Aviva -terminal bonuses

worn_out

I had a with profits policy mature in March but have never received a final valuation or terminal bonus advice from Aviva. This has run 28 years and I have no idea how much of my LTA is has taken.

I have written 4 times to Aviva , had 2 acknowledgements but still no answer.

Should I expect to receive a final statement ? if so, how do I ever get them to send me one...were they actually paying a terminal bonus in fact ?

Very frustrating..

SeniorSam

Telephone Aviva, ask to speak with a complaits officer and tell that person that an official complaint will be made in writing if you do not get answers and a valuatin statement within 7 days. That should prompt them to reply.

dunstonh

This has run 28 years and I have no idea how much of my LTA is has taken.

The new provider tells you how much lifetime allowance you have used. Not the old one.

Should I expect to receive a final statement ?

You normally get a closing statement or letter depending on the type of contract. Older ones tend to be a letter thanking you for investing with them and telling you how much they have transferred to your new pension provider.

worn_out

SeniorSam wrote: »

Telephone Aviva, ask to speak with a complaits officer and tell that person that an official complaint will be made in writing if you do not get answers and a valuatin statement within 7 days. That should prompt them to reply.

Thanks, yes I will that. I thought using their on line messaging facility would work, but it seems they don't open these messages.

minty777

worn_out wrote: »

Thanks, yes I will that. I thought using their on line messaging facility would work, but it seems they don't open these messages.

[EMAIL="social@aviva.co.uk"]social@aviva.co.uk[/EMAIL]

http://forums.moneysavingexpert.com/member.php?u=196594

[Deleted User]

I had a with profits policy mature in March but have never received a final valuation or terminal bonus advice from Aviva. This has run 28 years and I have no idea how much of my LTA is has taken.

I have written 4 times to Aviva , had 2 acknowledgements but still no answer.

Should I expect to receive a final statement ? if so, how do I ever get them to send me one...were they actually paying a terminal bonus in fact ?

Very frustrating..

Hi Worn Out,

I'm sorry to hear that you have not had a response from the team regarding your with profits policy. I would like to investigate this and ensure that we get you all the necessary information.

Could you possibly email me - social@aviva.co.uk with the following information:
- Full Name,
- Date Of Birth,
- Postcode,
- Policy and/or plan number and
- Your MSE username (so I can link your email to this post)

Once I have this information I will liaise with the relevant department and get back to you by email.

Kind regards

Mike
Aviva Online Team

worn_out

Aviva_company_representative wrote: »

Hi Worn Out,

I'm sorry to hear that you have not had a response from the team regarding your with profits policy. I would like to investigate this and ensure that we get you all the necessary information.

Could you possibly email me - [EMAIL="social@aviva.co.uk"]social@aviva.co.uk[/EMAIL] with the following information:
- Full Name,
- Date Of Birth,
- Postcode,
- Policy and/or plan number and
- Your MSE username (so I can link your email to this post)

Once I have this information I will liaise with the relevant department and get back to you by email.

Kind regards

Mike
Aviva Online Team

hello, sorry about late response.

i got a letter from aviva last week which said the value i was given in february was in fact the final value. the differnce between this 'value' (presumbly my share of the wp fund at current price) and the guaranteed amount plus bonuses was the terminal bonus ...so by default the difference was 'paid' to me. to make my fund up to my current share i had earned,. i kind of knew this was the method, but just surpised they knew the value in advance of my retirement date. as it is, it was all gmp anyway, and the fund wasn't enough to pay more than ..in fact with annuity rates at about 350/10000 the fund was not transferable due to it only being about half of what was rquired to buy the gmp. it would still have been nice to have a final letter from aviva, thank you for 28 years investment, here is your final bonus...this is your total fund...but your pension is the gmp and you can't transfer it anywhere else so we'll give you it, because we have to....or somthing like that....

agarnett

worn_out wrote: »

hello, sorry about late response.

i got a letter from aviva last week which said the value i was given in february was in fact the final value. the differnce between this 'value' (presumbly my share of the wp fund at current price) and the guaranteed amount plus bonuses was the terminal bonus ...so by default the difference was 'paid' to me. to make my fund up to my current share i had earned,. i kind of knew this was the method, but just surpised they knew the value in advance of my retirement date. as it is, it was all gmp anyway, and the fund wasn't enough to pay more than ..in fact with annuity rates at about 350/10000 the fund was not transferable due to it only being about half of what was rquired to buy the gmp. it would still have been nice to have a final letter from aviva, thank you for 28 years investment, here is your final bonus...this is your total fund...but your pension is the gmp and you can't transfer it anywhere else so we'll give you it, because we have to....or somthing like that....

