Gaining control over my pension

JoeCrystal

Malthusian said:

Others already said that DB schemes are legally not allowed to do that. As for the stakeholder, they are legally required to accept the transfer whether they're happy or not.

I am wondering what happened if the DB scheme realised and what is the correction is going to be? Could they ask for the money back for example?

Malthusian

JoeCrystal said:

I am wondering what happened if the DB scheme realised and what is the correction is going to be? Could they ask for the money back for example?

I have no idea. I can see it going both ways.

The argument for the money going back is that 1) errors aren't legally binding 2) pension money is held in trust for the member. If the member had withdrawn some money from the pension, then a "change of position" defence might prevent the new pension provider from recovering the money from the member.

What makes it particularly fraught is that you have to unwind two transfers: DB scheme -> stakeholder and stakeholder -> Ellierose's new pension.

It seems more likely that the error was at the adviser's end and not the DB scheme. I.e. the DB scheme asked the adviser to confirm that they gave full advice and the adviser said "yes". Rather than the adviser saying "no" and the DB scheme transferring the pension anyway. It was of no interest to the DB scheme whether the adviser had given abridged advice or not, it made no difference to them.

If that's the case, all three pension schemes involved may say that the transfers were carried out in good faith, and Ellierose should take it up with the adviser and claim any losses from them.

If the mistake was at the adviser's end, the DB scheme will never find out unless the adviser or the client tells them. (And if the adviser decides to fess up you would think they would do so to the client, not the DB scheme.)

Bear in mind that when a DB transfer has been missold (rather than signed off by mistake), the result is that the adviser is liable to pay compensation as a lump sum into the DC pension that the missold punter shouldn't have. There is an argument that the punter should be "put back into the position they should be" by having their missold DC pension converted into a deferred annuity on the same terms they would have in the DB scheme - but it has fallen on deaf ears.

Malthusian

Having thought about it further, I think I underestimated the unlikelihood of the DB scheme getting the money back.

The "errors are not legally binding" thing generally comes in when A pays too much money to B by accident and wants it back (and long-established law says A is generally entitled to it, in the absence of a change of position defence by B or suchlike).

In this case A has offered B a fair trade and B has accepted it. A has lost nothing. It was not legal to execute that trade, but if the fault was with the adviser (as seems likely), A wasn't to know that.

A doesn't want the money back (there's a reason you can't reverse DB transfers), and if they found out the obvious course of action is to tell B to take it up with the adviser and claim any losses from them, not our problem.

Let's take the less likely scenario where the DB scheme is at fault (the adviser said full advice was not given but the scheme misheard and transferred the CETV anyway).

In this case the DB scheme probably would want the money back, as it's likely to be considerably cheaper than full compensation at some unknown point down the line when she complains. However, would it be considered fair and reasonable for them to forcibly transfer her pension fund against her will, twice, purely to limit their own liability for their own mistake? I doubt it.

Ellierose

Thanks for responses and great to see either  my advisor or DB scheme has made a mistake which means could complain in future. I’ve retained all the paperwork and FCA rule book as of date of advice as evidence just in case. 

Malthusian

Ellierose said:

Thanks for responses and great to see either  my advisor or DB scheme has made a mistake which means could complain in future.

Bookmarked for the benefit of anyone who might try to claim in future that advisers are exaggerating the risk of complaints to justify eye-watering fees.

maddie65

Malthusian said:

Ellierose said:

Thanks for responses and great to see either  my advisor or DB scheme has made a mistake which means could complain in future.

Bookmarked for the benefit of anyone who might try to claim in future that advisers are exaggerating the risk of complaints to justify eye-watering fees.

Hi does this mean that it's still a high risk for them to get the pension out thank you 

Malthusian

maddie65 said:

Hi does this mean that it's still a high risk for them to get the pension out thank you 

Yes, and it always will be.

Cashing in a defined benefit pension is the single highest risk transaction that 99% of people can undertake in their lifetimes. The upfront cost of several thousand pounds is effectively insurance against making a bad decision.

michael1234

So having seen someone on this tyhread managed to transfer out a the DC element of his pension I thought I'd ask if it was possible for me. I got the reply below. It doesn't look like it 8-(

Thankfully I've still got 3 years before I hit 55 so maybe the rules will change again by then but if not its very frustrating. Feels like the money isn't real.


Thank you for your enquiry.

 

You can transfer all the benefits from the scheme, partial transfers are not allowed.

 

The <Company> Pension Plan is a hybrid occupational Money Purchase pension plan with a Contracted-Out Defined Benefit underpin.

 

The retirement benefits are purchased on the open market in the form of an annuity or annuities.

 

The transfer value is based on a Defined Benefit underpin and money purchase fund. If the defined benefit underpin calculation (which is the guaranteed part of the transfer value) is higher than the DC fund, then the DB guaranteed underpin element becomes the total transfer value payable and a shortfall is then added to the DC fund. However, if the DB underpin is less than the DC fund then the DC fund is the transfer value but has a guaranteed underpin part.

 

These figures cannot be directly compared with the retirement benefits available from the Plan as the underpin costs are determined by the annuity market.

Pord67

Just wanted to 'pay it forward ' and tell folk not to give up when trying to access their DB pension. I tried for 18 months, contacting IFA after IFA with absolutely no success. Thanks to this forum thread, and in particular to DeadlyD's recommendation, I contacted Pensionhelp as a last attempt. I'm delighted to say it resulted in success.

I won't go into my reasons for transferring out. Suffice to say it was absolutely right for my situation.