain or lose would depend on how the future panned out against the assumptions. So there is nothing further you can do.

If you at the time of the offer had gone to the Ombudsman and said I am not accepting the offer because I want a simple guarantee of my benefits then you might have a stronger case. They wouldn't have done anything about it at the time, but at least you could put up an argument to say you were unfairly treated.

If things had gone the other way and you ended up getting more from the personal pension (after allowing for the redress) than through the company scheme you would not have been asked to pay some of the money back.

I think the FSA, Ros Altman etc are right in what they say and I would have said the same.

Culzean

mania112 wrote: »

If the FOS, your MP, Ros Altmann, The Sunday Times and the company that gave the original advice ALL say they can't help you, perhaps its time to admit defeat?

If the company who gave the advice (Sedgwick) are no longer trading I think it's the FSCS who you should report to? You must have come across the line of enquiry though, so i'm sure all bases are covered.

Why do you think you have such a strong case?

Sedgwick were consumed by Mercer and they would have to take the liability if the FSA were ever to reopen.

I believe my case is strong as the original intent of the review was

"to restore your pension benefit to it's position had you not transferred it out of your company pension scheme"

This has clearly not been accomplished and the regulator is simply saying they have closed their files when I (and many more as I understand) have not in any way had my pension restored. The regulator argues that they didn't know at the time that the "compensation" would be inadequate but

a) to me, a complete layman, it was woefully inadequate and wouldn't remotely have fulfilled the objective - I was "bullied" into acceptance

b) now they can see the evidence of the inadequacy surely they have a responsibility to admit that they made a mistake at the time and look at all those cases where the intent of the review was not accomplished

I think the reason why others are not inclined to get involved is because it will simply require a lot of work and a lot of heavy lifting. Although there are likely to be hundreds and several thousands in the same situation as me, it's still a drop in the ocean by comparison to the total population and therefore, not the sort of thing that these people/organisations would see much merit in pursuing ... perhaps?

Culzean

dunstonh wrote: »

There has been a softening on the pensions review. The person that set it up said in an article a couple of years ago that with hindsight, too many people got paid redress who shouldn't. However, the position on final salary transfers has never been stronger and you have the position that they are mis-sold unless proven otherwise (i..e guilty unless proven innocent).

The problem in your case is that you accepted the settlement. That would have been a full and final settlement with an agreement to close the case and not pursue any further. So, you have limited scope for re-opening it.

I would suggest you visit a solicitor and put your case to them and follow their legal advice. Otherwise you are likely to spend a long time getting knocked back. The fact no-one is taking any interest and telling you that your legal position is weak. A solicitor would be able to verify this for you.

The fact that I was mis-sold was never challenged, it was pretty open and shut and I won't bore you with that.

I did accept the settlement but under complete duress and thankfully I have all the paper work from the time proving this. I was actually told if I didn't sign the settlement then I would get nothing. Now if that isn't bullying I don't know what is.

I could go to a solicitor but I have very limited means which is why I'm trying to find others in the same position that might want to join with me and attack it as a "class action" of whatever the correct term is.

Then it would be a case of getting a solicitor that was good enough to take on the establishment ... it's a really tough thing I think and as I said in another reply there's a relatively small number of people in my position and so we can be "swept under the carpet".

But I'll keep trying and I accept what you're saying

Culzean

SnowMan wrote: »

The redress offer would have set out that the calculations were based on assumptions set out by the FSA.

Ultimately the calculations had to be based on assumptions. Because the numbers wrongly advised was massive, trying to offer a guarantee at retirement in all cases would have been impractical.

The calculations allowed for future expenses so it would always depend what returns your pension achieved and the rates at which you could convert it into an annuity against the assumptions, amongst other things on how you would end up better or worse.

In coming up with the assumptions they had to draw up a balance between those who had been wrongly advised and those who did no take advice and left their money in their company schemes. To be overly generous to those who has been mis-advised rather than giving them a best estimate of their loss would have been wrong.

You would have signed an agreement to accept the offer, It would have said clearly that whether you would gain or lose would depend on how the future panned out against the assumptions. So there is nothing further you can do.

If you at the time of the offer had gone to the Ombudsman and said I am not accepting the offer because I want a simple guarantee of my benefits then you might have a stronger case. They wouldn't have done anything about it at the time, but at least you could put up an argument to say you were unfairly treated.

If things had gone the other way and you ended up getting more from the personal pension (after allowing for the redress) than through the company scheme you would not have been asked to pay some of the money back.

