Serps compensation companies

Rosetta_2

Anyone have a clue what these companies are up to with their compensation offers? I have two pensions one final salary and one career average over my 32 years of work and have just received early retirement from the career average one due to ill health.

My Serps contracting out was done when I was a teenager working in local government and is now with Aviva. I had not a clue what I was doing at the time but it was real hard sell at that point in the mid 80's.

Is it something worth investigating or is it dodgy?

jem16

Rosetta_2 wrote: »

My Serps contracting out was done when I was a teenager working in local government and is now with Aviva. I had not a clue what I was doing at the time but it was real hard sell at that point in the mid 80's.

If you were working for local government, were you not in the LGPS (Local Government Pension Scheme)? If you were it's a contracted out scheme and you would have had no option.

Is it something worth investigating or is it dodgy?

Contracting out when you were under 44 years of age would have been the correct thing to do.

It's not worth investigating and most claims companies do it as a means of charging you for a pension review.

dunstonh

Anyone have a clue what these companies are up to with their compensation offers

Yes. Typically, they fall under two camps.
1 - sell you a rubbish story that you fall for and have to pay them an up front fee (it is the up front fee where they make their money)
2 - sell you a rubbish story that you fall for. When they obtain the pension details, they then persuade you to transfer it to their own arranged scheme to earn commission/fee. It is that bit that makes them the money.

I

have two pensions one final salary and one career average over my 32 years of work and have just received early retirement from the career average one due to ill health.

So, this doesnt apply to you then.

My Serps contracting out was done when I was a teenager working in local government and is now with Aviva.

How did your local government pension end up with Aviva?
The LGPS is contracted out within the scheme. you cant contract out again with an insurer (well you can but its like putting a bucket under a tap that is turned off).

Is it something worth investigating or is it dodgy?

The FSA review found a failure rate of just 1.5% a few years back and the claims companies have avoided it ever since (apart from some rather dodgy ones).

I had not a clue what I was doing at the time but it was real hard sell at that point in the mid 80's.

You say you have defined benefit schemes of 32 years. So, that pre-dates the ability to contract out using a personal pension. You couldnt contract out in the mid 80s either. So, how were you given the hard sell for something you couldnt do?

addedvaluebob

The FSA review found a failure rate of just 1.5% a few years back and the claims companies have avoided it ever since (apart from some rather dodgy ones).

Most of the companies offering to investigate old pension plans are financial advisers or rogue pension transfer companies that are just interested in earning a commission from transferring the funds that you have elsewhere and just use the serps bit to get you into the system

jamesd

Rosetta_2 wrote: »

Anyone have a clue what these companies are up to with their compensation offers?

If they are telling you that you're entitled to compensation they are lying to you. Because...

Rosetta_2 wrote: »

I have two pensions one final salary and one career average

and there hasn't been any mis-selling at all of those pensions, so there is no possibility at all that you could get any compensation.

Rosetta_2 wrote: »

My Serps contracting out was done when I was a teenager working in local government and is now with Aviva.

Not sure how you managed to get local pension money to Aviva, since LGPS is a contracted out final or average salary scheme. Maybe you fell for a dodgy transfer offer at some point in the past and transferred out of LGPS to Aviva from that? If so, and if the scammers haven't all vanished, you might be entitled to redress from them for bad advice.

However, lets pretend that you did contract out into a personal pension instead of being in a workplace defined benefit pension. You still couldn't have much in the way of a case for any compensation because the flat rate state pension that's coming in makes those who contracted out winners. They get both the contracted out pension and continue to accrue increases in the state pension for the years when those who didn't contract out have already hit its cap.

If our own state pension isn't at the flat rate level when you find out your foundation amount in late 2016 or 2017 you can use self-employed contributions or just buy whole years to get to the maximum. It's a good deal unless your illness hugely reduces your life expectancy.

Rosetta_2 wrote: »

Is it something worth investigating or is it dodgy?

It's a scam of one sort or another.

agarnett

Like so many of us right now, we are drawn to the small print of years of bumpf which make up our pensions and from which we can now plot the effects of incessant changes (for many can only be plotted in hindsight).

My first (and only surviving) DB scheme was a non-contributory "contracted out" scheme and started more than 32 years ago. So the OP may have a valid point even though dunstonh has thrown us off the scent a bit.

Personal pensions were of course not the first or the only means to be "contracted out".

I was just told to join the scheme - I'd be daft not to! I think that is a kind of hard sell if no-one comes back later and offers to review and optimise it ! (They never did of course, unless they wanted to wind it up ... d'uh!).

