Pension Simplicity - does it have to be so difficult?

saver861

Doing some financial mopping up, Mrs Saver decided to access a small DB benefit from a short employment contract a while ago.

Got the forms today to be completed and signed:

- Personal Details Form
- Payment of Benefits Form
- Pension Scheme Regulations Form
- Conversion Option Form
- AVC Fund Options Form
- Member Declaration Form with Trivial Commutation Option Form
- Trivial Commutation Option Form

I mean ..... for real?

Now Mrs Saver is a smart woman ......... smarter than me. The fact that she married me demonstrates just how smart that woman is!!

However, all these forms with virtually no explanation ... she just looks at a few of them and throws them on my desk!

And to cap it all off, they did not even get the AVC amount correct. We have had to contact the PRU to establish the correct AVC total which was double what they had initially stated. I knew roughly how much was in the AVC but Mrs Saver would not have spotted it.

All those forms .... and incorrect information ....

It makes me wonder how many regular Jane's and Joe's out there are losing out.

Ganga

My wife had a similar situation, her pension company sent all the forms out which i helped fill in,they then replied saying " you have not completed form xyz " as it had not been included in the original pack she could not have done so we filled it in and returned it and eventually she got her pension under way but is it my suspisious mind or was it a delaying tatic on their behalf, i know it was not a fortune but if they did this with say 1000 customers and held on to £10000 from each for a couple of weeks,nice extra interest in the coffers

maxie014

Ive just started looking into me and the mrs pensions and for the everyday working man and woman,its damned hard to get your head round!
After a few weeks of reading again and again im finally starting to comprehend it mainly due to the posters on this site so thanks a lot.

dunstonh

but is it my suspisious mind or was it a delaying tatic on their behalf,

its not a delaying tactic. The omission of that form creates re-work and increased cost that will far exceed anything they may earn for the delay (and with occ schemes, they do not earn from it)

ut if they did this with say 1000 customers and held on to £10000 from each for a couple of weeks,nice extra interest in the coffers

However, 1000 customers creating rework at a cost of £25 a go would be £25,000. Plus, they do not earn interest on the money as its not sitting in an interest earning account. If its an occ scheme, like the OP, then there is no earning from it. If its a retail scheme then there is the annual management charge but the profit on that will be around 0.2% p.a. So, a 2 week delay may bring in £769 across those 1000 customers. Nowhere near the cost of rework

Rework costs are a major issue for insurers. Its finding the fine line between paying to get it right first time vs cutting costs and accepting x% of the work will require rework.

Ganga

Thanks for that information dunstonh,i did say that it was just me putting 2 & 2 together and coming up with 5,One way for the Pension companies to drive their costs down would be to double check what they send out but i suppose they are only human after all.

dunstonh

One way for the Pension companies to drive their costs down would be to double check what they send out but i suppose they are only human after all.

That would drive costs up. Historically, that sort of thing used to happen but with the continued drive to lower costs, they cannot afford to do that any more. Hence why I covered finding the balance between cutting costs and the amount of rework required because of that.

People generally want best service at as little cost possible. However, when push comes to shove, the average UK consumer will go for lower cost with poorer service. Some providers do fill the higher cost/better service gap. Some even manage to do it with their customers thinking they are low cost when they are not.

saver861

dunstonh wrote: »

That would drive costs up. Historically, that sort of thing used to happen but with the continued drive to lower costs, they cannot afford to do that any more. Hence why I covered finding the balance between cutting costs and the amount of rework required because of that.

Yes but its not just down to costs. If there are sufficient underlying quality procedures in place, the likelyhood of errors will be reduced. That does not mean higher costs, it means reduced costs.

However, the general ethos is to spend time fighting fire rather than strategy oriented.

And .... as it happens, I left off one form on the list in the OP .. the Retirement Checklist Form. Eight forms in the one envelope!!!!! That really should not be necessary - not to talk of the 'cost' of processing all these forms at the other end.

Not good ....

saver861

Ganga wrote: »

My wife had a similar situation, her pension company sent all the forms out which i helped fill in,they then replied saying " you have not completed form xyz " as it had not been included in the original pack...

As it turns out .... of the eleven pages in Mrs S' envelope there was still one missing which was the conversion options figures.

So not only did they send out a myriad of documents, even then they were not all there. That's apart from not having the correct AVC amount on the forms that were sent!

You could not make it up ... peeps would sure do well to check and double check their pension documents and subsequent decisions on information provided to them.

Ganga

One thing i have learned from both myself and my wife retiring is contact your pension provider at least 4 to 6 weeks before you intend to retire as it takes that long for them to process the paperwork and start payments.

LXdaddy

Ganga wrote: »

One thing i have learned from both myself and my wife retiring is contact your pension provider at least 4 to 6 weeks before you intend to retire as it takes that long for them to process the paperwork and start payments.

Really? That sounds optimistic from my current conversations with my company's pension administrators.


I asked some very specific questions about the functioning of the scheme and my options with a "for example retirement date of 30-Sep-16" and they had to do a proper illustration including actuarial assessment and it's taken about 2 months to get the basic data - if I was then going to execute they'd obviously need more time to actually put things into payment or transfer.

brewerdave

Ganga wrote: »

One thing i have learned from both myself and my wife retiring is contact your pension provider at least 4 to 6 weeks before you intend to retire as it takes that long for them to process the paperwork and start payments.

...we gave NHS pensions nearly 6 MONTHS notice of my wife's retirement at the end of March 2016 but we aren't expecting a pension payment til mid May !!:rotfl: