USS - General discussion

Barralad77

swindiff said:

I am sure you will have all received this email?

According to our records, you used our Benefit Calculator between 26 April and 27 May this year.

We've identified that during this time the calculator was over-estimating the value of some members' Retirement Income Builder benefits, therefore you should not use the estimates provided for financial planning.

The reason this has happened, is that when we updated your record in April to add in the last year of pension built up, the Benefit Calculator used a higher amount for this year in error.

This problem has now been resolved, and you can log in to myuss and navigate to the "Your Pension" section to rerun your illustrative projections via the Benefit Calculator.

We apologise for any inconvenience this may have caused.

The USS team.

Yes. Am actually surprised that they caught it (I thought that only we were the ones doing that….). Simply confirms my view that the calculator shouldn’t be trusted. As for 13FL’s situation, it begs a serious question. Namely, if they provide a quote based on erroneous numbers, do they not have to honour that quote? The online calculator is one thing (and there’s a line about it being merely an estimate that is subject to change etc.) but a quote is something else entirely. Will await the outcome.

gwt1965

 Namely, if they provide a quote based on erroneous numbers, do they not have to honour that quote? 

No. They have to pay what is due under the scheme rules. 

Barralad77

gwt1965 said:

 Namely, if they provide a quote based on erroneous numbers, do they not have to honour that quote? 

No. They have to pay what is due under the scheme rules. 

That makes the scenario worse than I thought, then. The online calculator can’t be trusted (that’s become abundantly clear) but the quote provided shouldn’t be trusted either? People will be taking potentially life-changing decisions based on what USS has told them they will receive, but if it turns out that the information provided is wrong and they get considerably less, then ‘tough’: that sounds as though it shouldn’t be possible due to the fact that the individual has clearly been misled. It looks increasingly as though everyone needs to work out for themselves how to calculate their own annuity value as the information provided by USS - however it’s provided - doesn’t have to be correct. Which feels worse than useless.

ussdave

Barralad77 said:

gwt1965 said:

 Namely, if they provide a quote based on erroneous numbers, do they not have to honour that quote? 

No. They have to pay what is due under the scheme rules. 

That makes the scenario worse than I thought, then. The online calculator can’t be trusted (that’s become abundantly clear) but the quote provided shouldn’t be trusted either? People will be taking potentially life-changing decisions based on what USS has told them they will receive, but if it turns out that the information provided is wrong and they get considerably less, then ‘tough’: that sounds as though it shouldn’t be possible due to the fact that the individual has clearly been misled. It looks increasingly as though everyone needs to work out for themselves how to calculate their own annuity value as the information provided by USS - however it’s provided - doesn’t have to be correct. Which feels worse than useless.

I don't think this is just a USS thing though.  There's a few threads where people have got as far as being retired for years before being contacted by the pension provider of an error and initiation of clawing back of the money.

Barralad77

Which sounds wrong in every way: it’s like the buyer who has to pay for the seller’s mistake:

Buyer: “How much is this?”
Seller: “£200”
Buyer: “OK, there’s £200. Thanks”
[6 months later]

Seller: “Sorry, I meant £300. You owe me £100”

This doesn’t sound too far removed from that, does it?

ussdave

Agreed, it feels horrifically unfair for the individual.  I can see the point raised in other threads though that the trustees have a duty to protect all the member's funds, not just those of the individual, so therefore they need to recover the money.

...which seems okay, I suppose.  I'd prefer it if there was something more like they had some form of insurance to cover for administrative errors like this (which would still cost the members ultimately, but pooled risk and all that).

Barralad77

That’s the central point: it’s their duty to protect everyone in the scheme, not mine or anyone else’s. The trustees also have a duty to not provide me with misleading information that determines a decision on the rest of my life, either, I’m assuming?

Agreed about factoring in some form of insurance against this. I imagine a small increment to the running costs might suffice. Yes, the cost would fall on the members but it would be so small that no-one would barely notice. An extra 0.1% in contributions? 

ussdave

I've no idea what it would cost but it does feel like it would be a drop in the ocean compared to the overall fees, yeah.

QrizB

Barralad77 said:

That’s the central point: it’s their duty to protect everyone in the scheme, not mine or anyone else’s. The trustees also have a duty to not provide me with misleading information that determines a decision on the rest of my life, either, I’m assuming?

From previous threads,i t's not entirely cut and dried. See for example:

https://forums.moneysavingexpert.com/discussion/6166710/pension-overpayment

https://forums.moneysavingexpert.com/discussion/6481098/pension-overpayment-provider-wants-to-take-back-20k

There's a "change of position" argument that can be made, and the Ombudsman sometimes rules in favour of the pensioner. But it all depends on the facts of the individual case.

gwt1965

Barralad77 said:

Which sounds wrong in every way: it’s like the buyer who has to pay for the seller’s mistake:

Buyer: “How much is this?”
Seller: “£200”
Buyer: “OK, there’s £200. Thanks”
[6 months later]

Seller: “Sorry, I meant £300. You owe me £100”

This doesn’t sound too far removed from that, does it?

It's really nothing like that. 

When you get a quote from USS the heading is "Your Provisional Retirement Quote." The provisional quote makes the following point: "The figures provided are provisional and reflect scheme rules, legislation and the actuarial factors which are kept under regular review. Your actual retirement benefits will be calculated in accordance with the scheme rules, legislation and factors in force at the date of your retirement." 

The confirmation of benefits is only sent out a few weeks before your retirement date. 

Presumably if it was the other way around, and the quote was lower than the final figure, then you'd expect USS to make up the difference. But your main argument seems to be that the modeller/quote should be binding in some way.

If your retirement relies on a quote issued months in advance being 100% accurate, without the possibility of some very small percentage deviation, then you're probably not financially ready to retire. Things like changing early retirement factors etc are likely to be far more detrimental to your final position than the inaccuracies of benefit modeller estimations or provisional quotes.