CETV overpayment notification

ukbpen1964

I have just received an email from Mercer (18 months after taking early retirement) to say that my final guaranteed CETV transfer value was incorrect and have asked me to payback the overpayment

Question - 

I thought legally a final guaranteed CETV transfer value was final and could not be changed ??  Is this correct or not ?? Is the final figure not checked by the Trustees, Pension administrators, and a pensions actuary before its issued ? 

I had lots of issues with Mercer in the run up to my early retirement with poor service and incorrect CETV quotations which changed from £892k to £628k to 729k - I then put in a formal complaint via the trustees in DEC 2019 as I had originally based my decision to take early retirement on the first quotation of £892k which they later came back and said that it had been miscalculated and then came back and said it was only £628k. Upon making the formal complaint the CETV figure was reviewed and then came back with another figure of £729k but said it wasn’t guaranteed until I left the scheme as markets and factors could go up as well as down, and they could provide me with a guaranteed CETV transfer figure once I had left the scheme.

On leaving the company in June 2020 after 32 years’ service - I was then sent my final CETV guaranteed offer by Mercer which was £854k to which I accepted, completed the paperwork and started the transfer process to transfer out of the scheme via my IFA. I took my 25% tax free money and invested the rest into a Scottish Widows SIPP to drawdown as needed. Since then I have moved over to Northern Ireland and bought a larger property using my 25% tax free money and the rest is still in my Scottish Widows SIPP which at last time of looking had gone down in value vs. original investment due to war in Ukraine. So where do I stand legally –

Questions

• Do I have to pay back the CETV money as it was supposedly guaranteed ?
• As I have already spent my 25% tax free monies – what happens now – especially as the rest of my pot has already been transferred into a SW SIPP
• Reading the forum – I understand that they cannot take any money off me without my permission, or by them going to court – is this correct ?
• Can I make a claim against Mercer’s incompetence as they caused the issue – do I make a claim for distress and financial loss?
• How should I play this with Mercer as I have lost all faith in their ability to provide correct information – how do I know the latest figure they have come up with is correct ???

I am no pension expert but we rely on these professional people to give us the correct figures to enable me to make an informed decision on our financial futures.. fool us !!! 

As you can imagine this is very stressful and the mess is not of my own doing - so any help with the above would be appreciated ???

ukbpen1964

I should have mentioned I was transferring out of my company DB scheme

JoeCrystal

What does your IFA say on this matter?

Marcon

ukbpen1964 said:

I have just received an email from Mercer (18 months after taking early retirement) to say that my final guaranteed CETV transfer value was incorrect and have asked me to payback the overpayment

Question - 

I thought legally a final guaranteed CETV transfer value was final and could not be changed ??  Is this correct or not ?? Is the final figure not checked by the Trustees, Pension administrators, and a pensions actuary before its issued ? 

I had lots of issues with Mercer in the run up to my early retirement with poor service and incorrect CETV quotations which changed from £892k to £628k to 729k - I then put in a formal complaint via the trustees in DEC 2019 as I had originally based my decision to take early retirement on the first quotation of £892k which they later came back and said that it had been miscalculated and then came back and said it was only £628k. Upon making the formal complaint the CETV figure was reviewed and then came back with another figure of £729k but said it wasn’t guaranteed until I left the scheme as markets and factors could go up as well as down, and they could provide me with a guaranteed CETV transfer figure once I had left the scheme.

On leaving the company in June 2020 after 32 years’ service - I was then sent my final CETV guaranteed offer by Mercer which was £854k to which I accepted, completed the paperwork and started the transfer process to transfer out of the scheme via my IFA. I took my 25% tax free money and invested the rest into a Scottish Widows SIPP to drawdown as needed. Since then I have moved over to Northern Ireland and bought a larger property using my 25% tax free money and the rest is still in my Scottish Widows SIPP which at last time of looking had gone down in value vs. original investment due to war in Ukraine. So where do I stand legally –

Questions

• Do I have to pay back the CETV money as it was supposedly guaranteed ?
• As I have already spent my 25% tax free monies – what happens now – especially as the rest of my pot has already been transferred into a SW SIPP
• Reading the forum – I understand that they cannot take any money off me without my permission, or by them going to court – is this correct ?
• Can I make a claim against Mercer’s incompetence as they caused the issue – do I make a claim for distress and financial loss?
• How should I play this with Mercer as I have lost all faith in their ability to provide correct information – how do I know the latest figure they have come up with is correct ???