For the OP to have a SERPs policy with Aviva does sound a little odd if he somehow got started with it in the 80s whilst working for Local Government. But stranger things have happened especially with so much outsourcing over the years in Local Government Services and Transfers of Undertakings. When did we first see the name Veolia? And Capita ? There will be others each with their own idea about how to sell a slightly varied pension to someone who was previously bog standard LGPS! And you can bet that the likes of NU and CU's Morley etc. (which both became part of Aviva) were always there ready for easy picking via their more acquisitive and expansive corporate contacts. Maybe the OP ended up in some TUPE'd organisation that eventually wound up what used to be his LGPS pension and defaulted him into an Aviva Section 32 buy out policy - With Profits and later with Clare Spottiswoode if he was darned unlucky! But I digress ...

However, dunstonh may recall if he goes back far enough in his records that the government offered some kind of special 2% incentive to start SERPs policies effective at a date in 1987. Not quite mid 80s, but not quite late 80s - that's when the first personal pension SERPs policies were sold I guess, and I recall some kind of backdating was recommended. It resulted in a lot of mistakes I think.

Anyway, in recent months or weeks the media has been full of how those of us with SERPs policies can't now expect full state pensions. It took the best part of a year for the penny to drop on that one in the media. Maybe even longer.

What is lesser known I think, is the State Pension Deductible (SPD?) within contracted out DB scheme rules which may have a similar effect after State Pension Age if we actually get there - a kind of double whammy perhaps for those of us who are relying on original DB schemes for the first part of our pensions and upon SERPs and other personal pensions to make up the rest?

• Firstly my SERPs policy (whether or not I have cashed it and spent it?) will reduce my State Pension entitlement.
• Secondly, my State Pension Entitlement will reduce my DB scheme benefits because it was a contracted out DB scheme.

Am I the first to raise this as a possible double whammy? Any more pennies need dropping fast ? And meantime might I get one-up on the system by cashing in my DB scheme and spending it before SPA, or will they still reduce my State Pension even further irrespective of whether the contracted DB scheme is cashed and gone ? Who would ever know ? Will Equifax and Experian be keeping tabs on us ? Or maybe LexisNexis will from the USA :rotfl:

gadgetmind

agarnett wrote: »

Anyway, in recent months or weeks the media has been full of how those of us with SERPs policies can't now expect full state pensions. It took the best part of a year for the penny to drop on that one in the media. Maybe even longer.

However, those people prepared to read and understand the governments papers on the subject - thereby getting their information first hand rather than from the unreliable filters of the media - knew pretty much exactly where they stood at an early stage.

(BTW, what's a "SERPs policy"? That's not a phrase I recognise, so perhaps it's something you've invented?)

will they still reduce my State Pension even further irrespective of whether the contracted DB scheme is cashed and gone ?

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181229/single-tier-pension.pdf

Summary: The new single tier pension calculations take no account of how well (or badly) people handle their DC and/or DB contracted out pensions.
Longer version: Read the paper rather than the papers!

BTW, both myself and my wife contracted out into DC pots yet will both still qualify for the full single tier pension, so it's perfectly possible to eat your cake and have it.

dunstonh

However, dunstonh may recall if he goes back far enough in his records that the government offered some kind of special 2% incentive to start SERPs policies effective at a date in 1987. Not quite mid 80s, but not quite late 80s - that's when the first personal pension SERPs policies were sold I guess, and I recall some kind of backdating was recommended. It resulted in a lot of mistakes I think.

The pre-royal ascent ones of 87 did have a bonus. They also had a lump sum entitlement which the 88 onwards ones did not (although A day in 2006 equalised that).

The OP has been in defined benefit schemes since 1983. So, any APPP sold, would never have received any rebates. It would never have come into force.

hyubh

For the OP to have a SERPs policy with Aviva does sound a little odd if he somehow got started with it in the 80s whilst working for Local Government. But stranger things have happened especially with so much outsourcing over the years in Local Government Services and Transfers of Undertakings.

TUPE doesn't properly protect pension rights, 'Fair Deal' legislation (for public sector workers and ex-public sector workers) does.

When did we first see the name Veolia? And Capita ? There will be others each with their own idea about how to sell a slightly varied pension to someone who was previously bog standard LGPS!

