LGPS Incorrect statements.

Duffymich

Hi,
Over the last 6 years, I have been receiving my LGPS deferred pension statements, and everything looked fine.  This year, my statement arrived and almost all of my figures were halved, I was devastated as it was a healthy final salary scheme.  I was told incorrect figures had been entered during the pension being transferred.  I am devastated and angry.  Should I be referring this case to the Financial Ombudsman for pensions or seeking some sort of compensation?   Cheers.

xylophone

I was told incorrect figures had been entered during the pension being transferred. 

What exactly do you mean?

Silvertabby

Duffymich said:

Hi,
Over the last 6 years, I have been receiving my LGPS deferred pension statements, and everything looked fine.  This year, my statement arrived and almost all of my figures were halved, I was devastated as it was a healthy final salary scheme.  I was told incorrect figures had been entered during the pension being transferred.  I am devastated and angry.  Should I be referring this case to the Financial Ombudsman for pensions or seeking some sort of compensation?   Cheers.

First step would be to ask for more information - ie, exactly what went wrong.  If you believe that your LGPS are guilty of maladministration, then your initial official complaint should be made through your LGPS's own internal disputes resolution procedure.

If they are unable/unwilling to resolve this, then you may ultimately progress your complaint to the Pensions Ombudsman. (Your LGPS will tell you how to do this).

However, I have to be perfectly honest with you and say that if a genuine mistake had been made, the Ombudsman won't order your LGPS to pay you the original estimate - or to pay you much in the way of compensation.  The Ombudsman's ruling in similar cases has been that the pension provider has a duty to all scheme members to ensure that only the correct amounts are paid, but with the scheme being ordered to pay a one-off sum of £500 or so as compensation for the  'disappointment' caused by the incorrect estimates.

I know this isn't what you want to hear, but I can only be honest with you.  Annual benefit statements are only estimates, and I'm sure you'll find that your statements carry the rider that 'this is just an estimate and is not guaranteed' or words to that effect.

I wonder how this has come to light after all this time?  Possibly due to the GMP revaluation excercise, which has been dragging on for a while now?  Can only guess that the GMP figures confirmed by HMRC were way different to the figures on your records, hence the complete recalculation.

hyubh

Duffymich said:

Over the last 6 years, I have been receiving my LGPS deferred pension statements, and everything looked fine.  This year, my statement arrived and almost all of my figures were halved, I was devastated as it was a healthy final salary scheme.  I was told incorrect figures had been entered during the pension being transferred.  I am devastated and angry.  Should I be referring this case to the Financial Ombudsman for pensions or seeking some sort of compensation?

You're 'devastated' at an incorrect ABS that got corrected when you queried it...? I'm genuinely perplexed at what you think you should be compensated for. (That said, it would be the Pensions Ombudsman rather than the Financial Ombudsman.)

If however you mean the 'halving' was confirmed correct (rather than incorrect), well in general terms you would need to be able to show you irreversibly changed your plans because of the falsely higher figure.

dunstonh

However, I have to be perfectly honest with you and say that if a genuine mistake had been made, the Ombudsman won't order your LGPS to pay you the original estimate - or to pay you much in the way of compensation.  The Ombudsman's ruling in similar cases has been that the pension provider has a duty to all scheme members to ensure that only the correct amounts are paid, but with the scheme being ordered to pay a one-off sum of £500 or so as compensation for the  'disappointment' caused by the incorrect estimates.

This basically mirrors a case I had many years ago.  The pension statements were wrong for many years.  The person retired and moved out of London before commencing the pension.  Once settled, they went to start the pension only to be told there was an error in the statements and they would only get a fraction.   A complaint was rejected and the ombudsman also rejected it but awarded £400 inconvenience.    The response was that a mistake does not give you the right to money that you were never entitled to in the first place.   Often the mistake is obvious.   Wrong start date/years count.   Wrong pensionable salary.   Or when moved from one system to another and the wrong figure used resulting in a big jump that should have been noticed (in some cases they are but the person may keep quiet and hope it isn't noticed by the administrator).

Duffymich

Apologies, I haven’t worked out how to respond to individuals, so this should answer some of the queries raised from my initial thread.  Xylophone, the pension company stated the following : I have received a reply below from Technical and it appears that the previous statements were over stated due to reductions not being applied correctly due to the data not migrating correctly when WYPF took over the service from Hounslow.

Silvertabby, thank you for your honest and constructive feedback, I will act on your recommendations.

hyubh, sorry to hear you were perplexed.  The figures were presented to me prior to me retiring, in fact they helped me make a decision with regard to retiring early as the LGPS seemed attractive for when the time came to activate and claim my pension amounts.  With six years of statements, I assumed the figures were correct, I had no reason to think otherwise.  Now that I have been issued figures which halve my pension, and instead of getting a 45k lump sum, I will be getting a 12k lump sum, this may explain why I felt devastated, but that emotion has turned to anger, where I have been given false information for six years.

dunstonh, thank you for taking the time to respond, it appears this is a common occurrence in LGPS pensions.  