I think the FSA, Ros Altman etc are right in what they say and I would have said the same.

That's a very sensible view.

Yes the calculations were wholly assumptive and had my retirement been 1 or 2 years away I wouldn't have any issue. I certainly wasn't looking for anything over generous simply that my pension would be restored to what it would have otherwise been.

The only truly fair way would have been to either reverse the fund back into the original pension scheme (my former employers refused, not unsurprisingly seeing as it was them that made the appointment for me to meet with Sedgewick on the company premises before I left!!) or to instruct Sedgewick to ensure that my pension was sufficiently funded at retirement to pay a comparable pension. In this regard the investment return risk would be on Sedgwick and not myself which seems to be the right way given they were the ones who seduced me out of the company pension claiming (what we now know to be) wildly optimistic returns

I've answered elsewhere the point of signing the acceptance under protest.

Of course I do recognise this isn't going to be easy but this represents the bulk of my working life and it feels like I have been robbed of my retirement income and the regulator is quite happy to turn his back ... sorry but it just seems wrong (forgive the emotion!!)

SnowMan

Culzean wrote: »

Of course I do recognise this isn't going to be easy but this represents the bulk of my working life and it feels like I have been robbed of my retirement income and the regulator is quite happy to turn his back ... sorry but it just seems wrong (forgive the emotion!!)

I'm not without some sympathy for your position, I just think that your chances of sucess are close to zero, and I can understand for practical reasons why the process was as it was.

The one group who might have a chance of some sort of legal challenge would be those who were reviewed and told they had 'no loss'.

They didn't normally sign any paperwork to say they accepted there was 'no loss', and if a loss later arose they could possible argue they thought they were OK because the review calculations showed no loss.

I don't know anything about legal timescales to know if there would be a possibility of a claim in those circumstances.

dunstonh

I could go to a solicitor but I have very limited means which is why I'm trying to find others in the same position that might want to join with me and attack it as a "class action" of whatever the correct term is.

Class action suits are not something you see in the UK generally. Also, the problem with trying to find others is that your action is against Sedgewick. You would be reliant on finding others who used the same company and have the same views as you. That is going to be a small pot of people. You would also need them to be willing to pay legal costs as you are not.

In this regard the investment return risk would be on Sedgwick and not myself which seems to be the right way given they were the ones who seduced me out of the company pension claiming (what we now know to be) wildly optimistic returns

actually, they were not wildly optimistic. They were set by the regulator and reasonable and lower than past decades. We have just had one of the worst investment decades in history. Highly unfortunate yes but it happens.

Of course I do recognise this isn't going to be easy but this represents the bulk of my working life and it feels like I have been robbed of my retirement income and the regulator is quite happy to turn his back ... sorry but it just seems wrong (forgive the emotion!!)

It all comes back down to the fact you accepted the offer of compensation.

I think you will find most of us here sympathise with your situation but would likely feel you have no hope given your acceptance of the offer plus the firm that gave you the advice no longer exists. So, you cant take them to court anyway. The redress under the FSCS is capped and follows a defined method and as your complaint was settled and accepted prior to the FSCS taking on liaiblity, they dont need to consider any new complaint on the same subject as an already closed and settled case. Plus, there is also the probabilty you are timebarred anyway as you have 15 years to raise court action.

vvvvvvvvvvvvvvvv

I claimed in the 90's too and got a paltry sum that has'nt changed,not with sedgwick though.

Culzean

SnowMan wrote: »

I'm not without some sympathy for your position, I just think that your chances of sucess are close to zero, and I can understand for practical reasons why the process was as it was.

The one group who might have a chance of some sort of legal challenge would be those who were reviewed and told they had 'no loss'.

They didn't normally sign any paperwork to say they accepted there was 'no loss', and if a loss later arose they could possible argue they thought they were OK because the review calculations showed no loss.

I don't know anything about legal timescales to know if there would be a possibility of a claim in those circumstances.

Yes my chances of success are slim but my hope is to get this surfaced, get it into the public eye perhaps and if I can find others that have suffered in the same way as I then perhaps so collective lobbying or even more formal action may give me/us some hope.

I'm not sure about finding those judged to have no loss, although I hear precisely what you are saying, even if I could find them, I could well end up with a bunch of people hoping for some sort of profit just by jumping on a bandwagon. That might sound harsh but I can't believe there aren't many thousands like me who were coerced into signing and have ended up with not a penny ... knowing where to find them though?