Is your company a pension scammer

dmhzx

Not sure if I'm being unreasonable here.
A few years back I received a pension statement that I could expect to receive about £4200 from a company pension scheme.
They even offered to pay for independent advice.
The advice I got was to delay taking my pension as long a possible.
So I did.
As time went by the amount of my pension gradually increased, and I reckoned that by about now (I'm 69), it might be up to £5K.
Then the 'trustess' decided to take the administration away from Capita, and give it to an outfit called Mercer.

At this point, after quite a bit of 'legal advice', they managed to 'discover' that Capita had misunderstood the rules, and had been applying the delayed pension rules from 60, rather than 65.
It took several months for the legal experts to find this get out, which in about ten years none of the trustees nor Capita had spotted
Result an instant 5 year loss of delayed pension, so back to £4200 again.
Then I discover that in order that people like me "didn't lose out" I was to be forcibly retired at 60, and all my back pension paid as a lump sum.
With all the increases since 60, my pension would be about £3000
And that lump sum of nearly 8 years back pay would all arrive at once, and HMRC would get nearly as much as I would.

There is NO flexibility on that, the delayed pension increase will not apply to me, no matter how long I delay.

They even told me (And I can almost hear the smirk) that there isn't any point going to the ombudsman because the companies always win.

And now to add insult to injury, I cannot transfer my fund to my SIPP unless I pay for more professional advice. - And guess what, it's not at all easy to locate someone who will advise me, since I have such a piddling pension pot. (Last transfer value about £100K - probably down to 50p by now)

The professional advice I've received so far turned out to be a huge mistake, and had cost me 40% of what I had previously been quoted.

So just be aware that the biggest scammers are possibly the trustees of your own pension scheme. (In this case MAN Truck and Bus)

hyubh

dmhzx wrote: »

As time went by the amount of my pension gradually increased, and I reckoned that by about now (I'm 69), it might be up to £5K.
Then the 'trustess' decided to take the administration away from Capita, and give it to an outfit called Mercer.

You mean trustees...? Once the admin of a DB scheme has been outsourced, it's quite normal for different administrators to be hired over time, and both Capita and Mercer are big ones who will lose business to each other intermittently.

At this point, after quite a bit of 'legal advice', they managed to 'discover' that Capita had misunderstood the rules, and had been applying the delayed pension rules from 60, rather than 65.

What do you mean by 'delayed pension rules'...? At first I thought you meant whether an actuarial reduction applied from age 60 or 65, however the next bit suggests something else -

Result an instant 5 year loss of delayed pension, so back to £4200 again.
Then I discover that in order that people like me "didn't lose out" I was to be forcibly retired at 60, and all my back pension paid as a lump sum.
With all the increases since 60, my pension would be about £3000
And that lump sum of nearly 8 years back pay would all arrive at once, and HMRC would get nearly as much as I would.

There is NO flexibility on that, the delayed pension increase will not apply to me, no matter how long I delay.

Genuinely curious what this 'delayed pension increase' is about - can you elaborate...?

They even told me (And I can almost hear the smirk) that there isn't any point going to the ombudsman because the companies always win.

Have a browse through the Pensions Ombudsman's determinations yourself:

https://www.pensions-ombudsman.org.uk/our-decisions/

While it's true the Ombudsman's role is not to be a member advocate, neither is it to safeguard the interests of trustees and administrators - it's to see that scheme rules (and the law) have been upheld.

If you went through the scheme's internal complaints process (it will have to have one by law) and then, after that, took it to the Ombudsman, the key thing will be what the rules of the scheme actually say.

And now to add insult to injury, I cannot transfer my fund to my SIPP unless I pay for more professional advice. - And guess what, it's not at all easy to locate someone who will advise me, since I have such a piddling pension pot. (Last transfer value about £100K - probably down to 50p by now)

If the CETV really has crashed to be under 30K, you wouldn't legally need financial advice to transfer out to a DC scheme.

So just be aware that the biggest scammers are possibly the trustees of your own pension scheme. (In this case MAN Truck and Bus)

Something to do with this...?

https://www.outertemple.com/2013/01/successful-pension-scheme-rectification-claim/

That link doesn't provide any detail however.

dmhzx

Thanks for the link.
As I understand it, with most pension schemes, the longer you wait until you start drawing it so the annual amount goes up. It dose with the state pension, and it was doing with this MAN one until Mercer took over.
My independent financial advice was to delay starting my pension for as long as possible. -- The ONLY logical reason for that would be that I would get more PA if I started later.

As it is, I've just found my original statement. If I had retired in 2105 I'd have got £4300 a year, it I actually retire now I will get £3000 (plus a fully taxable £25 k ) - Since I will be deemed to have retired at 60.
The transfer value when I last received it was just under £100K.

GDB2222

I'm lost. Which is the scammer, capita who misread the rules, or Mercer who told you the bad news?

hyubh

dmhzx wrote: »

Thanks for the link.
As I understand it, with most pension schemes, the longer you wait until you start drawing it so the annual amount goes up.

Is this DC or DB, a perhaps a hybrid scheme? And if DB, are you an active member still? Or perhaps some sort of 'enhanced deferred' (i.e. where the scheme has closed to further accrual, but there are special rules while you remain an employee)...?

It dose with the state pension, and it was doing with this MAN one until Mercer took over.

Mercer haven't literally 'taken over' the scheme though - by the sounds of it, one part is now the third party administrator of the scheme, and another provides actuarial services to the trustees.

My independent financial advice was to delay starting my pension for as long as possible.

On what basis though...? More reckonable service in a final salary scheme = good, more years a preserved member... it depends.

Brynsam

Yes, you're being unreasonable - but it's easy to see why. Probably most people would feel similarly bitter, but you're hopelessly confused (again, easy to see why) and bandying about accusations won't help resolve anything. I presume by 'delayed pension rules' you mean 'late retirement increases' where members didn't take their pension at a particular age?

Mercer are doing exactly what a good administrator should be doing: checking that the rules of the scheme are being applied correctly.

If the errors made previously in administering the pension mean you lose out in terms of being hit with a bigger tax bill than would otherwise have been the case, it is highly likely the scheme will be on the hook for the extra tax. What is very unlikely, though, is that they will be required to pay you benefits in excess of those promise by the Rules of the scheme when correctly interpreted.

Give TPAS a call and get some free, impartial guidance: https://www.pensionsadvisoryservice.org.uk

hyubh

Brynsam wrote: »

Yes, you're being unreasonable - but it's easy to see why. Probably most people would feel similarly bitter, but you're hopelessly confused (again, easy to see why) and bandying about accusations won't help resolve anything. I presume by 'delayed pension rules' you mean 'late retirement increases' where members didn't take their pension at a particular age?

You seem very sure of the situation - can you elaborate? (With regard to the OP's scheme that is - I know what a late retirement increase is.)

xylophone

I am finding it difficult to disentangle the facts from the emotion.

You worked for Man Bus and Truck and were a member of a defined benefit pension scheme?

When did you work for the company? Was any service pre 1997?

What was Scheme Normal Pension Age (60 or 65)?

Did you leave before SNPA with a deferred pension?

Or did you leave at SNPA but chose not to claim your pension on the basis that the scheme would pay late retirement increases?

Scheme rules did not permit the payment of late retirement increases?

Did you read your scheme booklet? Did it have incorrect information about SNRA or late retirement increases?

Are you drawing your state pension?

squirrelpie

NRSA

Pardon me, but what is NRSA?

xylophone

Pardon me,

With pleasure!:)

I had meant to type NSPA.....mea culpa!