Pension Adminsitrator problem!

Womblesw20

Hi All


As a brief bit of background, when my mother moved house 2 years ago, we changed all her standing orders and bank accounts to reflect a new change of address - with the one exception - her private pension administrator. It was only when we were helping her to rearrange her finances (she is suffering with the onset of dementia) that we realised she hadn't received her pension payment for 7 months. It was easily missed as she receives a state pension and she's not spending much and the proceeds from her house sale have remained in her current account.


When I called her pension administrator, it turns out that they had mailed her and the mail was returned to them indicating she had moved. They chose to put an immediate stop on her payments. While I can understand the need for prudence here by the administrator, they made no attempt to trace my mother. Her bank details remain the same which suggests to me it wouldn't be that difficult to find her. Fortunately for her, she has sufficient funds to live comfortably on but what if she wasn't so lucky and had no family to help her out and spot the shortfall? This approach seems morally outrageous and completely ignores the pension holders welfare.


A couple of questions:
- Is she due interest on the outstanding benefit due? Or even compensation?
- Is the approach widespread and if so, should this be reported to FOS / FCA?

Thanks!

dunstonh

While I can understand the need for prudence here by the administrator, they made no attempt to trace my mother.

They would have done eventually. These things get trigged after a period. However, to do such a thing costs money and most people not getting an income would contact them pretty quickly.

- Is she due interest on the outstanding benefit due? Or even compensation?

They will pay her the money that she is due. Not sure why any compensation is required.

- Is the approach widespread and if so, should this be reported to FOS / FCA?

it is not the remit of the FOS and the FCA do not get involved in individual consumer issues (even assuming it falls under FCA regulation and not the pensions regulator).

There isnt anything here to interest a regulator. However, you may wish to have a word with her carer or the person responsible for her finances this as they dont appear to be a bit lax on this. You may want to take on some of that responsibility now that you realise that neither your mum or whoever the other person was that helped is not able to keep on top of things.

xylophone

It is the responsibility of the pensioner to keep the administrator updated with change of address details.

The administrator was protecting your mother/ her estate had she died, from a possible overpayment or the risk of fraud.

I am not sure that nowadays banks are quite so helpful in contacting customers on behalf of third parties/passing on letters etc - data protection is cited?

And I imagine that if a person had been in such circumstances that every penny was accounted for, then the lack of a pension payment would pretty soon have been noticed, either by the recipient or a carer?

agarnett

I think that in our world where communication of desired information is instant, it is pretty inexcusable for financial services providers to use the first piece of returned post as a reason to shut up shop and enjoy enhanced cashflow until someone notices.

We have such things as National Insurance numbered files which pension providers have easy access to check if they have the will. There's nothing expensive about it.

I don't understand the suggestion of there being valid excuse in providing some protection against fraud in this case. Fraud by whom against whom? The pension was being paid into a pensioner's bank account. Bank accounts don't change names when a customer changes address. The bank account belongs to the individual not to their old address, of course It cannot be accessed by any new occupier of an address.

Pensions in payment are to be paid regularly for life, not stopped at the whim of providers on a lame excuse like this. Whilst it is not ideal for a provider not to have the latest address, it is in no way essential. The only things a provider needs is notification of

1. change of tax code (they should get that automatically from the tax office)
2. change of payee bank account
3. death.

part of the problem in the UK is that still in 2015 despite congratulating ourselves constàntly on being a country that has mastered computing to the degree that they make billions in trading profits for us and our pension funds in milliseconds, we have no slick centralised system of keeping tabs on citizens' official address for correspondence, and automatically updating it from the government database.

Actually it is laughable, and if our "tracing agent" regime activities were generally known by some of our friends in Europe, we'd be a laughing stock!

Is it really true that when

• someone changes their official address in UK, or
• they die

that someone must notify all their service and utility providers separately?

Doesn't the government database do all that simultaneously? No?

Really?? Hahahahahahaha!

I can only assume, perhaps as the OP has assumed, that it suits money paying UK financial service providers to have the excuse of "losing trace" of a customer as a lucrative aid to their own cashflow and investment income.

In the same way, I also assume it suits pension providers to be able to keep our fund values before retirement, and bonuses and projections, illustrations, forecasts and deficits behind a veil of convenience not hampered by compulsory registration to transparent centralised instant 24/365 government provided website access to every individual citizen's personal portfolio. That would so "inconvenient" to City fraudsters (the ones we never lock up and who pay fines for their misconduct using our money) wouldn't it?

I think instead of tolerating streams of lame excuses for holding on to our money (dunstonh says "they would have done eventually" {bothered to trace and start paying again}) it is time a few tables were turned against such "service". The oft-quoted overpaid in the pocket of the City regulators would be interested if we required them to be. They won't otherwise - they already have enough trouble remaining on friendly terms with their City mates so they walk into their next City job with minimum fuss, without us asking them to have a heavier touch during their stint :mad:

hyubh

agarnett wrote: »

I think that in our world where communication of desired information is instant, it is pretty inexcusable for financial services providers to use the first piece of returned post as a reason to shut up shop and enjoy enhanced cashflow until someone notices.

