AVIVA pension calculation error!!! What can I do?

Alice_Holt

Not related to your pension question, but I just wondered if your wife might be eligible for Attendance Allowance.  
https://www.gov.uk/attendance-allowance
https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/attendance-allowance/

If so, you may be able to claim carers allowance (which is a work replacement income).  
https://www.citizensadvice.org.uk/benefits/sick-or-disabled-people-and-carers/carers-allowance/
https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/carers-allowance/

If not appropriate, then apologies.
If these would be a possibility then your local advice agency or Age UK might be a reasonable place to get more info.
https://www.citizensadvice.org.uk/about-us/contact-us/contact-us/contact-us/
https://www.ageuk.org.uk/information-advice/

Gibdan

Hi  I have now had an explanation from the COMPLAINTS Dept. at AVIVA as to why my pension has to be 'recalculated',  They are now saying they are checking to see if it is 'FUNDED' or not.  If it is FUNDED then his will give me other options such as a 'Draw Down policy' giving the chance to have a lump sum payment.  AVIVA are aware that this is the option I would have wanted if it was possible as I had numerous discusssions with them (and Pension Wise and Pensions Advice Service) about it.   I can't quote believe that their calculations didn't show immediately if it was funded or not!!!!!   It feel it might be a way of 'stalling' me whilst they recalculate the pension, i.e.they come back and tell me it's NOT funded and then advise me that the monthly pension will be less than half of the original amount stated!    Also, no mention of any 'remediation' (as the Complaints Dept call it) I call it compensation although the girl asked me to note any overdraft/debts/expenses accrued due to non-payment of the pension as due on 2nd March 2020.  

I would be so very appreciative to have anyone's views on the foregoing

xylophone

They are now saying they are checking to see if it is 'FUNDED' 

Have they explained what exactly is  meant by this?

Are they saying that they are checking to see whether investments within the policy have grown enough both to cover the revalued GMP and to provide pension in excess of GMP and a PCLS?

It seems extraordinary that they should have to recheck even as they were about to pay the pension.

Gibdan

Hi  Xylophone.  Well its the girl in the Complaints Dept. I've been communicating with so she is only able to give me the basic details.  Nothing more than the details in my posts above.   After reading your recent comments (many, many thanks for those by the way) I emailed AVIVA and told them that after taking advice I wanted the 'issue' resolved in days rather than weeks or months and would be seeking compensation.  I have phoned/emailed the girl in Complaints dealing with my case - she has been very prompt in phoning/emailing me also.  We last spoke this morning and she sent an email to confirm what was discussed during that conversation.  Here is the email:    

Thank you for your email, I am happy to confirm our conversation 05 March.

 As advised, the value of your policy is still being calculated.  During the process of paying your pension benefits the value of your policy was queried by an internal team. In this case, if it proves that your policy is funded it potentially gives you alternative options, for example you may be able to transfer to a drawdown product.

 When we spoke on the telephone on 03 March you indicated to me that you initially planned to take this pension as a lump sum due to personal circumstances, so the importance of an accurate value is clear.

 The teams involved are aware of the urgency in this case and as soon as we are in a position to make payment I will endeavour to make sure it is completed as quickly as possible. I’m watching the matter and I’ve asked that I am made aware of any updates so I can pass them on to yourself.

Your complaint in regards to the service you have received is being investigated separately and please feel free to email or call with anything you wish to be added to that.

Xylophone - what in your honest opinion do you think they are playing at????

Gibdan

Xylophone - I would add that it DOES seem EXTRAORDINARY to me also

xylophone

When we spoke on the telephone on 03 March you indicated to me that you initially planned to take this pension as a lump sum due to personal circumstances, so the importance of an accurate value is clear.

Did you seek to take the whole of the pension as a lump sum? There had been no indication of this before?

I am finding this whole business very strange - it is a pity that you have lost access to your original statement of deferred benefits and the policy documents.

Gibdan

Xylophone - Yes, your're right it's a pity I lost the paperwork.   I have searched high and low for it.   Back in September last year, when I first contacted them re. the pension due in February 2020, I DID check if it would be entitled to part of it as a cash lump sum but was told it wasn't possible due to the fund value!    Because I was so furious, after what happened on 2/3/20,  I jokingly said to the girl in the Complaints Dept:  "Given my  personal circumstances right now, just give me the whole fund value as a cash lump sum and we'll call it quits because I don't have any faith in AVIVA after what's happened". 

The only thing I can think is that they have made such a huge 'error' that they are looking to see if they can manipulate the fiigures so that they can legally produce some sort of 'cash lump sum' which will keep me happy and at the same time they will have covered up the glaring error they've made.  Additionally, they hope that I would be 'so happy' I wouldn't pursue a compensation claim!   It's all very odd!!! What do you think?

xylophone

I DID check if it would be entitled to part of it as a cash lump sum but was told it wasn't possible due to the fund value! 

This indicates that when your benefits from the policy were under consideration, they calculated that the investment performance had not been good enough to cover the payment of the revalued GMP (which they had to provide) and any additional benefits ( a lump sum/pension above GMP).

Considering the estimate of eventual fund size when you took the policy, this in itself seems strange.

You might find the FAQ here  (although from Aegon, not Aviva) of  general interest.

https://www.aegon.co.uk/support/faq/Understanding-our-products/retirement-products/pension-benefits/what-is-guaranteed-minimum-pension.html

Gibdan

Hi Xylophone - Many thanks for all your help.  It is truly appreciated as I've been in a bit of state this week regarding this whole business.  I wiill look at the link you gave me.  I remember quite clearly that when I took out the policy in 1987 they estimated the fund size on maturity to be £1,000,000 which I have subsequently been told would have been over the top because of the way they would have calculated it and how the company performed over the years!   As it's a With Profits policy there were no annual bonuses  added in more recent years (credit crunch etc.).  I always thought that the bulk of a With Profits policy was awarded as a 'terminal bonus'?

I think I will now wait to see what AVIVA come up with and take it from there!  If you didn't mind, I will let you know what they say to get your opinion on it

Once again many thanks.

xylophone

 If you didn't mind, I will let you know what they say to get your opinion on it

It will be interesting to hear how it pans out. There have been a lot of posts concerning these S32 plans over the last few years.