Late husbands COD payment from Pension Provider

gmje

1992 Dept of fiscal Studies Report " The personal pensions stampede" states Government makes a number of stipulations about converting "Protected Rights".........
"A third stipulation on converting the protected rights to an annuity 11 The personal pensions stampede is that life offices must offer a table of annuity rates that do not vary with the sex or marital status of the pensioner, though they may vary the rate with the age at which the fund is converted. Finally, the personal pension, like SERPS, must offer a half pension to a surviving spouse."

 

Marcon

https://forums.moneysavingexpert.com/discussion/comment/82082535#Comment_82082535

You're missing the point. The key date is the annuitant's marital status at the date they bought their annuity. The whole fund was used to buy your partner a single life annuity and there are therefore no funds to provide a spouse's pension now.

gmje

https://forums.moneysavingexpert.com/discussion/comment/82082556#Comment_82082556

OK thanks very much for your time

Marcon

In the hope it'll set your mind at rest that you aren't being 'done' by the insurer, I've gone back through the relevant legislation relating to protected rights. The report you are quoting from is dated 1992, but there were major revisions to protected rights legislation enacted a few years later (and a whole load more to follow, but I think this nails it): https://www.legislation.gov.uk/uksi/1996/1537/regulation/5/made

in particular:

Your late husband's annuity was indeed 'determined by reference to his life only' (ie did not provide a spouse's pension).

I appreciate this does nothing to change your financial position, but I very much hope that it will go some way to reducing the sense of injustice you've clearly been experiencing.

xylophone

It seems from earlier posts in the thread that although the OP was not married to her partner in 2008 (when he was seeking to take benefits from his contracted out/protected rights pension policy), he did explain to Prudential that he wanted a joint life annuity - it appears that at that time, a joint life annuity was the default for such policies unless the policy owner was unmarried, in which case he/she could decline and choose single life instead. See

https://forums.moneysavingexpert.com/discussion/comment/80532565/#Comment_80532565

It seems that Prudential stated that they would only offer the single life annuity. This may be because the Prudential rep was unaware that there was the default or may be because Prudential had made a commercial decision not to offer joint life annuities to unmarried persons. It is unclear whether or not there was any discussion about approaching another annuity provider.

The single life annuity was purchased. The OP subsequently married her partner who died within five years of commencing the annuity. Prudential made a couple of small payments to the OP (possibly in connection with a five year guarantee on the annuity) but naturally there were no ongoing regular pension payments to the OP.

The gravamen of the OP's complaint is that the Pru rep either had not received sufficient training to know that the joint life annuity was the default position for a policy with protected rights and so should have arranged it or did know that it was the default position but did not explain that joint life for unmarried persons was not available from Prudential?

At all events she is "out of time"?

gmje

https://forums.moneysavingexpert.com/discussion/comment/82082756#Comment_82082756

Thanks xylophone your correct in your summary we asked for joint life and it was refused. If this company were not playing dirty only the default should have been offered . We didn't know at the time we could have gone elsewhere - I think it was sometime later that this option had to be pointed out to customers and appeared in booklets. It never crossed our mind at that time everyone bought annuities from the original provider.

gmje

Thanks Marcon ive seen the legislation you quoted…..I still maintain we were pushed to take the single life for their benefit and to my detriment . but thankyou for your input

gmje

Hi guys - does this help me? its in the legislation

Enforceable entitlement after death of member

14.  Without prejudice to any other requirements, a personal pension scheme can be an appropriate scheme and an occupational pension scheme can be a money purchase contracted-out scheme only if the provision it makes for giving effect to the protected rights of a member who has died is such that any widow, widower or other person who is entitled to any payment giving effect to those rights is able to enforce that entitlement.

dunstonh

We didn't know at the time we could have gone elsewhere 

<snip>

I think it was sometime later that this option had to be pointed out to customers and appeared in booklets. 

In 2008, the open market option method had been around for a very long time. At that time, the provider had to give a "wake-up" or "options at retirement" packs in good time before vesting so the policyholder could consider their options. That pack included shopping around using the open market option.

The ABI “Disclosure of the Open Market Option” statement, was implemented into practice by about 2002

There was also an FSA factsheet that many providers included as part of the booklets called "your pension - It's time to choose".

What typically happens for people claiming they weren't told wasn't that they were not supplied the information, but that they didn't read it. These often look like booklets or flyers.

If this company were not playing dirty only the default should have been offered .

The problem with the default is that for some people it would be unsuitable and for others it would be suitable. No doubt those that it would be unsuitable for would be calling for the opposite.

Thanks Marcon ive seen the legislation you quoted…..I still maintain we were pushed to take the single life for their benefit and to my detriment . but thankyou for your input

There is no logic in that opinion. It made absolutely no difference to Zurich. One way or the other, the pension was getting transferred to an annuity, and that was the end of their service. It made absolutely no difference to Prudential, as annuity rates are based on gilt yields and underwriting. Include in a Dependent would have resulted in a lower annuity payment. Including indexation would also have resulted in a lower starting annuity payment.

Hi guys - does this help me? its in the legislation

No.

gmje

'm afraid based on what you've said, that's not the case. At the time he took out the annuity, your husband was unmarried and therefore the whole 'pot' was used to buy his single life annuity. Because there was no spouse's pension, he will have received a higher annuity than would otherwise have been the case

I disagree…………………this indicates not a higher rate for anyone

1996 Protected rights pensions act……

(2) The rate of the pension or annuity shall be determined—

without regard to     a)     without regard to the  sex of the member;  b  (i)  without regard to the marital status of the member and  b (iii)  if an unmarried member leaves a widow.........

protected rights derived from guaranteed minimum pensions by virtue of regulation 3(a) or payments or contributions in respect of employment in a tax year commencing before the principal appointed day, without regard to the marital status of the member;

(ii)a married me mber whose protected rights derived from section 9(2B) rights by virtue of regulation 3(b) or payments or contributions in respect of employment in a tax year commencing on or after the principal appointed day, on the basis that the member, in the event of his death, will leave a widow or widower; and

(iii)

an unmarried member whose protected rights derived from section 9(2B) rights by virtue of regulation 3(b) or payments or contributions in respect of employment in a tax year commencing on or after the principal appointed day, as if in the event of that member’s death he or she will leave a widow or widower, except where the member agreed to the rate being determined on his or her life only

Im not giving up yet