GMP ruling - delayed commutated lump sum

2bims

Hi there....First post for me here so be kind...….I'm trying to help my Uncle David, aged 75, since the passing of his wife Pauline in February of this year. Pauline used to have a small pension of some £26.18 per month when she died this year aged 80. My uncle contacted Ernst and Young, the pension provider, via Willis Towers, Watson, the scheme Administrator to inform them of her passing to stop the pension so that he didn't have to pay back anything that was not valid to be paid, and he was asked to furnish the usual, death certificate, birth certificates for both persons and marriage certificate, done and sorted.
In August just gone...some 5 months after sending the requested information, he received a letter from WTW stating that the pension had the ability to pass onto himself until his demise, and it included a form offering 2 options. £317.52 per year paid in monthly instalments....of £26.46 per month....OR Option 2. A trivial Commutated Lump sum of some £4700...….With the usual warning in BOLD letters and Highlighted in Yellow...."choosing this option could result in a delay in payment due to recent GMP ruling of the Lloyds case and it could be many months or Years before this is resolved"....Myself and my uncle had discussions on the phone with Willis Towers Watson Admin team, and they sent a letter stating that the previous pension had been "overpaid" by some £26.18 due to there being a one month delay in my uncle informing them of his wife's demise...and that this needed to be refunded prior to any further action....they could not take payment over the phone they said...and my uncle doesnt do internet banking thus a cheque was sent off....THis has now cleared...My Uncle chose Option 2 and sent this off recorded delivery...opting for the commutated lump sum (less tax)...They then wrote back stating that they needed sight of his Original Birth certificate in their possession before they could make payment.....So...this was once again posted to them recorded delivery for their records.

Initially they allowed my myself to act on his behalf to assist, but then pulled the Data Confidentiality rules and insisted upon a signed letter of authority being sent....again...a further recorded letter sent off.

I have asked for their dispute process, who their legal advisers are and who are the trustees as they have now stated "GMP ruling" that wont allow them to make any payment of a trivial commutated sum despite this being offered, signed and accepted and returned.

They have responded that WTW themselves are the schemes administrators and its the "trustees" that have made the decision. WTW have confirmed that if he had chosen "option 1" a lifetime annual payment that this would end on his demise. We have not chosen this option but Option 2...Lump sum pay out and have thus asked "Whilst awaiting trustees decision/pay out...GMP ruling etc....is this lump sum payment still due to be paid to his son and heir in the event my Uncle passes before the ""Many months, perhaps years" sorting out GMP equalistation.?.....

We have asked this question 3 times to different people at WTW and they simply respond "we are asking the trustees/legal advisers"....I find this unacceptable given the GMP high court case was last year in October. I have even sent WTW an link from their own website that gives options on how to equalise for GMP...and that trustees should ACT NOW rather than let matters build up. They have stated that HMRC legislation prevents them paying the Lump sum which I disagree with.

I have even offered them an alternative whereby my Uncle waives any and all rights to any extra sums payable due to GMP calclulations if they pay him the lump sum they have stated.....in order to shortcut further delays and procrastinations ....THis was done via signed letter also sent recorded delivery. THey again are "asking the trustees and seeking legal advice...."

I have found them to be just plain deliberately arkward coming up with seemingly any excuse not to pay...Their complaints procedure is woeful and all I get is emails saying "we will investigate and respond within 4 weeks but it may be longer...."..>They will not inform me who the Trustees are or their contacts....and have simply stated that "cameron McKenna" are their lawyers, a company I have worked with but it seems they dont wish to ask the questions I've asked as they then may have to pay....Seeing as GMP equalisation may ADD more monies to be paid rather than clawback monies...surely the offer to "settle at now" without GMP can be done?.....Also given the disclaimer and waiver letter that has been sent and signed.

