Aviva/Norwich Union Section 32 Buyout policy holders?

tempus_fugit

towag wrote: »

Have you written to Phoenix/NPI and challenged it? Does it say anywhere in your policy that they can opt out of paying your pension from 60? Read it carefully, you may surprise yourself and even get your pension backdated till 60.... If you don't try you will never know... What do you have to lose? Possibly quite a nice sum of money previous to your gmp if it is as good as you say it is....

No I haven't as yet but to be honest they haven't said that it will be delayed until age 65 yet either. I am just assuming that will be the case as it seems that most of these policies have not performed well enough to get an earlier payout or any kind of lump sum. And yes, it does say in the policy that they can delay it until they can meet the GMP from the funds. But if that is what happens I will certainly be talking to them about it. To put you in the picture I am 56 currently and the GMP is about £5,300, which compared to some of my pensions is not bad at all. I will be asking them about the prospects of earlier payout nearer the time as I still have a few years to go yet before I reach 60.

xylophone

I took out my s32 in 1995 because I was made redundant and could no longer participate in the company scheme.

You were not offered the option of becoming a deferred member of the scheme?

dunstonh

towag wrote: »

Yet I received nothing from Aviva explaining any pension review at the time.... I would have read and kept them in my folders ... I would think that anyone like myself who was self employed was far too busy working their buts off to earn a decent crust, so would not have heard or even know about it....

Did Aviva sell you the plan?

Typically it was a questionnaire. Sent multiple times to non-responders. Actively followed up and case closed if you refused to fill it in. It only applied to advised cases (not non-advised). Firms had to report their progress to the FSA and continue until all had been contacted.

It was for all pensions sold between 1988 and 1993. By 1995 new rules had come in that addressed most of the issues.

towag

waterstar wrote: »

I am not involved in the pensions industry and i defer to the many experts i see writing on this forum, my only interest is as a s32 policy holder.

I suggest most, if not almost all, would " have been better off leaving them in their respective pension funds ".

My understanding is that there are many reasons which contribute to this difference in outcome, including:

1. mis-selling when the policy was taken out, for which some policies holders have received redress from their IFAs around about 10 years or so ago
2. dramatic changes on the inflation and rates of return landscape from when these policies were typically taken out circa 1990,
3. possibly poor performance relative to market from Aviva in the management of its with profits funds
4. significant changes in life expectancy

My sense is that mis-selling, which arguably includes that the individual opting to leave a company pension scheme should have been fully informed by their IFA that they were giving up reasonable certainty in a Company Scheme and taking on the risks associated with points two, three and four above, is a major contributor to the calculation underlying any assessment that they would " have been better off leaving them in their respective pension funds ".

That is why I do NOT trust IFA's. Albeit with the so called "qualifications" needed and the clean up their industry "supposedly" went through. In my opinion they are no more than very expensive glorified salesmen for the financial, insurance and pension industry which saves money by not employing people to honestly advise on their products, yet recommends you refer to your IFA etc etc... I personally feel the whole industry needs a complete and total overhaul and a dam sight more cleaning up..... To me it's just a necessary evil that those who don't have a clue about will have to rely on..... And an IFA!!...
I am reliably informed the cheapest rate is about £150 an hour?.... (Sorry dunstonh, or any other IFA on the forum membership, but I would hazard a good guess that's how most people feel?)

Waterstar, with the points you make above, it also goes to show that the companies who "offered" these products are really no better than legalised gamblers who thought they were going to make a killing in the long term, but it never quite came off for them, which is wrong and badly detrimental to the many thousands of people who trusted these companies by taking these policies out in the first place.... The main reason? To SAFEGUARD their old age and live in some kind of dignity...

towag

dunstonh wrote: »

Did Aviva sell you the plan?

Typically it was a questionnaire. Sent multiple times to non-responders. Actively followed up and case closed if you refused to fill it in. It only applied to advised cases (not non-advised). Firms had to report their progress to the FSA and continue until all had been contacted.

It was for all pensions sold between 1988 and 1993. By 1995 new rules had come in that addressed most of the issues.

No, I did NOT receive anything like that, The plan? It was as far as I knew then, an IFA, but lucky for him he's dead now....!!

dunstonh

In my opinion they are no more than very expensive glorified salesmen for the financial, insurance and pension industry which saves money by not employing people to honestly advise on their products, yet recommends you refer to your IFA etc etc..

An IFA is employed by the client and paid by the client. A tied agent is employed by the insurer/provider. Yet the vast majority of historical issues have come from the tied agents. The reason that some say see an IFA is because most dont operate their own salesforces any more. Those that do, do not tell you to see an IFA. They want to sell their own product and an IFA is unlikely to recommend their product (in a large number of cases).

I personally feel the whole industry needs a complete and total overhaul and a dam sight more cleaning up.....

What would you do then?

To me it's just a necessary evil that those who don't have a clue about will have to rely on..... And an IFA!!...

You mean the IFA who is qualified and experienced to go things you dont know how?

