Section 32 - Grounds For Compensation?

wary

Back in 1994, my department were outsourced to another company and we became their employees. Can’t remember if other pension options were available but the two main ones were to transfer our existing DB pension to the new company’s DB scheme or to transfer to some kind of personal pension. Being young & naive, I elected to go for the latter and he set up a Prudential Section 32. This is guaranteed to pay £2700 pa when I turn 60 whereas I would have been far better off transferring into the new company’s scheme (possibly up to £5000 pa).

Can’t say that he pushed me in this direction but he must have known I’d be far worse off for it and at no point did he highlight this to me.

I’ve recently become aware that most S32 sales between 88 & 94 were reviewed around 1994-2000, but I did not receive any kind of questionnaire. (One may have been sent but I was living out of the country for some of that period and was slack at providing a forwarding address, although most mail should have been forwarded.)

Question is, given the brief details above and the length of time involved, do I still have grounds, and indeed a reasonable chance of success, for pursuing a mis-selling claim? If so, presumably it wouldn’t be against Prudential but the company who had been brought in to transfer our pensions out of the original company’s DB scheme? Would I be able to refer it to the Ombudsman if need be?

dunstonh

Can’t say that he pushed me in this direction but he must have known I’d be far worse off for it and at no point did he highlight this to me.

Advised or non-advised sale?

I’ve recently become aware that most S32 sales between 88 & 94 were reviewed around 1994-2000, but I did not receive any kind of questionnaire. (One may have been sent but I was living out of the country for some of that period and was slack at providing a forwarding address, although most mail should have been forwarded.)

Or you did not meet the criteria. e.g. if it was non-advised.

Question is, given the brief details above and the length of time involved, do I still have grounds, and indeed a reasonable chance of success, for pursuing a mis-selling claim?

Not enough info to know if you have a case. If it was non-advised then almost certainly no chance. If it was advised then you should have been contacted.

presumably it wouldn’t be against Prudential but the company who had been brought in to transfer our pensions out of the original company’s DB scheme?

Pru are only responsible for the actions of their employees. if no employee gave advice then they have no liability. It all comes down to whether you saw an IFA and got regulated advice or whether you just ticked the box to select the option.

wary

Thanks for the info, DunstonH.

A long time ago now so my memory is hazy, but it was more than simply ticking a box on a form as we each had multiple 1:1 consultations with this guy. He was originally planning to transfer it into a personal pension DC plan, with me being a single lad. It was only when he discovered that I was likely to soon get married that he decided that S32 would be a better option. So there was a certain amount of him assessing my personal circumstance and deciding my best course ... but on the crucial point of whether I should transfer out at all, he offered no advice and didn't even highlight this was not the better option.

So I'm not sure whether this constitutes an "advised" or "non-advised" sale, and whether there was an obligation on him to advise me (or at least point out the downside) on that crucial point.

If I decide to contact the company to at least determine why no questionnaire was sent, presumably Pru can (and are obliged to) provide the contact details? Is this company then obliged to provide me with all paperwork relating to the transfer/sale (assuming they still have it some 22 years later) and should this clarify whether it was advised or non-advised?

dunstonh

If I decide to contact the company to at least determine why no questionnaire was sent, presumably Pru can (and are obliged to) provide the contact details?

They can tell you the details of the servicing agent.

Is this company then obliged to provide me with all paperwork relating to the transfer/sale (assuming they still have it some 22 years later) and should this clarify whether it was advised or non-advised?

If you pay your £10 and do it under a subject access request then yes. Or you can ask them nicely to send you a copy of the reasons why letter as you have mislaid yours. A reasons why letter would have applied to an advice case but not a non-advised case. So, that would answer your question.

minty777

I have a mis-sold/advised section 32 and had a compensation policy set up in c2000.It was not an automatic review and i had to push for it using the FSCS or another government body set up at the time who reviewed mis-sold/advised scemes were the original firm giving the advice had closed down.

DaveMcG

Questionnaires weren't sent out for the review of transfer plans. If the Pru were responsible for the sale they would have carried out a loss test based on the FSA assumptions at the time. Either there would have been no loss under these assumptions or redress would be due by way of a top-up to the policy. You would have been informed by letter.

If an IFA was responsible they may have maintained that the sale was compliant. You should have received a letter to this effect. If the IFA decided that compensation should be applied to the policy, they may have required your authority to apply this.

If you were untraceable during this period Prudential and the IFA may have closed their reviews, as they couldn't get your acceptance of any offer of redress.

As suggested above the first action should be to find out who was responsible for the sale. If it was the Prudential, then it should be relatively easy to establish the result of the review, however you might find it much more difficult if an IFA was involved.

wary

Thanks all for the responses.

An update on this ...

... Pru has confirmed that the policy was sold by my original employer's own Financial Advisers. Is it of significance/relevance that the transfer out & S32 selling was handled by my employers own advisers rather than an IFA? ... wrt whether I should have subsequently received a letter relating to compensation or indeed my case for compensation?

Also, I recall the adviser saying that he was working on a non-commission basis yet Pru has confirmed that a significant amount was paid. To comply with financial regulations, should I have received documents stating clearly how much commission was being paid etc back in mid-1994, as a part of the transfer?

dunstonh

Is it of significance/relevance that the transfer out & S32 selling was handled by my employers own advisers rather than an IFA?

Again, comes back down to whether it was advised or selected from the list of available options.

Also, I recall the adviser saying that he was working on a non-commission basis yet Pru has confirmed that a significant amount was paid.

Maybe the adviser in question was on non-commission basis. However, it doesnt mean the employer was.

To comply with financial regulations, should I have received documents stating clearly how much commission was being paid etc back in mid-1994, as a part of the transfer?

Yes. it would have appeared on illustration. However, the way it was disclosed would have been different for IFAs and tied agents.

wary

Thanks once again for the info.

Next step will be to issue a SAR. Questions please:
- for what length of time are they legally obliged to retain info relating to my individual pension in their own company scheme? ... and also relating to the S32 sale or indeed any compensation letter that may have been sent?
- do they only need to provide info that goes back so far (i.e. is there a cut-off) even though they may actually hold relevant info that goes back beyond this?
- can someone point me to a good template letter, or provide some relevant tips, for writing a SAR letter that specifically relates to this kind of request?

Thanks

dunstonh

- for what length of time are they legally obliged to retain info relating to my individual pension in their own company scheme? ... and also relating to the S32 sale or indeed any compensation letter that may have been sent?

They are not required to retain any info legally.
Nowadays, a firm would retain info indefinitely. However, data storage for sales and purchases over 20 years ago can be patchy.

- do they only need to provide info that goes back so far (i.e. is there a cut-off) even though they may actually hold relevant info that goes back beyond this?

You will get information held in a relevant filing system. Age isnt the issue. Where it is stored is.

- can someone point me to a good template letter, or provide some relevant tips, for writing a SAR letter that specifically relates to this kind of request?

https://ico.org.uk/for-the-public/personal-information/