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

xylophone

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!  

Well yes, but there's over optimism and pure pie in the sky!

From a pot of £I mn to not enough to meet the GMP.....

Gibdan

Yes, I feel it will be interesting!!!   I'll let you know - I'm insisting I get an answer some time over the next few working days!

Again, many thanks

Alice_Holt

I wonder if Aviva might still hold the documents the OP can't find, and if a SAR would be a useful tactic:
https://www.aviva.co.uk/legal/subject-access-request/

Gibdan

Thanks Alice.  I'll wait to see AVIVA's next move and take it from there.  I think the mention of a possible cash lump sum is just a delaying tactic whilst they 'are frantically doing try to recalculate the pension'.  I fear the outcome will be a drastically reduced monthly pension and NO cash lump sum!  However, I will DEMAND compensation!

sandsy

Gibdan said:

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

You have a Section 32 that promises a lifetime income from age 65.  The capital needed to provide that income is compared against the value of your policy.
If the policy value exceeds the capital, ie there's more money in your pension than is needed to pay out the promised income, the policy is funded and you can use the value in a different way.
But if the capital needed is more than the policy value, the policy is unfunded. But Aviva still have to provide your income even though there is a shortfall in the value that has built up. And they could make a significant loss on you if you are long lived. If Aviva let you do something else with the money, they are obliged to give you a payout that is sufficient for you to replicate the policy benefits,  ie they would have to give you the capital value. They will normally not do that as they will definitely incur a loss on you in those circumstances. So you'll find that the terms and conditions within most S32 most policies prevent this. 

Gibdan

Sansy

sandsy said:

 If Aviva let you do something else with the money, they are obliged to give you a payout that is sufficient for you to replicate the policy benefits,  ie they would have to give you the capital value. They will normally not do that as they will definitely incur a loss on you in those circumstances. So you'll find that the terms and conditions within most S32 most policies prevent this. 

Hi Sandsy.  So the way I see it is that AVIVA have already 'informed' me then that the policy is 'unfunded' because the paperwork i received stated that there is insufficient funds to provide a 'cash lump sum' in addition to the pension.   Now the girl in the Complaints Dept. is kind of hinting that there IS a possibility of a 'cash lump sum' (possibly the full fund value!!!) and that's why it needs to be recalculated.  Although I only found out about the recalculation on the day that my first pension payment was due in my bank account.  AVIVA  knew there was a problem/error and didn't even bother to contact me to advise me of that - I had to contact them when the money didn't arrive in my account.

Before accepting the monthly pension I took advice from several sources because I wanted to see if there was any way I could get my hands on a 'cash lump sum'.  I was told categorically 'NO'.   I believe it's simply that AVIVA have made an error with regard to the calculation of 'monthly payment' due - thus the only outcome I can see to this whole charade is that it will result in a 'reduced' monthly payment.   BUT, in that case, I will kick up a stink (social media, etc, and what ever else) and I will be asking for significant compensation.   

The whole scenario is totally unacceptable - 1) giving me WRONG figures and asking me elect to take the monthly pension based on those figures, 2) I had to contact AVIVA to find out there had been an error! when they had avised me (only  verbally) that TWO payments would be made on 2nd March (my 65th birthday was 1st February).     3) all the distress this has caused me this week because I was depending on that payment!   I still don't have a timeframe - here is part of an email from the Complaints Dept. yesterday:

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.

As you can see she is 'hinting' at a cash lump sum (just to keep me sweet and off her back I feel) and still does not mention a specific timeframe.  I should have been given a date that it would be sorted by, e.g. 9th March.  My case should have been given absolutely TOP PRIORITY considering the error they have made.  I can't see that it should take more than a day to sort it out.  Just how do they calculate it???  Doesn't a computer do that for them these days???

I am at my wits end with it all!!!   If you can't trust a large company like AVIVA who can you trust

Sorry I have wittered on and on but I find it very cathartic!!!