Thank you to all of you for your feedback.  I will be ringing on Monday for a conversation, then I will take it from there.

Cheers.

hyubh

Apologies, I haven’t worked out how to respond to individuals,

It ain't that hi tech ;-)

I have received a reply below from Technical and it appears that the previous statements were over stated due to reductions not being applied correctly due to the data not migrating correctly when WYPF took over the service from Hounslow.

WYPF took on the Hounslow admin contract, from Capita, from August 2018.

With six years of statements, I assumed the figures were correct, I had no reason to think otherwise. 

So the issue started prior to WYPF, when Capita was the administrator...?

The figures were presented to me prior to me retiring, in fact they helped me make a decision with regard to retiring early as the LGPS seemed attractive for when the time came to activate and claim my pension amounts.  With six years of statements, I assumed the figures were correct, I had no reason to think otherwise.  Now that I have been issued figures which halve my pension

So... you were interested in an early retirement, so requested a formal estimate, at which point the data error was found...?

sheslookinhot

Just a comment, are you not able to work out a forecast pension yourself, based on final salary, number of years worked and on what basis the scheme calculates your entitlement, I.e. 40/60ths, 40/80ths etc ?

woolly_wombat

Duffymich said:

Apologies, I haven’t worked out how to respond to individuals, so this should answer some of the queries raised from my initial thread.  Xylophone, the pension company stated the following : I have received a reply below from Technical and it appears that the previous statements were over stated due to reductions not being applied correctly due to the data not migrating correctly when WYPF took over the service from Hounslow.

Silvertabby, thank you for your honest and constructive feedback, I will act on your recommendations.

hyubh, sorry to hear you were perplexed.  The figures were presented to me prior to me retiring, in fact they helped me make a decision with regard to retiring early as the LGPS seemed attractive for when the time came to activate and claim my pension amounts.  With six years of statements, I assumed the figures were correct, I had no reason to think otherwise.  Now that I have been issued figures which halve my pension, and instead of getting a 45k lump sum, I will be getting a 12k lump sum, this may explain why I felt devastated, but that emotion has turned to anger, where I have been given false information for six years.

dunstonh, thank you for taking the time to respond, it appears this is a common occurrence in LGPS pensions.  

Thank you to all of you for your feedback.  I will be ringing on Monday for a conversation, then I will take it from there.

Cheers.

.
Please do keep us posted on the outcome. 

I have had widely differing statements from my local LGPS over the years, although the last person I spoke to a couple of years ago did seem very clued up.

Silvertabby

woolly_wombat said:

Duffymich said:

Apologies, I haven’t worked out how to respond to individuals, so this should answer some of the queries raised from my initial thread.  Xylophone, the pension company stated the following : I have received a reply below from Technical and it appears that the previous statements were over stated due to reductions not being applied correctly due to the data not migrating correctly when WYPF took over the service from Hounslow.

Silvertabby, thank you for your honest and constructive feedback, I will act on your recommendations.

hyubh, sorry to hear you were perplexed.  The figures were presented to me prior to me retiring, in fact they helped me make a decision with regard to retiring early as the LGPS seemed attractive for when the time came to activate and claim my pension amounts.  With six years of statements, I assumed the figures were correct, I had no reason to think otherwise.  Now that I have been issued figures which halve my pension, and instead of getting a 45k lump sum, I will be getting a 12k lump sum, this may explain why I felt devastated, but that emotion has turned to anger, where I have been given false information for six years.

dunstonh, thank you for taking the time to respond, it appears this is a common occurrence in LGPS pensions.  

Thank you to all of you for your feedback.  I will be ringing on Monday for a conversation, then I will take it from there.

Cheers.

.
Please do keep us posted on the outcome. 

I have had widely differing statements from my local LGPS over the years, although the last person I spoke to a couple of years ago did seem very clued up.

In theory, deferred benefit statements should be fairly accurate, because of the checks carried out when the record is put into deferred status.  But mistakes do happen, as OP has found out.

Live service  annual benefit statements, however, are only as accurate as the year end information supplied by the employer.  The LGPS software picks up and 'red flags' any records which have changed by a higher than expected amount, so it can be checked by a pensions administrator, but cumulative small 'errors' can and do rack up.

xylophone

OP, are you saying that until six years ago, you were an active member of Hounslow LGPS, then administered by Capita?

Were you receiving an annual statement of benefits?

Did you receive a statement of deferred benefits on leaving the scheme?