Challenging a reduced GMP

Dai11

I have a Section 32 GMP after my original private sector employer contracted out of the SERPS. When I left this employer in 1991 the Pension was invested with Norwich Union with the GMP predicted to provide an annual income of £2400 at retirement

Age 60 came and went without the option of taking the pension as the fund had not performed, with it being delayed until age 65, but still with the forecast GMP of £2400 a year.

I have now been surprised to find that Aviva have written to me 4 months before age 65 to confim that HMRC have been in touch with them to inform them Aviva's records are incorrect and that the correct amount of GMP should be £1,788 per annum.

Upon querying this with Aviva, they have stated that they were originally informed by my former employer of the minimum £2400 GMP. Aviva claim that sometimes the records of company pension schemes can be incorrect and that as retirement is approaching, HMRC get in touch with Aviva to confirm what the GMP should be. As the amount on Avivia's records (ie £2400) is different to the HMRC record they must update their records as per the CA1620 form from HMRC which confirms the lower amount. (£1,788)

Is this normal practice? It seems strange that it is not until just before retirement that these figures are confirmed when it is too late to alter income into retirement plans.

I would like to challenge this but not sure where to turn as it seems Aviva are blaming my previous employer but also hiding behind the HMRC response.

Given the fund itself is worth about £40k I would prefer to take this out, but Aviva have confirmed that this is not possible due to the nature of the Section 32 and that an annuity must be purchased - either with themselves or on the open market.

Any suggestions or tips on my options for complaint would be greatly appreciated

xylophone

There have been problems.....

http://www.thisismoney.co.uk/money/pensions/article-2566539/Aviva-threw-retirement-plans-disarray.html

Re not being able to take benefits at 60 see

http://boards.thisismoney.co.uk/savings-investing-pensions/36507.htm

When you left your company, were you given a statement showing pre 88 GMP, post 88 GMP and the excess?

Are Aviva saying that all you will receive by way of a pension is the lower GMP amount? (A pension of £1788 per annum?)

Is the transfer value of this policy at least equal to the lower GMP?

If so, might a transfer out be possible? (Possibility of using pension freedom after 6 April?)

https://forums.moneysavingexpert.com/discussion/comment/66537854#Comment_66537854 post 14

http://www.pensionsandannuities.co.uk/GMPInsurers.htm might be worth a look?

Try Pension Advisory Service for assistance?

http://www.pensionsadvisoryservice.org.uk/

Have you had a state pension statement?

Dai11

Thank you for your help and the links to the various articles.

I have no correspondence from my former employer confirming the pre and post '88 GMP but the various letters from Avivia over the years (the last one when I turned 60) have all confirmed pre '88 as £1,483.56 and post '88 as £916.76 giving the £2400 mentioned above.

These figures have now been altered since the confirmation to Aviva from HMRC this year, who have listed the following;

Pension Details

Contracted out between 84/85 and 91/92

Weekly GM at date of termination £15.03

GMP accrued between 6th April 1988 and 5th April 1997 at date of termination £5.74

Weekly GMP at date of entitlement £34.39

GMP accrued between 6th April 1988 and 5th April 1997 at date of entitlement £13.13


Having contacted Aviva, they have confirmed that the GMP of £1788.28 is all I could expect to received.

The article you have also linked concerning the pension not being paid from age 60 also strikes a chord with the Norwich Union contract that I have - this may be something I will explore further.

agarnett

Like that Norwich Union example in the judgement referred to in that Pension Ombudsman case, was your S32 policy "With Profits", Dai11?

If it was, there could be another missale element in it which may have knocked the stuffing out of your policy's performance since 2008/9:

Again, if yours was With Profits with regular annual bonuses declared once upon a time, did you take a reattribution bribe 'negotiated' by the Policyholder Advocate six years ago with Aviva, the people who kindly agreed to pay her salary and office staff expenses (did they pay from the With Profits funds? I was never quite sure - but I read that they were paying misselling claims from it and even using it to prop up their own staff pension scheme at one point) ?

xylophone

OP, have you yourself checked the figures with HMRC?

See post 9

https://forums.moneysavingexpert.com/discussion/comment/67918282#Comment_67918282




See http://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/18/what-is-a-gmp/

As I understand it, a S32 would normally use Fixed Rate? If so, this would be at 7.5%?

Was weekly pre 88 GMP at date of termination £9.29?
(£483.08 per annum)?

Was weekly post 88 GMP at date of termination £5.74, ( £298.48 per annum)?

This is £783.53 to revalue for around 24 years?

Have you asked Aviva how they revalued the GMP in deferment?[

Presumably they must increase the post 88 portion of your revalued GMP once in payment by up to 3% CPI?