Personal Pension Mis-selling Review

wary

In brief, mid-1994, my employment was transferred from company A to company B. I was given the option of transferring my DB pension either into company B’s DB scheme or into some kind of personal pension (leaving benefits accrued to date in company A’s DB scheme was not an option). I elected for the latter believing all things were equal and following a consultation period with company A’s financial adviser, it was transferred into a Section 32 … and I have recently become aware that I’ll be far worse off for it.

I also recently became aware that under the personal pensions mis-selling review, financial advisers who sold S32s in this way between 1988 & 1994 were compelled to contact all customers to see if they wish to pursue a mis-selling claim. Because I was not contacted at the time, I was hoping that the length-of-time would not deter the Ombudsman from taking on my complaint (I’m currently at the fact-collation stage) …

However, I’ve now seen that the personal pensions mis-selling review “… was aimed at people wrongly sold personal pensions between 29 April 1988 and 30 June 1994.” In my case, I left company A in May 1994, there was then a 2-month consultancy period with company A’s advisers until the end of July 1994 (I think I signed the S32 forms then), and the S32 sale was completed later that year (possibly October).

So do these timings mean that there was actually no need for them to contact me under the mis-selling review and hence my case is much weaker as the sale was completed after 30/06/1994? Or does that make no real difference and would it even be a relevant argument that the actual selling process commenced before that date?

Couple of other points which may add to my case, possibly …

In mid-1994:
1) Were advisers legally compelled to provide in writing details of any commission that would be received for the sale?
2) Company A transferred our employment to Company B. Under that circumstance, was it legitimate for them to insist that we were not allowed to leave our benefits accrued to date frozen in their own DB scheme?

Thanks

Kynthia

Regarding your second question. Was everyone told they couldn't leave their pensions deferred with company A or was it because you didn't have the minimum service to qualify for a preserved pension with the scheme? Many DB schemes have a minimum service and if you leave before that you are either refunded your contributions or you had a window of time to transfer both your and your employer's contributions to another pension. This minimum used to be quite a long time in some schemes, such as 5 years in one I know.

dunstonh

So do these timings mean that there was actually no need for them to contact me under the mis-selling review and hence my case is much weaker as the sale was completed after 30/06/1994?

If the date of application was not in that period then they do not have to contact you.

You would expect a post June 94 case to be weaker to complain about because at that point they knew what the issues were and it was a hot potato. It would be like selling PPI today. You would think they would take a lot more care.

1) Were advisers legally compelled to provide in writing details of any commission that would be received for the sale?

commission disclosure was required from 1995.

2) Company A transferred our employment to Company B. Under that circumstance, was it legitimate for them to insist that we were not allowed to leave our benefits accrued to date frozen in their own DB scheme?

If it was factual then yes. If not, then no.

wary

Kynthia wrote: »

Regarding your second question. Was everyone told they couldn't leave their pensions deferred with company A or was it because you didn't have the minimum service to qualify for a preserved pension with the scheme? Many DB schemes have a minimum service and if you leave before that you are either refunded your contributions or you had a window of time to transfer both your and your employer's contributions to another pension. This minimum used to be quite a long time in some schemes, such as 5 years in one I know.

Thanks. Everyone was told this regardless of their length of service, and I remember that most were very unhappy because the new pension scheme was inferior.

wary

dunstonh wrote: »

If it was factual then yes. If not, then no.

Thanks DunstonH. Looks like the timing is against me then, but I'll persevere.

Sorry but I don't understand your response to my query, as to whether it was legitimate for Company A to insist that as part of our transfer of employment to Company B, we were not allowed to leave our benefits accrued to date frozen in their own DB scheme. Please can you clarify what you mean be "If it was factual"?

Thanks

dunstonh

Sorry but I don't understand your response to my query, as to whether it was legitimate for Company A to insist that as part of our transfer of employment to Company B, we were not allowed to leave our benefits accrued to date frozen in their own DB scheme. Please can you clarify what you mean be "If it was factual"?

If they were telling porkies and you could leave it then its wrong.
If they were telling the truth and you couldnt leave it then it cant have been mis-sold in that respect.

wary

dunstonh wrote: »

If they were telling porkies and you could leave it then its wrong.
If they were telling the truth and you couldnt leave it then it cant have been mis-sold in that respect.

Thanks. It was the company's own financial advisers who told us this is not an option.

That's got me thinking as most companies would probably be keen for you to transfer out of their DB scheme once you'd left their employment, so there has to be rules that give you the right to remain. Indeed I've just looked online and it says "If you’ve been a member of a defined benefits pension scheme for at least two years, you must be given the option to leave your benefits in the scheme."

So how would it be legitimate that they could refuse this option to us? Maybe it is different when one's contract of employment is transferred in this way? Or maybe rules were different in 1994?

Kynthia

My DB pension scheme requires 2 years service now but it was 5 years in the 80s. I think sone private sector ones were even 10 years a long time ago. So these scheme rules differ between schemes and can change over time.

dunstonh

so there has to be rules that give you the right to remain.

if the scheme is closing then there are no rights to remain.

Indeed I've just looked online and it says "If you’ve been a member of a defined benefits pension scheme for at least two years, you must be given the option to leave your benefits in the scheme."

That is where the scheme is remaining open. 2 years is very common today. It was often longer in the past.

So how would it be legitimate that they could refuse this option to us?

Wasnt yours a scheme closure?

wary

dunstonh wrote: »

if the scheme is closing then there are no rights to remain.

That is where the scheme is remaining open. 2 years is very common today. It was often longer in the past.

Wasnt yours a scheme closure?

Thanks again DunstonH. No, the scheme was not closing. It was simply a case of their IT department being outsourced to another company, and we all became employees of the new company. This represented a small percentage (albeit a significant number) of the overall work force, and I'm pretty sure that none of us, including people with 20+ years service, were allowed to leave benefits accrued in their company DB scheme.

atush

I dont know of any DB pensions where you could not have deferred with decades of service.

If you were told that, it may not have been true. Do any of you concerned still have your original scheme booklet? have you searched online for one?