I consider that they have "made and offer" which has been "accepted" by my uncle...offer and acceptance, a binding contract?....Thus if he was to sadly pass before payment was made, it should still be paid as part of his estate?....THis is the link to Willis Towers Watson info that they have written themselves and passed to the over 100 pension schemes they administer.... Any And Alll help would be appreciated..How any "old" people without a grasp for computers, legal matters etc who are still grieving their loss can be expected to deal with these Charlatans is beyond me.... willistowerswatson.com/en-GB/Insights/2019/07/practical-next-steps-for-your-gmp-equalisation-project

xylophone

This question is discussed in this thread.

https://forums.moneysavingexpert.com/discussion/5930678/guaranteed-minimum-pension&highlight=

However, it might be worth a discussion with TPAS and possibly a complaint to the Pensions Ombudsman, particularly on the lack of clarity concerning the payment to the estate if the agreed payment is delayed beyond the widower's death.

https://www.pensionsadvisoryservice.org.uk/contacting-us

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

xylophone

They have stated that HMRC legislation prevents them paying the Lump sum

I am puzzled by this - chapter and verse?

https://www.pensionsadvisoryservice.org.uk/content/spotlights-files/uploads/Death_benefits_commutation_SPOT014_V1.3.pdf

sandsy

WTW simply administer the scheme on behalf of the trustees. However, the ultimate decision on whether to pay a trivial commutation lies with the trustees.

There is a question here of whether WTW followed the correct process in offering the trivial commutation. If they offered it when they shouldn't have, that's maladministration and can be the source of a complaint for distress caused etc. However, you cannot make a complaint about their failure to pay out the trivial commutation sum as that is a trustee decision.

You don't need to know the name of the trustees to write to them - just send a letter addressed to the Trustees, at the scheme's address.

Many schemes are withholding lump sum payments so it's not a unique situation. The detail of how GMP equalisation will be applied still has to be agreed by many parties including the DWP and the Pensions Regulator. The ruling last October was not the finalisation of the issue.

Presumably you also still have the option to change your mind and accept the regular payment.

Silvertabby

“ They have stated that HMRC legislation prevents them paying the Lump sum

I suspect this just means that they are still waiting for GMP clarification.

Yes, no doubt some pension schemes are willing to pay out now under the old rules, with the intention of re-running the calculation once the correct GMP has been received - but they will be few and far between. For the majority of schemes (including the public sector) their software won't support the stripping back and re-calculation, so it will all have to be done manually. And then checked. The amount of man/woman hours this would involve would be substantial and thus very costly.

DBdoobydoo

I've read several reports of the Lloyds Bank pensioners case regarding GMP equalisation but haven't figured out what it could mean for me. I have an occupational pension with a GMP element for the period in question (1990-1997). I am male & my SPA was 65. As I understand it the GMP accrual rate is going to have to be equalised between men & women but does this mean that my pension will be increased?

2bims

Indeed...>I questioned the author of the words on this point and she admitted she had zero legal background.....HMRC apply rules and calculations for tax purposes as they are told and apply to them, but as far as I'm aware they dont draw up legislation, and from my own reading....there is currently no legislation in place for HMRC ...merely the judges ruling that GMP equalisation should be applied to pensions where applicable.....but with no imposition of fixed methods...….I feel that it is all smoke and mirrors to merely hold onto monies and not pay out which seems unfair and not the purpose of the GMP ruling....which is regards sexual equality and not to delay....As my uncle has "chosen" and opted for pay-out then it should be that this holds and he has offered to waive GMP as there is no legislation stating he has to receive it, especially if he has chosen to waive his right to any to speed matters up

2bims

I understand that some are paying out under the "old rules"...but surely these are still the "current rules"...I find it completely Big Boy Corporation tacitcs that some 11 months after the ruling they've all decided to sit around lounging and delaying....surely in their own interests and not of the persons that have paid into the schemes....Is there a statutory period/process I have to go through on my Uncles behalf before I can register it as a Dispute and take forward to a Govt body be it Financial Ombudsman or other? THey seem to be simply delaying in answering saying "we are taking legal advice/referring the matter to the trustess...when the administrators themselves have already offered advice and guidance to the pension companies...but seemingly the Trustees are ignoring the advice....its not yet possible to establish who is the cause of the stoppage/delay....And not once have they given a time frame to respond or give a proper answer.....11 months after the High Court decision, there must be millions of pensioners caught in this....Info says some £20-£30Billion is caught up in this issue....

xylophone

https://www.pensions-ombudsman.org.uk/our-service/make-a-complaint/