Did you get the February added extra out of the blue 9% special bonus ? Did you get a breakdown of the final bonus?*

If the original transfer quote was early February, but the transfer didn't take place until after February, then the actual transfer may properly be 9% greater than they quoted.

*The breakdown of the final bonus might be more than 28 lines long in your case, wornout - one line of calculation for each calendar year's contribution to the policy x a set bonus %age for that year, plus possibly extra lines for bonus %age on special bonuses added to the policy e.g. bonuses on bonuses you may not have been expecting back nevertheless got added in 2008,2009, and 2010, plus bonus on maybe a Loyalty bonus or two, plus of course the recently announced February special 9% bonus across the board for their most favourite policyholders

Aviva don't seem to be in the habit of publishing the final bonuses for each year of contribution, and they vary between whichever with-profits "sub-fund" applies in your case (for a start on determining which brand of product yours might originally have been, click on "More" buttons near the bottom of the linked page).

As a flavour of what final (terminal) bonus is added for each year's contributions, see this example from their International With-Profits fund: http://www.international-aviva.com/AllLiterature/document,1669780,en.pdf

Final bonus rates for Sterling policies within that particular part of Aviva's With-Profits business were changed in July 2014 as follows:
The final bonus rate changes are detailed below.
Sterling
Year of unit
purchase
01/07/2013 01/01/2014
2013¨¨N/A-->3%
2012¨¨7%-->10%
2011¨¨7%-->10%
2010¨¨11%-->14%
2009¨¨21%-->25%
2008¨¨8%-->11%
2007¨¨0%-->0%
2006¨¨2%-->2%
2005¨¨11%-->13%
2004¨¨20%-->24%
2003¨¨28%-->32%
2002¨¨19%-->23%

So apart from regular bonuses (if you've been lucky enough to have some!) let's for arguments sake say you had been contributing £1,000 (not sure about tax relief implications so lets ignore that at the moment)

I know you've had the policy 28 years and the above table doesn't go back that far, but for someone who started paying £1,000 pa in 2002 then the main part of the final bonus would look like this:
2013¨¨3%=£30
2012¨¨10%=£100
2011¨¨10%=£10
2010¨¨14%=£140
2009¨¨25%=£250
2008¨¨11%=£110
2007¨¨0%=£0
2006¨¨2%=£20
2005¨¨13%=£130
2004¨¨24%=£240
2003¨¨32%=£320
2002¨¨23%=£230

That's £1,580 of normal final bonus. I can tell you I have seen UK pension policies which qualify for nearer 40% final bonus in some years of contribution. The highest in the above table is only 32%! Yours could be particularly interesting, especially if the bonus is payable on contributions grossed up by tax relief.

Then there may well have been special bonus added to our (and your) policy in 2008, 2009, and 2010 which would have together amounted to about another 10% on whatever your policy fund value was on 1/1/2008. I am not sure if you had to be in a particular sub-fund to qualify. If you did, you'll have received a good news letter in early 2008 about it. Or ask. And now (if we got those) our example is eligible for final bonus on that buckshee 10% as applied in 2008,9&10. Very roughly then, using our example policy starting in 2002, and the final bonus table above, that would mean we had around £6,000 of contributions by 1/1/2008, and by 2010 had received about 10% of that number as a special bonus totaling around £600 in three installments (don't ask me why they did that!). But now, at the end of the policy, our final bonus to be added to the £600 which will already have shown in our basic fund value since 2010, will now give us another approx. 16.125% (average of the 11%,25%,14% shown in the table for 2008/9/10) of the £600 i.e. £96.75

And we might have a £100 Loyalty bonus in there somewhere and let say that in the year we earned it and received an extra £100 to our basic fund (say 2009) they now give 25% final bonus on top, so that's another £25 we now collect.

So recapping using my limited example of a policy starting in 2002, our final bonus is £1580 + £96.75 + £25 = c. £1,700. But as of February 2015, that might not be all!

Lets assume that since 2002 in the example, our basic fund value after the addition of the annual regular bonuses and the windfall special bonuses in 2008, 9 & 10 and the Loyalty bonus in 2009, is 13 years x £1000 plus £600 plus £100 plus a bit for regular bonuses. Let's call it £16,000 basic fund value.

The policy reaches Normal Retirement Date. So they calculate the final(terminal) bonus. So they add £1,700, making £17,700 total which you can transfer out if you wish rather than leaving it with Aviva to take benefits.

