Don't understand

[Deleted User]

Asking this for a friend:
In the early 80s I worked for a company and cont. to a DC pension, for a couple of years, statements i got in the late 90s suggested the pension was worth around £1000, then the group went into admin and the pension was run by the trustees. After a house move I got round to chasing them up (they had changed address), and to my shock received a letter to say the pension was worth £12k.
Being over 55 (I'm 58 now) I asked about the cash in value only to be told THEY had used the money to by me an annuity???

1)can they do this?
2)do I have any options?

thanks for reading.

dunstonh

1)can they do this?

Depends on the type of pension. e.g. if its a deferred annuity.

However, it could be that the only in-house option they offer is annuity and you are getting your wires crossed (i.e. they are telling you what they offer but not what is available on transfers to other plans that offer other options.

2)do I have any options?

Depends on the type of plan you have.

agarnett

In my experience trustees who want out collude with their financial advisers and insurance company providers and take shortcuts to get out from under.

They may even have wound up the occupational DC scheme and if so, probably did stuff you into a deferred annuity. How they did it might make interesting forensic reading, especially if there is no reason why they should have lost contact with you such that you had no notice of it.

I have one where they deliberately removed my address from the policy record at the time they did the wind up.

A supposedly reputable very large insurance company and an award winning financial adviser was involved in mine.

They typically do what they want and couldn't care less about the policyholders.

Who provided the latest information? The insurance company?

It is quite possible that the nsurance company retained the policy number from the old occupational scheme arrangement if they transferred it into a deferred annuity. That's what happened with mine.

Are the trustees still "the trustees" or have they abdicated responsibility following a "wind up" so that your relationship now is direct with the insurance company perhaps?

[Deleted User]

Thanks an I suspect the latter, I will have to dig out what paper-work I have and come back to this, thanks again for now.

xylophone

In the early 80s I worked for a company and cont. to a DC pension,

Has your pension been transferred into a S32 buy out bond?

http://www.pruadviser.co.uk/content/knowledge/technical-centre/section_32/

agarnett

The one I refer to, xylophone, which I wasn't happy to learn of as a fait accomplit, was indeed what looks like some kind of Section 32 buy out ... as kindly discussed by you a week or so back in that other thread I started about what a Section 32 really means, ... but the particular provider just calls it a "deferred annuity", and if I recall correctly they put that in writing once or twice too, but "Section 32" doesn't appear in writing, even though it may be.

So I wouldn't be at all surprised if the OP has ended up with something similar - and as I said, my provider even managed to convert mine from a DC occupational pension policy controlled by trustees to a "deferred annuity" controlled by me, with exact same policy number, without me lifting a finger other than the one I waggled to trustees months before they did it saying "don't even think of abdicating responsibility or changing it".

Then for a year or two afterwards I received no correspondence until a dormant policy unit said they had lost contact with me so had checked on last known address - I hadn't moved, but my address had been removed from the record!

So they did the conversion anyway against my wishes, and hid the process from me. They are also a very big provider, and one of their head office technical gurus was persuaded to do the dirty work behind the curtains, so makes you wonder how often they have done such.

woolly_wombat

If it's a Section 32 policy then it will pay out a guaranteed minimum pension (GMP) at age 60 (female) or 65 (male).

If you are lucky and the GMP has been revalued in deferment on a fixed rate basis then, assuming you left before 6/4/88, it will have increased by 8.5% annually.

For more on GMP revaluation see:
http://www.pruadviser.co.uk/content/nav/about/26674/pghome/49880/53732/53759/53768/53789/#

Your GMP will not increase in retirement but you could still be in for a pleasant surprise.

[Deleted User]

I think that was the case as statements in the 1980s said it was worth £1000, next I know 20 odd years later it was £12000

Head_The_Ball

venison wrote: »

In the early 80s I worked for a company and cont. to a DC pension, for a couple of years, statements i got in the late 90s suggested the pension was worth around £1000, then the group went into admin and the pension was run by the trustees. After a house move I got round to chasing them up (they had changed address), and to my shock received a letter to say the pension was worth £12k.
Being over 55 (I'm 58 now) I asked about the cash in value only to be told THEY had used the money to by me an annuity???

1)can they do this?
2)do I have any options?

thanks for reading.

How odd.

You were a 73 year old recently retired butcher last year when you first joined this forum.

Hi my name is Veronica a new member so please be kind to me while I get the hang of MSE, I was a butcher most of my working life but now a retired 73 year old who's getting to grips with the internet.

You must be Benjamin Button.