You're confused. Under Fair Deal taking on workers under TUPE requires their continuing membership of a pension scheme of 'broadly comparable' quality to the LGPS, which would have to be DB not DC. When outsourcing first got going larger contractors might still have their own FS scheme open, in which case the transferred workers would typically enter it. If a comparable scheme isn't available (or if the old and new employers don't agree on using it) then the contractor enters the LGPS fund as an 'admitted body' for the workers concerned, who then enjoy continuous membership in the vanilla LGPS. (This has been the normal case for some years now.)

And you can bet that the likes of NU and CU's Morley etc. (which both became part of Aviva) were always there ready for easy picking via their more acquisitive and expansive corporate contacts. Maybe the OP ended up in some TUPE'd organisation that eventually wound up what used to be his LGPS pension and defaulted him into an Aviva Section 32 buy out policy - With Profits and later with Clare Spottiswoode if he was darned unlucky!

I doubt it. Given the timeline, if what had been a small LGPS DB ended up elsewhere, it would have been because the OP had actively transferred out of the LGPS (or LGSS as then was).

Anyway, in recent months or weeks the media has been full of how those of us with SERPs policies can't now expect full state pensions. It took the best part of a year for the penny to drop on that one in the media.

The narrative is however a load of tosh, for reasons much discussed in this forum.

Firstly my SERPs policy (whether or not I have cashed it and spent it?) will reduce my State Pension entitlement.

If you were contracted out for a period you were not accruing additional state pension in the first place, so have lost nothing.

Secondly, my State Pension Entitlement will reduce my DB scheme benefits because it was a contracted out DB scheme.

What do you mean - something to do with revaluation rates for GMP vs. excess perhaps...?

And meantime might I get one-up on the system by cashing in my DB scheme and spending it before SPA

That would be foolish.

or will they still reduce my State Pension even further irrespective of whether the contracted DB scheme is cashed and gone ?

Nothing is being 'reduced' because you will get as least as much state pension as you would have got under the current system.

greenglide

Quote:
Secondly, my State Pension Entitlement will reduce my DB scheme benefits because it was a contracted out DB scheme.
What do you mean - something to do with revaluation rates for GMP vs. excess perhaps...?

A final salary scheme which has an NRA of below SPa and pays an enhanced rate between the scheme age and SPa which reduces at SPa to take account of the SP being claimed? This is separate from GMP splitting the pension into different bits depending on who pays the GMP inflation proofing.

They used to exist in the financial sector I beleive.

agarnett

gadgetmind wrote:

(BTW, what's a "SERPs policy"? That's not a phrase I recognise, so perhaps it's something you've invented?)

State Earnings Related Pension scheme policy issued by an insurance company (like NU or CU =Aviva now?). Comes with a "policy" document? And apart from the word "policy", the acronym SERPS is in the heading of this thread, so if I invented it, it must have caught on! You do so often seem to have time on your hands to eat cake and have it all gadget, so maybe as one of those people prepared to read and understand the governments papers on the subject - thereby getting their information first hand rather than from the unreliable filters of the media - you could do us all a favour and come back and tell the less adept of us which way really is up today on the concept of SERPS compensation? Where do we apply, for example?

hyubh wrote:

When outsourcing first got going larger contractors might still have their own FS scheme open, in which case the transferred workers would typically enter it.

Well there you go, hybuh - you've laid out a typical scenario* that would more likely than not end up with an involuntary wind up and a default option of a transfered out pension into some buy out policy with vultures like Aviva or similar :rotfl: Surely it is a short hop from a scenario like that to a compensation claim, although not specifically a SERPS compensation claim

*For clarity, the above-mentioned scenario is NOT a scenario where someone like the OP would have actively transferred out. It is a scenario where someone like the OP would have been summarily tipped out on to a heap not of the OP's making, especially if they weren't as fleet of foot or could hold a candle to the intellects of those as great as gadgetmind!

hyubh wrote:

Nothing is being 'reduced' because you will get as least as much state pension as you would have got under the current system.

Oh right - and your real forte is political spin perhaps?

greenglide wrote:

A final salary scheme which has an NRA of below SPa and pays an enhanced rate between the scheme age and SPa which reduces at SPa to take account of the SP being claimed?

Yep you got it in one I think.

This is separate from GMP splitting the pension into different bits depending on who pays the GMP inflation proofing.

Er ... yes ... er, ... maybe ? I think you are right if you are responding to hyubh's suggestion that it is

something to do with revaluation rates for GMP vs. excess perhaps...?

(not)

They used to exist in the financial sector I beleive.

Hoards of folks in the UK have been employed for stints in the financial sector. In the case of my pension reflecting my stint, the phenomenon still does exist apparently! I doubt I am alone