But wait, you may be a favoured customer, so they suddenly have this year for the first time ever, found another 9% of £17,700 and slapped that on top! That means the transfer value is now £19,293. But it's not for everyone. Depends whether you responded to an approximate 2½% bribe in 2009 to give up your rights to it! And when I say favoured customer, but actually I have my tongue firmly planted in cheek because if you were one who refused the 2009 bribe or simply missed it, then you will not be on their Christmas List because they want you to be, you'll just be tolerated on it until you've gone. And they might even breathe a sigh of relief that you didn't stay another few years if they've been holding back more of the proceeds of the inherited estate which they have not admitted/used language to suggest there may be none. If you stayed longer they might have to add not 9% on top but some much bigger number.


Yes, they really do make it that complicated! And in your case they have had to fudge it further to arrive at the amount required to satisfy the GMP! I'd love to see the actual numbers ... especially since you are concerned about LTA - your basic fund numbers are probably at least an order of magnitude greater than my example, and your terminal bonus probably two orders of magnitude greater - especially if your are one of the favoured few

Don't let them fob you off though with complexity as a reason to be slow responding. You are at NRD. They owe you a particular duty of care at this time. This is not the time for them to be bvggering you about.

Do as SeniorSam suggested and indicate that if they don't get their skates on, it will indeed be the subject of a formal complaint. However, you don't really want it to be a formal complaint because the moment you make it one, they are likely to wash their hands of it as a routine customer service issue, and plonk it in the complaints domain where they give themselves a month to "investigate".

Good luck!

PS I don't know if your online messaging portal is as follows, but they have a secure email portal which they can register you to use and once you are registered and have activated it, you can correspond and request them to send scans of all documents/numbers you need via their secure email addresses which are generalised addresses that will have your policy number or complaint number in the title so your responses go to the right place. It may save you a day or two waiting for snail mail, although for some reason even secure email gets delayed by days sometimes or can be instant when they feel like it! The addresses are ahserv@aviva.co.uk for customer services, and ahcomp@aviva.co.uk for complaints, but note that they may not be much good for trying to send non-secure email (I haven't tried them, but they might probably bounce).

worn_out

Thanks agarnett (Alf) ...my s32 was a lump sum transfer back in 1987..with an assured sum of £32k, I had annual bonuses added in the early years amounting to £19k (heady days) making my guaranteed fund approx£51k..since then they changed tactic and said the 'true' value would in future be via a terminal bonus and not annual bonuses (because of the guarantees already in the policy)..it seems what I had was already well above the equivalent wpfund value...so in the following years no bonuses...then coming up to retirement day they gave me a retirement illustration, the 'open market transfer value' was around £62k.(but not guaranteed). Aviva wrote to me mid january telling me all this, but any 'open market option' provider had to at least pay me the gmp, so in reality no one else was going to buy the policy, and so there was no option but to stick with aviva and their in-house annuity They told me this 'fund' was not yet guaranteed as it would be recalculated on my actual retirement day (mid March)...but that was the last i heard from them apart from them putting in place my monthly pension payments. The last letter I received , after my complaint, was 2 weeks ago..and it was a letter not a statement, and that said my 'final' fund value was the same as that quoted mid january, ie £62k. in fact to the exact penny.

In theory therefor,the 'final bonus' was £11k, which as a % of £51k is around 20%..but it really makes little difference to my gmp because I would need a fund of around £140,000 at current annuity rates to pay me what the gmp pays....so there is no option to transfer, or cash in..but it is guaranteed for 5 years although no inflation will be added, which is not a problem at the moment...

I 've not had any bonus letters from aviva/norwich union since back in the 90's...well, only to say there is no bonus, but don't worry !

agarnett

Glad my extensive musings were of some assistance!

It sounds as if yours is one where the GMP far outweighs any of the musings about "bonus"

I would very much like to see some of the regular more knowledgeable types on the board confirm it for you though.

On the one hand we punters are all primed to believe that annuity rates are very very poor at the moment, and to be unable to tranfer out and to get locked into an existing provider deal is bad, but on the other hand, yours sounds like the very best kind of guaranteed arrangement where the actual fund, however it was comprised or contrived, simply may not matter! It is your pension which is guaranteed, not a fund value, and not an annuity rate applied to a fund value! Long may you live and prosper to enjoy it!

I hope I have not misunderstood, and again, I'd like to see more of the hard core regulars commenting, especially since you kindly laid out some numbers.

Some might say that you may be a lucky beggar with this one, and although beggars are advised not to be choosers, I do note that your pension apparently will not be index-linked or inflation proofed - I would myself be querying that. Obviously such a pension would cost even more than the £140,000 you have been advised as a real cost, but I'd be asking does not my GMP include some rule that gives me indexed revaluation in retirement?

And not forgetting your original question, someone should be able to indicate LTA implications.

Again, the pros on the board should be able to comment on both these things - this one might be right up dunstonh's street!