Pensions Mis-selling financial redress

jewellery10

I was mis-sold a private pension in the late 1980s transferring out of a company defined benefit scheme. As part of the pensions mis-selling review in the early 1990s I was given a guarantee that I would not be financially disadvantaged by the mis-sell.

It is now nearing the time to my retirement date.

1) How do I go about finding about the processes, procedures and guidelines that govern the personal pension provider to calculate the financial benefits I would have received from my company scheme versus the current private pension?

2) What data is required to perform the calculations?

3) Is there a generic software application that is used to calculate and compare the benefits?

Any guidance from anyone that has gone through this process recently would be appreciated.

Silvertabby

I take it that you weren't able to rejoin/transfer your benefits back into your DB scheme?

If that's so, then I'm afraid that what you would have received had you remained with your DB scheme is irrelevant. When your complaint was dealt with, your compensation was calculated at that time and X amount of money was put into your DC fund, on the basis that your fund would then buy an annuity comparable with the DB pension you had given up. That was your complaint done and dusted.

Years later, things have changed. Yes, annuity rates have plummeted, meaning that if you do chose this option your annuity may be less than your DB pension would have been - but there's no point in pondering this issue as your old pension fund is under no obligation to give you a hypothetical quote and, even if they did, you can't re-open your complaint in order to take a second bite of the cherry.

On the plus side, there's always the (admittedly very slight) possibility that if your pension fund has done extremely well, it may have increased at a higher rate than your deferred DB pension would have done. Plus you now have the 'pension freedom' options which will allow you greater flexibility in the way you access your benefits.

jewellery10

The calculation to "compensate" me has not taken place yet. The PPP guarantee is worked out near my retirement date. They see what is in my fund now and what pension it would give me now and then compare it against what my company pension scheme would give me.

There is also the issue with comparing over/under contributions between the 2 schemes.

There is the issue that the company pension scheme was contracted out, and the complex rules around GMP (from additional SERPS entitlement) are also in play!

Silvertabby

jewellery10 wrote: »

The calculation to "compensate" me has not taken place yet. The PPP guarantee is worked out near my retirement date. They see what is in my fund now and what pension it would give me now and then compare it against what my company pension scheme would give me.

There is also the issue with comparing over/under contributions between the 2 schemes.

There is the issue that the company pension scheme was contracted out, and the complex rules around GMP (from additional SERPS entitlement) are also in play!

I have to say - that's unusual. The standard procedure was to calculate the compensation as at the time of the complaints, otherwise the whole sorry saga would have dragged on for (many more) years.

I'm assuming that you left your employment/deferred your DB pension benefits before you transferred out, so it's possible that the figures to be used would be from your deferred benefit statement (as at your last day of service) plus whatever indexation rate the scheme uses. Of course, that's if your old pension records are still readily available and haven't been archived. Has your old scheme already been asked for these figures?

Can you give any more details of your guarantees? Some of the guys who deal with private pensions (my background is LGPS) may be more helpful.

Annabelle_P

Hi

Wonder if you can help me too. I have been contacted by a company called Gallagher's who have looked into my pension and told me I am owed £15k or so because of being given poor advice from my old company. I don't know if I should spend some money checking this out with an actuary and pensions lawyer or just accept the amount.

Does anyone have experience of this or have some advice? Is it worth gambling the extra to chck the amount or taking the cash and running?!!

Thanks

bowlhead99

Annabelle_P wrote: »

I have been contacted by a company called Gallagher's who have looked into my pension and told me I am owed £15k or so because of being given poor advice from my old company. I don't know if I should spend some money checking this out with an actuary and pensions lawyer or just accept the amount.

Does anyone have experience of this or have some advice? Is it worth gambling the extra to chck the amount or taking the cash and running?!!

Without knowing the specifics of your circumstances -

- as a general rule, if you are contacted by someone who offers you money and says you can simply accept the money and keep it, and allows you to think that you don't need to personally look into what amounts you might reasonably be entitled to receive... the person offering you money is keeping a lot of money for themselves (by way of a large cut of your gross entitlement), or not trying very hard to achieve the best result for you (get a quick sign-off and move on to the next 'customer' because it's easier than fighting for every last penny and they will have made a decent profit margin from your case).

Linton

I would be extremely suspicious. It sounds rather like one of those phone calls saying that "you have recently had an accident..." when you know full well you havent. Their next step could be to ask you to pay a fee so that they can progress your case.


