Can this be right?

Su.e

Today someone contacted me by telephone from MyCSP. They informed me that it was an HMRC rule that I should pay up to 55% tax on the refund. I patiently explained the situation that I had already explained by letter and said that if they had not delayed for 28 months it would not have been an unauthorised payment but part of the lump sum commencement of pension tax free payment. The young man then said the delay was because they had requested my decree absolute and not received it. He went on to say that they had written to me in May 2014 asking for this. I said I had received no such letter. He told me the address they had sent it to which was an address I had moved from the previous year. They were aware of this because I had a letter from them in November 2013 acknowledging receipt of my change of address. I also received the form asking my me if I wished to claim the WPS refund in May 2014 at my current address and other communications from them. He maintained that there was nothing they could do about the taxation of the payment and asked me if I wished to make a complaint so I said I did because it was not my fault that I had not received the letter since they sent it to the wrong address. I also questioned why if they needed my decree and I hadn't sent it to them, they had not queried this a few weeks later. He couldn't answer that question and said he would open up a complaint and then hung up. So now what? Will I receive a complaint form or should I write to them again or go straight to the ombudsman?

xylophone

See
http://www.civilservicepensionscheme.org.uk/complaints/

http://www.civilservicepensionscheme.org.uk/employers/employer-pension-guide/disputes-appeals-and-complaints/

hyubh

Su.e wrote: »

Will I receive a complaint form or should I write to them again or go straight to the ombudsman?

Not the latter - the Ombudsman won't get involved until you have gone through the internal complaints system:

http://www.pensions-ombudsman.org.uk/our-service/personal-and-occupational-pensions/individuals-pension-scheme-members/

The 'Internal Dispute Resolution (IDR) process' that link refers to is something the civil service scheme will have.

That said, for a flavour of the Pensions Ombudsman's rulings, see here:

http://www.pensions-ombudsman.org.uk/our-decisions/?year=2015&s=civil+service

The fact you have proof the administrator knew of the change of address seems a significant point to me.

atush

Yes, you will have to make a formal complaint.

But from what you have told us, you have all the proof you need to win.

Good luck and let us know how you get on.

Su.e

I have finally received a letter from MyCSP and this is what it said:-

Dear Ms B

Thank you for contacting MyCSP in relation to your complaint regarding your widows Pension Scheme (WPS) refund, and the numerous calls you had to make during this time. I can assure you that this is not the level of service we would wish to provide to our members.

Your WPS refund normally forms part of your pension benefits. HMRC legislation states that administrators have 12 months to make any additional payments that may be due to you following the commencement of your pension. Any lump sums, such as your WPS refund, which are not paid as part of a pension, or within this 12 month period, are usually "unauthorised payments". Unauthorised payments are liable to a tax charge.

Regrettably MyCSP issued a letter dated 18 August 2014 requesting a decree absolute to your old address. Due to this oversight you believed that your WPS refund had been paid together with your pension, which resulted in the refund missing the 12 month period. However, in certain circumstances, MyCSP may consider an ex-gratia payment. Please provide documentary evidence.

I would like to apologise for the frustration and inconvenience caused and thank you for taking the time to bring your concerns to my attention. We welcome all customer feedback as this provides us with a valuable insight into our services from the customer's perspective and can assist service improvement, as it has done in this case.
_______________________________________________________________________________

As it doesn't state what documentary evidence they require I have sent them a copy of my decree absolute and a copy of the letter I received from them in November 2013 acknowledging the receipt of my change of address.

I really don't think they sent the request for the decree absolute at all - Why would they send it to my old address 9 months after they had acknowledged receipt of my new address? Added to that; I had my mail redirected for 12 months so it should have been delivered to my new address in any event. I just feel as though they are trying to cover up their incompetence. The wording of the letter gave me the impression that the blame for the delay was being shifted onto me. Perhaps I'm being paranoid?

I am not completely clear what an ex-gratia payment is in this context. I know that it is a payment that they are not legally obliged to make and that it is a goodwill gesture. Can I expect to receive the full amount of the WPS refund in the form of an ex-gratia payment or could it just be a small amount as an apology for my frustration and inconvenience?

Would be grateful for any comments.

Su.e

Ok I have had a call from MyCSP. It seems they are now going to recalculate the amount of the refund as it has accrued a bit more interest and put forward a case for an ex gratia payment. The man I spoke to said they would have to calculate that as well. I asked the question whether it would be a token gesture for my inconvenience or for the full amount of the lump sum and he replied that he didn't think they could do the latter. I really don't see why not; if they had paid me the refund as a lump sum when they should have done there would be no tax due. So, since it was due to their error that they didn't why can't they just make an ex-gratia payment for the whole lot and save me yet more inconvenience of having to notify HMRC of the matter? Can anyone advise me about this please because I haven't a clue.

jem16

Su.e wrote: »

I really don't see why not; if they had paid me the refund as a lump sum when they should have done there would be no tax due. So, since it was due to their error that they didn't why can't they just make an ex-gratia payment for the whole lot and save me yet more inconvenience of having to notify HMRC of the matter? Can anyone advise me about this please because I haven't a clue.

I think you have to make this perfectly clear to them that you are not going to accept anything less than the full amount as it was their error. Advise them that you will take it to the Ombudsman.

atush

I agree, ask for the tax payment amount in full, at the very least.

I would expect you to get an additional payment on top for your time and inconvenience.

Include proof that you forwarded your mail for 12 months in your documentation, as well as proof they had the correct address (all correspondence from Nov 2013 onwards.)

Su.e

I think you have to make this perfectly clear to them that you are not going to accept anything less than the full amount as it was their error. Advise them that you will take it to the Ombudsman

I think I will write to them again and make it clear that this is what I want. Not sure I kept the receipt for the mail forwarding but I will check tomorrow.

atush

If you didnt, try your post office as they might have a record?

Or any envelops from other parties you have retained (with forwarding on it)?