Was my partner missold?

DullChimpmunk

My partner, who is not the most  financially astute, started his career in teaching in September 1990. This, of course comes with the teachers pension (TPS) as well as other benefits.  He's been getting statements from Sun Life Financial of Canada (previously we think, Lincoln Finance) for products he took out as below:

1987 - Fincancial security acct - guaranteed amount to beneficiaries on death.  As a teacher he'd have got death in service of about £120k

1988 - Personal pension plan - no longer pays into this.

1994 - Income Security Plan - He's a teacher so sickness/injury he'd get 6 months full salary followed by 6 months half salary.

1994 - Retirement plan plus

He was advised to stop paying into these in 2000/2002.  After much nagging he thinks (!) that he no longer contributes. 

My question is, given he was in the teachers pension scheme, why on earth would he take out a largely worthless Retirement Plan Plus in 1994?  Should he not have been advised that he would have been better buying extra years in the TPS, in which case he should have been advised to cancel the retirement plan he took out in 1988.  Was he missold and how would we go about investigating this?

Thanks

dunstonh

1987 - Fincancial security acct - guaranteed amount to beneficiaries on death.  As a teacher he'd have got death in service of about £120k

He was on a very big salary in 1987 to get £120,000 death in service.    I suspect you are way off the mark.

Death in service is rarely sufficient for most people.   Its purpose is to cover short term loss of income and go some way to replace lost pension build-up.   It's not sufficient for family protection or mortgages.

Also, noting that it was taken out in 1987 but he started work as a teacher in 1990. So, it could not possibly have been missold for that reason.

1988 - Personal pension plan - no longer pays into this.

In 1988, you could not pay into a personal pension if you were a member of an occupational pension.  So, this would have been before he was a member of the TPS.  He would have had to stop once he joined the TPS as that was the legislation at the time.

1994 - Income Security Plan - He's a teacher so sickness/injury he'd get 6 months full salary followed by 6 months half salary.

This type of plan is long term income protection designed to kick in when your employer benefits run out.  So, nothing wrong with this.

1994 - Retirement plan plus

In 1994, the rules were still the same as 1988 in that you could not take out a personal pension if you were a member of an occupational pension.  So, this was probably an FSAVC.  The name suggests it is ("plus" indicating an increment and not calling it personal pension). A product designed to increment your retirement planning.

My question is, given he was in the teachers pension scheme, why on earth would he take out a largely worthless Retirement Plan Plus in 1994?

Why would it be worthless?   Lots of people pay towards their retirement using a range of options.  

Back then, teachers in many areas were not being granted early retirement permissions (i.e. you could retire but they were not allowing early commencement of the TPS requiring you to fund the gap until it was paid).  So, provisions for gap filling and/or increments on top of the TPS would be considered normal.  Just as gap filling and paying more in is today.

Should he not have been advised that he would have been better buying extra years in the TPS, in which case he should have been advised to cancel the retirement plan he took out in 1988. 

Adding extra years was often the better option financially on a £1 for £1 basis.  However, adding years was more expensive and was not suitable for those looking for earlier retirement.   

The plan taken out in 1988 should have stopped in 1990 when he became a member of the TPS.   However, it is up to the individual to make those changes as the pension provider would not be aware of changes in employment unless they were told.

Was he missold and how would we go about investigating this?

We have very limited information available but nothing you have said stands out as being missold.   

Clive_Woody

DullChimpmunk said:

My question is, given he was in the teachers pension scheme, why on earth would he take out a largely worthless Retirement Plan Plus in 1994?  Should he not have been advised that he would have been better buying extra years in the TPS, in which case he should have been advised to cancel the retirement plan he took out in 1988.  Was he missold and how would we go about investigating this?

Thanks

Who was providing him with financial advice at the time? Was it an IFA?

shortseller09

If it was a direct sale by a Lincoln agent then it is possible you have a case for the Retirement Plus plan (it is an FSAVC).

Marcon

shortseller09 said:

If it was a direct sale by a Lincoln agent then it is possible you have a case for the Retirement Plus plan (it is an FSAVC).

Which would have been useful at the time for the reasons Dunstonh has outlined - and given the huge publicity surrounding the misselling of FSAVCs several decades ago, he could have stopped then - although it seems he doesn't even know now if he is still contributing, which is hardly anyone else's fault.