Pension provider error-underpayment at Transfer

Stevie3125

I transferred a pension last year into a LGPS. I have now received a letter from the previous provider to say that they made an error in the calculation and underpaid by £453. They have stated that they will repay this to me as a small lump sum, with 25% being tax free and the remainder taxable. I have some concerns about this. Will this impact my pension in future if I decide to take a lump sum? Also I am missing out on the future benefits of this albeit small amount. I would have had this as part of a LGPS for a further 18 years. Should they not be compensating me for this? Any help would be appreciated.

Silvertabby

This should be paid to the LGPS.  The re-calculation of your LGPS pension purchase is a right pain (been there, done that) but that is the correct procedure.

You are clearly under 55, so I can't see how your old pension fund can offer you 25% tax free/75% taxable.  Even if they call it 'compensation' it wouldn't be taxed like that.

Dox

Silvertabby said:

This should be paid to the LGPS.  The re-calculation of your LGPS pension purchase is a right pain (been there, done that) but that is the correct procedure.

On a slightly different tack, will the LGPS accept 'top up' payments where a member has transferred in and now, some years later, will have a tiny amount owing from GMP equalisation in their ceding scheme?

Silvertabby

Dox said:

Silvertabby said:

This should be paid to the LGPS.  The re-calculation of your LGPS pension purchase is a right pain (been there, done that) but that is the correct procedure.

On a slightly different tack, will the LGPS accept 'top up' payments where a member has transferred in and now, some years later, will have a tiny amount owing from GMP equalisation in their ceding scheme?

Really too early to say, I'm afraid.