Have you had any dealings with Gallaghers before? In their letter did they give any indications that they knew anything about your details? Did they say which old company?


Perhaps if you can provide some details as to the circumstances that may entitle you to compensation people here can suggest the best way to proceed. If you have a case you may be able to handle it yourself.

Annabelle_P

Gallaghers contacted me asking me for permission to explore the case. I thought they were investigating my old company more than me, and I wasn't best pleased that I was advised to come off a final salary pension by the IFA they / Prudential supplied. I was subsequently told we shouldn't have been taken off. I therefore agreed for Gallaghers to look into my case with the Pru as it seemed to be part of a wider investigation. I was therefore surprised they then said I would be due a redress. It seems based on my actual case.

They have offered £1,500 to pay an IFA to advise me on what to do. I contacted my IFA who seemed clueless but put me onto a soliticitor who said they have an actuary that can help me. But Gallaghers say they will not pay for these services, just an IFA. So now I am halfway down a route and not sure whether to just take the money or invest in these services to check it out.

I don't know if people have experience of this sort of thing and whether I should take and pay for the third party advice or just be happy with the money I wasn't expecting.

DaveMcG

Silvertabby wrote: »

I have to say - that's unusual. The standard procedure was to calculate the compensation as at the time of the complaints, otherwise the whole sorry saga would have dragged on for (many more) years.

I'm assuming that you left your employment/deferred your DB pension benefits before you transferred out, so it's possible that the figures to be used would be from your deferred benefit statement (as at your last day of service) plus whatever indexation rate the scheme uses. Of course, that's if your old pension records are still readily available and haven't been archived. Has your old scheme already been asked for these figures?





Can you give any more details of your guarantees? Some of the guys who deal with private pensions (my background is LGPS) may be more helpful.

Prudential and some other large insurers were swamped by the number of calculations required and the regulator allowed them to offer guarantees. In order to qualify for the guarantee all the scheme info to perform the calculation had to be collected and kept on file.


To jewellry10, you seem to indicate that you left as an active member or opted-out as it was termed? Also did you join an alternative employer's scheme at a later date?


In broad terms the calculation will compare the value of the original scheme benefits with the value of the your actual benefits. As you point out under/excess contributions are taken into account and if relevant employer's contributions to the alternative scheme.



You are entitled to ask for all the relevant input in the calculation and the actuarial assumptions used to value benefits. I imagine if you posted them on here someone would be able to give an opinion. You can challenge the calculation and go to the FOS if you are unhappy with the response.


Another point - compensation was intended to be added to the personal pension - is that being offered to Annabelle?

Linton

Annabelle_P wrote: »

Gallaghers contacted me asking me for permission to explore the case. I thought they were investigating my old company more than me, and I wasn't best pleased that I was advised to come off a final salary pension by the IFA they / Prudential supplied. I was subsequently told we shouldn't have been taken off. I therefore agreed for Gallaghers to look into my case with the Pru as it seemed to be part of a wider investigation. I was therefore surprised they then said I would be due a redress. It seems based on my actual case.

They have offered £1,500 to pay an IFA to advise me on what to do. I contacted my IFA who seemed clueless but put me onto a soliticitor who said they have an actuary that can help me. But Gallaghers say they will not pay for these services, just an IFA. So now I am halfway down a route and not sure whether to just take the money or invest in these services to check it out.

I don't know if people have experience of this sort of thing and whether I should take and pay for the third party advice or just be happy with the money I wasn't expecting.

OK, so it looks genuine..


Since nothing has been said about the size of the pension its impossible to say whether £15K is reasonable or not. Didnt the IFA offer an opinion? If not can you talk to another one or have you spent the £1500 offered by Gallaghers? If the £15K seems to be in the right ballpark:
- £15K is not a large sum, useful but not life-changing
- actuaries and solicitors arent cheap
- there could be a legal dispute: stress and hassle
- delay to a payout
I would accept the unexpected £15K and leave it at that.

xylophone

It is now nearing the time to my retirement date.

1) How do I go about finding about the processes, procedures and guidelines that govern the personal pension provider to calculate the financial benefits I would have received from my company scheme versus the current private pension?

Presumably you have all the correspondence relating to the guarantee that you were given.

You will need to contact the company in question and ask them to give you full details of what they will be offering and of exactly how this was calculated.


Have you obtained a new state pension forecast?

https://www.gov.uk/check-state-pension