Do you quite realise how jejune you rhetoric can appear to others? If providing an ad hoc tracing service is so cheap and easy, go into competition with Tracesmart and co. - you could make a packet!

agarnett

hyubh wrote: »

Do you quite realise how jejune you rhetoric can appear to others? If providing an ad hoc tracing service is so cheap and easy, go into competition with Tracesmart and co. - you could make a packet!

Jejune, eh? Aren't you the teenzy bit embarrassed that might have been an unfortunate word for your oversimplistic response? I wasn't advocating that tracing was easy for Tracing Agents in the UK, although I am quite sure it is quite lucrative, and that the UK is actually a Tracing Agent's WetDream! There is little scope for tracing agents to do business in those countries where citizens records are kept up to date centrally.

I suggested pension providers (who are not tracing agents of course) nevertheless have special access to our National Insurance and tax records. How is it difficult therefore, for them as pension providers to co-ordinate addresses with those two government departments?

Our primary personal data records e.g. of our main address where we may be served official correspondence, should not be so out of central government control, but clearly if this pension provider and other posters are to be believed, then it is, and it's the UK norm.

Furthermore, we read it here first that "carers" are the responsible data-controllers who should contemplate their failures to mind-read - maybe the ICO should hunt them down and fine them for involuntary neglect of administration duties whilst associated with a partially gaga parent :rotfl: (Just to be clear, I regularly contemplate the exact same thing, and also how long it will be before my kids have to contemplate it about me!)

Drp8713

This is standard practice across every pension administrator I have ever worked for.

It is the member's responsibility to inform the scheme of changes of address and their next of kins responsiblity to inform the scheme after death.

If post is returned or payments bounce back they will of course suspend to prevent fraud or overpayments.

If the person is alive they will notice that its stopped and get in contact, it will then be reinstated.

How would you like the scheme administrator to trace people who dont update their addresses? Why would you assume they have updated their address with the bank or DWP if they havent with the pension scheme?

Nearly all schemes do mortality screening now. If the person has died they will find out, if they have not died then them or their carers should contact the scheme.

Womblesw20

Thank you all for your posts - good to get different perspectives. While I am obviously biased here it feels to me that to stop a pension payment on the basis of the receipt of returned post is an extreme reaction.

I work for an insurance firm and if I proposed and implemented a similar course of action, I'm sure I would get slaughtered on TCF grounds. While it maybe a standard practice in the industry, it doesn't mean it's right and seems immoral to me - especially if there has been no reasonable attempt to locate the pension holder. Pensioners are some of the most vulnerable members of society and due care required when dealing with them.

To quote RPPD Principle 6 – ‘A firm must pay due regard to the interests of its customers and treat them fairly, this certainly doesn't put my mother interests at the heart of how this firms does business...

System

Hi

Standard practice to stop paying a pension on a bounce back from the bank, and / or a returned payslip (YES some pension places send out a monthly payslip) via Royal Mail.

Write out to the last known address, add them to the list of traces requested from DWP, (rather slow but usually fruitful), consider old employer as there may be colleagues who are aware of their former colleague's status.

This practice is included in some newsletters sent out by pension payers, perhaps even mentioned on payslips occasionally.

Some even use Club Vita, which cleans up old records. An example is that there is a section called Living Dead, where the record is still open but a funeral has been recorded that matches the details.

So another thread to follow to ensure payment is made to the correct person / estate and not to a fraudster.

woolly_wombat

Drp8713 wrote: »

This is standard practice across every pension administrator I have ever worked for.

With the government looking to make more welfare savings, I think we can expect more compulsion in future to unite pensions with rightful recipients, and a couple of articles demonstrate the thinking of current and former pension ministers:

http://www.telegraph.co.uk/finance/personalfinance/pensions/11023515/Pension-funds-sitting-on-millions-owed-to-widows.html

"At present up to £3billion is estimated to be lying unclaimed in pension pots across the UK, with the benefits going to the large investment funds that control them."

Steve Webb expressed particular concern over widows missing out because they were not aware of their entitlement.

FT Adviser also covered the story:
http://www.ftadviser.com/2014/08/14/pensions/widows-missing-millions-in-unclaimed-pension-funds-gKhO4LE2QD1iPsMqEfaYxH/article.html

Ros Altmann echoed Steve Webb "it is certainly a problem that many people lose track of old pension entitlements. And, especially if husbands have passed away, widows will often be left without anything from their husband’s pension unless they are aware of what his entitlement was."

FT Adviser view:
"Tony Larkins, managing director of Cambridgeshire-based Beacon Wealth Management, said: “It is bound to happen as people are unlikely to know the details of their spouse’s pensions, if they are in or have been transferred. There should be a general register where pensions are linked, according to national insurance numbers, to help people in these instances.”

Expect more action!

WW

woolly_wombat

Womblesw20 wrote: »

I work for an insurance firm and if I proposed and implemented a similar course of action, I'm sure I would get slaughtered on TCF grounds. While it maybe a standard practice in the industry, it doesn't mean it's right and seems immoral to me - especially if there has been no reasonable attempt to locate the pension holder. Pensioners are some of the most vulnerable members of society and due care required when dealing with them.

Hear hear!

WW