Aegon Pension Loss

Davekeen57

Hi I've talked to Aegon after they confirmed they had no responsibility for  my pot dropping by 25% ish and losing 42k after being placed into Pension Ready last year by them. They did uphold on the phone that they should have communicated when I first got in touch when the 42k was still there and had just started to go down. I mentioned if they had then I would likely still have my money. The lady apologised and repeated the official line. any Ideas? I retire in a few months. Perfect timing.

Ayr_Rage

Did they tell you the value of investments may go down as well as up when you moved funds to them ?

What are the underlying investments ?

dunstonh

Hi I've talked to Aegon after they confirmed they had no responsibility for  my pot dropping by 25% ish and losing 42k after being placed into Pension Ready last year by them. 

That seems like a fair and accurate response. Aegon were not responsible for the events that turned 2022 into a negative year.

. any Ideas? I retire in a few months. Perfect timing.

Ideas about what?

DE_612183

Davekeen57 said:

Hi I've talked to Aegon after they confirmed they had no responsibility for  my pot dropping by 25% ish and losing 42k after being placed into Pension Ready last year by them. They did uphold on the phone that they should have communicated when I first got in touch when the 42k was still there and had just started to go down. I mentioned if they had then I would likely still have my money. The lady apologised and repeated the official line. any Ideas? I retire in a few months. Perfect timing.

Most pensions lost money last year, some of mine have started to recover - depending on when you take them will dictate if you have lost or not - if you can hold out while they recover - that is the best option

Pat38493

Perhaps OP is saying that the pot was automatically moved into a lifestyle option due to the fund being in a lifestyling scheme?

I have a similar thing with Aegon - I wrote to them 6 weeks ago asking them how I can stop my fund from being moved without my permission as it's not clear from any of the documentation (other than completely moving it out of the current default).  They have not replied after 6 weeks.  Luckily I have a few years before this is due to kick in.

In any case, as mentioned above nearly all funds lost money last year, so the losses of 25% may be entirely down to it being a bad year.  That said, if the fund was moved entirely from equity to bonds due to approaching NRA, because last year was unusually an even worse year for some bonds than equities, this could have caused an increased drop.

In my opinion, pension funds should not move you into a different fund without asking you, even if you are in a lifestyle option - there will be lots of people who just left the employer to do this and will certainly not have set a reminder in their calendar to follow up 25 years later or suchlike.

gm0

Sadly they are likely correct.  They don't "trade" for you in pursuit of performance.  They follow the scheme rules.  That's it. 
They will not make you whole to some arbitrary hindsight based alternative or the outcome of the prior asset allocation unless they should not have done the switch.

This is on the assumption you were opted into this Pension Ready plan i.e. they did what they were obliged to do under the plan - and had they not - you would have had grounds for complaining about them failing to follow the rules of the scheme for someone of your age and options.

Best case if they missed some admin letter or email - reminding you promptly - a small compensation payment for a complaint about admin failure.  The "missing letter" - ah I would have made this trade had I known - approach is unlikely to be fruitful - but you can of course raise a formal complaint and spin the FOS wheel of fortune thereafter.  As you choose.

Key is the process (likely long ago) where you actively signed up (or were defaulted by trustees absent making another choice as a condition of joining. Opted into a retirement age plan (PensionReady). That is likely the where and when of how you agreed that they should do this action.  If you did (or the scheme defaults applied) then a complaint about them doing this switch innappropriately will likely fail.

On the other hand if you have never opted (or been opted automatically at joining) into such a plan - and they did it arbitrarily to the wrong account then you may have much better grounds for a "put me back" as  though the fund switching change had not incorrectly happened to me type of complaint.

Marcon

Davekeen57 said:

Hi I've talked to Aegon after they confirmed they had no responsibility for  my pot dropping by 25% ish and losing 42k after being placed into Pension Ready last year by them. They did uphold on the phone that they should have communicated when I first got in touch when the 42k was still there and had just started to go down. 

Unless Aegon have actively done something contrary to your instructions, it's hard to see what valid complaint you have, other than being understandably very upset that your fund has gone down at the most inconvenient time. 'Upholding' is probably putting it a bit strongly - sounds as if the lady you spoke to did no more than agree it might have been a good idea to confirm to you that they'd carried out your investment instructions, which may well have been given many years in the past.

