DB pension transferred, now they want some money back

Col349

I've seen similar posts but nothing exact, so apologies up front if I've missed anything. 
I transferred my DB pension to DC 3 years ago, no problems with that.  A few weeks ago my employer wrote to me and said there had been a mistake and they were after 20% of the money back.  I know there is a statute of limitations of 6 years on pensions so they seem within the law to request this money back.
After waiting this time for a reply to my initial questions;
*how did this happen?
*who checked it?
*can I see the calculations to prove this etc?
Now I have received an email for a meeting this Thursday to discuss it, I know my initial attitude is going to be ' you're not getting it back that easily', but I was wondering;
*Has anyone heard of this happening ?(2 IFAs I spoke to had not)
*Is there any questions I need to ask?
*legally do I have a leg to stand on?
All the decisions I have made since the offer three years ago have been based upon the figure I received and I know that is a defence I can use to reduce the amount, but if there is any other advice I would be grateful.

Many thanks

Colin

Marcon

Col349 said:

I've seen similar posts but nothing exact, so apologies up front if I've missed anything. 
I transferred my DB pension to DC 3 years ago, no problems with that.  A few weeks ago my employer wrote to me and said there had been a mistake and they were after 20% of the money back.  I know there is a statute of limitations of 6 years on pensions so they seem within the law to request this money back.
After waiting this time for a reply to my initial questions;
*how did this happen?
*who checked it?
*can I see the calculations to prove this etc?
Now I have received an email for a meeting this Thursday to discuss it, I know my initial attitude is going to be ' you're not getting it back that easily', but I was wondering;
*Has anyone heard of this happening ?(2 IFAs I spoke to had not)
*Is there any questions I need to ask?
*legally do I have a leg to stand on?
All the decisions I have made since the offer three years ago have been based upon the figure I received and I know that is a defence I can use to reduce the amount, but if there is any other advice I would be grateful.

Many thanks

Colin

I'd have a word with TPAS for some free and impartial advice: https://www.pensionsadvisoryservice.org.uk

Provided you could not have realised your transfer value was too high (or might reasonably have suspected it was), then you could indeed try arguing what is known as a change of position defence - but I'd be suggesting that the trustees/employer pursue whoever calculated the transfer value incorrectly (likely to be third party administrators).

There is also the little matter that if your transfer was over £30K, you would need to have taken advice from a suitably authorised individual...who would have advised based on the figure provided.

ratechaser

Well now... this sounds utterly extraordinary - you were presumably provided with a CETV that you based your decision on, and (assuming it was >£30k) you got financial advice based upon as well - out of interest, did the IFA advise for or against the transfer?

I have no advice for you other than to say that the nature of CETV calculation is not something that the average person would be able to validate - this isn't one of those situations where it could be reasonably argued that "if you'd bothered to do your own sums, you'd have known it was an error", so if you get a figure, you accept it in good faith.

Anyway, others will have better suggestions, but I'll be following this with interest... good luck.

xylophone

You were given a CETV?
It was in excess of £30,000?
You took the necessary advice?
How were you supposed to know (or even any adviser supposed to know) that it was too high?
We have seen numbers here that verge on the seemingly fantastical.....
As above, ring TPAS to discuss.

Albermarle

I have no advice for you other than to say that the nature of CETV calculation is not something that the average person would be able to validate

Plus as far as I know , each scheme will calculate the CETV differently , making it even more impossible to be able to detect whether a mistake has been made.

Col349

Thanks all
Yes I received a written transfer value from the company my employer palmed our frozen final salary pension off to, and accepted, which I assumed became a contract between us.  However it does seem that the statute is 6 years so they can get away with making mistakes and then asking for money back (disgraceful and ridiculous)
Yes it was over 30K so had to get IFA advice, which was to take it as it was a good offer at, I think, 29x (but not as high as some I've seen here )
I assumed the calcs would be too complicated for me to understand, but they offered and it takes them time to produce so giving me thinking time.
Just gathering ammo for Thursday, so I'll ring TPAS
Thanks

JoeCrystal

Woah, here I was thinking, "Oh dear, it one of these posts that get reposted every few days talking about DB pension scheme and transfers" What a breath of fresh air to see a genuinely new problem! I concurred with ratechaser that it is extraordinary to see that kind of problem! I would love to know how and why they managed to mess this up so badly. (Maybe it is a formula in the excel sheet that is wrong!) Not only that, how on earth are you planning to pay it back, even you did agree?! Out of the pension pot? Out of your already taxed accounts? Yikes! So many minefields here...

Please keep us updated about this, and this can be very useful for any other people who may have the same problems, especially with so many people transferring out of DB pension schemes these days. 

marlot

I wonder how they would respond to an offer to transfer the CETV back (perhaps with a little extra for inflation) in return for having the DB benefits reinstated?

NedS

marlot said:

I wonder how they would respond to an offer to transfer the CETV back (perhaps with a little extra for inflation) in return for having the DB benefits reinstated?

That was my initial thought upon reading this thread. The OP (with independent financial advice) made a decision based on the offer at the time. Would you have made the same decision at the reduced transfer value? Are they prepared to reinstate the original DB pension? Are they prepared to pay for fresh advice based on the now reduced (corrected) offer? Do you still have the DC pot? Has it increased / decreased in value since the transfer. What if you'd retired and spent a large chunk of it paying off your mortgage? This is so ludicrous it doesn't bare thinking about.

MX5huggy

Completely bizarre, who’s the meeting with on Thursday? Don’t say a thing in that meeting don’t answer any questions, you’ll need specific legal advice I expect. 

Col349

It seems that since I transferred a small pension into my DB pension about 15 years ago (final salary pension was frozen 2010) they have calculated the free years (?) or the additional amount this would give wrongly.  This leads me to think that there are a few more people like me in my company (maybe like me they came to this forum to find out if there was anything they could do?)
They graciously (?) said I could keep any profit I had made (not much) and there wouldn't be any tax liability since it would be a direct transfer from my pot back to theirs (I haven't retired yet) and if there was a loss they would discuss a reduced payment.

From my viewpoint Thursday is a 'see what they say' day and agree to nothing

Thanks for replies