I am reliably informed the cheapest rate is about £150 an hour?.... (Sorry dunstonh, or any other IFA on the forum membership, but I would hazard a good guess that's how most people feel?)

Your reliable source is not reliable. The vast majority of IFAs do not charge by the hour. Consumers generally do not like hourly pricing. Of all the options, it consistently comes up as the least preferred. Fixed fee is increasingly popular nowadays.

Waterstar, with the points you make above, it also goes to show that the companies who "offered" these products are really no better than legalised gamblers who thought they were going to make a killing in the long term, but it never quite came off for them, which is wrong and badly detrimental to the many thousands of people who trusted these companies by taking these policies out in the first place.... The main reason? To SAFEGUARD their old age and live in some kind of dignity...

it should be noted that we have had several threads recently (and one active one on the go currently) where posters want to transfer out of DB schemes as they think they can do better. Many fear a repeat where people take money out of DB schemes and then years later realise it was the bad thing to do. Despite the vast majority of posters on the threads telling them that it is wrong, they still refuse to accept that and some even turn on the IFAs for telling them that. Damned if you do. Damned if you dont

tempus_fugit

xylophone wrote: »

You were not offered the option of becoming a deferred member of the scheme?

Not as far as I remember, no.

towag

tempus_fugit wrote: »

No I haven't as yet but to be honest they haven't said that it will be delayed until age 65 yet either. I am just assuming that will be the case as it seems that most of these policies have not performed well enough to get an earlier payout or any kind of lump sum. And yes, it does say in the policy that they can delay it until they can meet the GMP from the funds. But if that is what happens I will certainly be talking to them about it. To put you in the picture I am 56 currently and the GMP is about £5,300, which compared to some of my pensions is not bad at all. I will be asking them about the prospects of earlier payout nearer the time as I still have a few years to go yet before I reach 60.

If they've written that into your policy, then it maybe they will do so.... Whether the fund has performed well or not, is not the point being made by many Aviva S32 holders. World giants like Aviva (worth trillions) are in fact penny pinching, by making excuses by not paying out what to them, amounts to peanuts. It is wrong, morally and ethically. It's about the wording and the trust given to them which really amounts to the the policy holders money they have gambled with and hasn't paid off for them. So instead of doing the right thing, they use an opt out acting outside of the policy wording . Do they really have the right to renege on paying out at 60 and hoping that the policy holders will be satisfied waiting till they are 65 for the GMP? Me thinks not when there is a sizable sum that could have been had if people are on a low or modest income.
It maybe the fund your're in has done better and they will pay out....You have a way to go yet, but I hope it turns out better for you when you hit 60... As far as I'm aware they will send you a standard warning letter 6 months before your benefit or pension date telling you what arrangements you need to make....

towag

dunstonh wrote: »

An IFA is employed by the client and paid by the client. A tied agent is employed by the insurer/provider. Yet the vast majority of historical issues have come from the tied agents. The reason that some say see an IFA is because most dont operate their own salesforces any more. Those that do, do not tell you to see an IFA. They want to sell their own product and an IFA is unlikely to recommend their product (in a large number of cases).



What would you do then?

Study more about it so I have more awareness as to the shenanigans IFA's have got up to in the past and have now come to light....



You mean the IFA who is qualified and experienced to go things you dont know how?

But can learn from experience...?



Your reliable source is not reliable. The vast majority of IFAs do not charge by the hour. Consumers generally do not like hourly pricing. Of all the options, it consistently comes up as the least preferred. Fixed fee is increasingly popular nowadays.

And what would that be exactly?.....



it should be noted that we have had several threads recently (and one active one on the go currently) where posters want to transfer out of DB schemes as they think they can do better. Many fear a repeat where people take money out of DB schemes and then years later realise it was the bad thing to do. Despite the vast majority of posters on the threads telling them that it is wrong, they still refuse to accept that and some even turn on the IFAs for telling them that. Damned if you do. Damned if you dont

That's exactly what I expected from an IFA... Damned if you do, Damned if you don't.... Maybe that is why the whole industry needs to be cleaned up by people like yourself if you are so damned?...
Is it likely?.... I don't think so....

DaveMcG

towag wrote: »

No, I did NOT receive anything like that, The plan? It was as far as I knew then, an IFA, but lucky for him he's dead now....!!

A transfer only plan wouldn't necessarily have received a questionnaire. It could have been reviewed from file information. Your policy would have been reviewed in a second phase for those under age 50 at time of transfer, around 1999/2000 or so.

There is a possibility that due to the guarantees with the fixed GMP revaluation the policy would have been projected to provide benefits of greater value than had it been left with the original scheme. This would have meant that no redress was due.

What was the deferred pension amount transferred from the scheme? Multiplying it by 1.025 for each year until your 60th birthday will give you a very very rough* idea of what would have been available from the scheme at that age. You can then compare that with what the s32 pension was at that age.


*obviously to do that properly you would need the scheme's revaluation policy and the relevant factors for each year.