Davekeen57 said:

 I mentioned if they had then I would likely still have my money. 

Why do you think that? You could have lost even more had you switched to different funds. When did you last review/switch your investments with Aegon?

dunstonh

Perhaps OP is saying that the pot was automatically moved into a lifestyle option due to the fund being in a lifestyling scheme?

Possible but lifestyle selection is chosen at the outset.   Whilst Aegon have been moving their old Scot Eq pensions to RR, they have been retaining the same funds and lifestyle process for those.  So, nothing changed from what the pension holder selected at the outset (or their last adjustment, if one)

In any case, as mentioned above nearly all funds lost money last year, so the losses of 25% may be entirely down to it being a bad year.  That said, if the fund was moved entirely from equity to bonds due to approaching NRA, because last year was unusually an even worse year for some bonds than equities, this could have caused an increased drop.

Indeed. Gilts suffered 30% losses last year.   So, the heavier you were in gilts (or technology - which suffered circa 50% losses) then the more likely you had bigger losses.

In my opinion, pension funds should not move you into a different fund without asking you, even if you are in a lifestyle option - there will be lots of people who just left the employer to do this and will certainly not have set a reminder in their calendar to follow up 25 years later or suchlike.

Pension providers do not move your funds without notification.   The lifestyle risk reduction process is documented and supplied and the decision is made by the pension holder if they want that or not.     The whole point of it is to automate the process for people that are not likely to be bothered to take on the decision-making for themselves or use an adviser to do it for them.

They are damned if they do and damned if they don't.

Pat38493

dunstonh said:

Pension providers do not move your funds without notification.   The lifestyle risk reduction process is documented and supplied and the decision is made by the pension holder if they want that or not.     The whole point of it is to automate the process for people that are not likely to be bothered to take on the decision-making for themselves or use an adviser to do it for them.

They are damned if they do and damned if they don't.

Right but it's often in the past been the default option that applied if you did nothing, and so I wouldn't necessarily describe you having been opted into something by doing nothing many years early, as clear and timeline notification.  I suspect that different pension providers have different approaches here because there was a thread a few weeks ago here where someone had been proactively notified that their move to a "retire year x" fund was going to kick in soon and they should take action if they did not want it.  To me that's good customer service regardless of legal obligations.

Albermarle

Pat38493 said:

dunstonh said:

Pension providers do not move your funds without notification.   The lifestyle risk reduction process is documented and supplied and the decision is made by the pension holder if they want that or not.     The whole point of it is to automate the process for people that are not likely to be bothered to take on the decision-making for themselves or use an adviser to do it for them.

They are damned if they do and damned if they don't.

Right but it's often in the past been the default option that applied if you did nothing, and so I wouldn't necessarily describe you having been opted into something by doing nothing many years early, as clear and timeline notification.  I suspect that different pension providers have different approaches here because there was a thread a few weeks ago here where someone had been proactively notified that their move to a "retire year x" fund was going to kick in soon and they should take action if they did not want it.  To me that's good customer service regardless of legal obligations.

I agree with the above and I think they are probably more pro active than they used to be. However you are always going to hit the problem where probably the majority of the clients, will probably not read any info sent to them properly (if they read it at all) or just not really understand the options however well they are explained and/or sort of understand it but do nothing about it.

Marcon

Pat38493 said:

dunstonh said:

Pension providers do not move your funds without notification.   The lifestyle risk reduction process is documented and supplied and the decision is made by the pension holder if they want that or not.     The whole point of it is to automate the process for people that are not likely to be bothered to take on the decision-making for themselves or use an adviser to do it for them.

They are damned if they do and damned if they don't.

Right but it's often in the past been the default option that applied if you did nothing, and so I wouldn't necessarily describe you having been opted into something by doing nothing many years early, as clear and timeline notification.  I suspect that different pension providers have different approaches here because there was a thread a few weeks ago here where someone had been proactively notified that their move to a "retire year x" fund was going to kick in soon and they should take action if they did not want it.  To me that's good customer service regardless of legal obligations.

Experience has shown that if a customer has been entirely passive throughout the whole time they've been saving, they rarely wake up and do something (e.g. respond to an email or letter about fund choices) at the end of the process. That said, I completely agree it's a good idea to at least give it a go(!) - but that doesn't mean a provider is 'wrong' to follow longstanding instructions from a customer.