I am no pension expert but we rely on these professional people to give us the correct figures to enable me to make an informed decision on our financial futures.. fool us !!! 

As you can imagine this is very stressful and the mess is not of my own doing - so any help with the above would be appreciated ???

Contact https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-problems for free, impartial and expert help. You aren't the first person to have this sort of problem (although I'm sure it feels that way), and sometimes much can hinge on the exact wording of the form of discharge you would have had to sign before the transfer could proceed.

JoeCrystal said:

What does your IFA say on this matter?

Hopefully they too have pointed OP in the direction of MoneyHelper. 

sandsy

There was a similar thread not so long ago, have eventually managed to find it:

https://forums.moneysavingexpert.com/discussion/6266443/db-pension-transferred-now-they-want-some-money-back/p1

Might give you a few other ideas on how to move forward.

ukbpen1964

This is a great starting point and has given me lots to consider and read ....  I will keep you updated

ukbpen1964

At first the IFA said tell them to do one - but after checking with his senior manager he thought they could claim back the overpayment - but as one of the threads pointed out this was for a DB pension payment - not a CETV transfer.  I will start to check all my transfer documents to see what they say ??  There is probably weezel words hidden in there somewhere to pass liability back to me... 

ex-pat_scot

the trustees have a duty to safeguard the assets of the scheme.
If there has been an error, they are legally bound to seek repayment of it.
If I recall, the previous threads cover similar ground.
You are not an expert, and cannot be expected to exercise expert judgment on whether offer that was made to you was incorrect or not, unless it is preposterous. Likewise your FA would be reasonably expected to spot a humdinger of an error, but not to check closely the accuracy (or recalculate).

As you have noted, you have made life choices and financial investments based on the figures quoted and received.
Their error has had irreversible consequences for you. These are likely material to you, but not the scheme.
It would be difficult for the scheme to achieve full repayment, even though they are legally required to request it.
Much will depend on the amount, your ability to (re)pay, your other income and assets, whether they can indeed put you back on some sort of equivalent footing to that you should have had.
Frankly, if the correct amount would be significantly lower, then you would reasonably argue you would have chosen a different course of action at the time, with perhaps longer working before retirement, a different outcome on transfer, a different house purchased etc. Putting that right might likely overshadow the simplistic overcalculated payment.
Time for legal advice, if the trustees press the matter further. 
I rather suspect CAB and tPR, as well as Money and Pensions advice service, should also be able to provide guidance

ukbpen1964

Thanks for your comments and input - its a minefield and I think proper legal advice is definitely needed here ..... but I will try TPR, as well as Money and Pensions advice service to get there views first. The company DB scheme was closed by my previous employer last year - so I'm not sure about asking the trustees to be reinstated in the DB Scheme.  One suggestion was to go back in and ask for another CETV but would this still be possible and would I now be classed as a deferred member and not an active member - and be penalised with higher ERFs ???  Thoughts ?

    

Albermarle

the trustees have a duty to safeguard the assets of the scheme.
If there has been an error, they are legally bound to seek repayment of it.

My simplistic view would be that the Trustees should ask Mercer to cough up any shortfall, as they messed up in the first place.

As the OP has found ( and many others ) they are prone to making a lot of mistakes, and are always very slow to respond to anything . If they have to pay for their own errors maybe they would sharpen up their act .

ex-pat_scot

Albermarle said:

the trustees have a duty to safeguard the assets of the scheme.
If there has been an error, they are legally bound to seek repayment of it.

My simplistic view would be that the Trustees should ask Mercer to cough up any shortfall, as they messed up in the first place.

As the OP has found ( and many others ) they are prone to making a lot of mistakes, and are always very slow to respond to anything . If they have to pay for their own errors maybe they would sharpen up their act .

Indeed. The service contract between trustees and Mercers would require them to exercise professional care and judgment. They will be covered by Professional Indemnity insurance, although would likely not hit the minimum for a claim.