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DB pension delays - compensation/interest ?
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af1963
Posts: 411 Forumite

Have been dealing with a pension administrator for approaching two years, trying to get them to start paying a DB pension. (not mine, for someone I'm helping). Lots of wrong calculations produced, and multiple long delays in responding (or not) to our queries.
They've finally (18 months late) paid out the chosen lump sum, the first monthly payment, and arrears from the missed months.
We're now about to chase them for compensation for the delays and errors. Does anyone have experience of how this would normally be compensated ? Are there standard procedures, or industry guidelines?
Late interest on all the missed payments, and at what rate ? Compensation for the time (dozens of hours' work) checking and finding their errors ? Compensation for the stress and hassle involved ?
They've finally (18 months late) paid out the chosen lump sum, the first monthly payment, and arrears from the missed months.
We're now about to chase them for compensation for the delays and errors. Does anyone have experience of how this would normally be compensated ? Are there standard procedures, or industry guidelines?
Late interest on all the missed payments, and at what rate ? Compensation for the time (dozens of hours' work) checking and finding their errors ? Compensation for the stress and hassle involved ?
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I have had compensation from DC pension providers, over delays and mistakes, but nothing from a DB administrator for similar ( although not quite as bad as the person you are helping).0
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I was always told that you can't get compensation from a DB pension administrator as that would be a detriment to others in the scheme and therefore unfair. But that might depend if it's coming from the administrator or the fund.I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe, Old Style Money Saving and Pensions boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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af1963 said:Have been dealing with a pension administrator for approaching two years, trying to get them to start paying a DB pension. (not mine, for someone I'm helping). Lots of wrong calculations produced, and multiple long delays in responding (or not) to our queries.
They've finally (18 months late) paid out the chosen lump sum, the first monthly payment, and arrears from the missed months.
We're now about to chase them for compensation for the delays and errors. Does anyone have experience of how this would normally be compensated ? Are there standard procedures, or industry guidelines?
Late interest on all the missed payments, and at what rate ? Compensation for the time (dozens of hours' work) checking and finding their errors ? Compensation for the stress and hassle involved ?
The trustees are ultimately responsible for ensuring the scheme is run correctly, so need to know what's going on - and it is for them to sort out with the administrators who pays for any lost interest, compensation for distress and inconvenience etc.
The strongest way to present the complaint is to keep emotion to an absolute minimum, however tempting it may to let fly. A chronology of events - nothing fancy, a simple table showing dates/who contacted whom/what was said/done is all that is required. I doubt anyone kept a neat little record as you went along, so don't fret too much if you can't be precise.
At this stage I'd be vague about what exactly you want to happen, and simply say your friend is looking for reassurance that the figures are now finally correct, plus 'appropriate redress for prolonged maladministration which resulted in the need to spend many hours attempting to obtain revised figures and put the pension into payment; and gave rise to considerable distress and inconvenience'. Those particular phrases will ring immediate bells with the administrators, who will recognise them as being a prelude to a trip to the Pensions Ombudsman if they don't get things sorted.
You can't normally go straight to the Pensions Ombudsman - you need to complete the scheme's IDRP first and hope that cracks the problem, because the waiting list to get the PO to deal with it is very long indeed.
Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!1 -
Brie said:I was always told that you can't get compensation from a DB pension administrator as that would be a detriment to others in the scheme and therefore unfair. But that might depend if it's coming from the administrator or the fund.Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!1
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Financial : From my knoweldge any calculation would ordinarily look at the BOE base rate, which i believe is the rate the Ombudsman would say to use (i think they do have power in exceptional circumstances to use a different rate) should your complaint reach them and they rule in your favour.
Non-financial : Depending on the circumstances , Ombudsman could request various levels of redress for the distress caused (delays, time spent by yourself, response level of the administrator, etc) . https://www.pensions-ombudsman.org.uk/sites/default/files/publication/files/Updated-Non-financial-injustice-September-2018-2_0.pdf1 -
Thanks - useful link in that previous post.
Will certainly ask for compensation for the hassle and stress, but I think the most significant loss incurred is due to the lateness of the payments. Getting a lump sum of (let's say for example) £50k now rather than when it was due in 2022 means it buys significantly less than it should have done. And each monthly payment since then is also worth less.
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af1963 said:Thanks - useful link in that previous post.
Will certainly ask for compensation for the hassle and stress, but I think the most significant loss incurred is due to the lateness of the payments. Getting a lump sum of (let's say for example) £50k now rather than when it was due in 2022 means it buys significantly less than it should have done. And each monthly payment since then is also worth less.Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!1 -
af1963 said:Thanks - useful link in that previous post.
Will certainly ask for compensation for the hassle and stress, but I think the most significant loss incurred is due to the lateness of the payments. Getting a lump sum of (let's say for example) £50k now rather than when it was due in 2022 means it buys significantly less than it should have done. And each monthly payment since then is also worth less.
You should be able to claim for loss of interest on that Lump Sum also. I know last you could get 6.10% on a savings account with Charter Savings. For £50K that works out at £3050 per year in interest…not to be sniffed at. Money Helper can also help but Marcon has given you very useful info indeed. It’s the loss of time not having the funds and enjoying retirement that I feel has impacted the most. You can’t ever get that time back. Could have continued to earn an income etc. etc….0 -
Marcon said:af1963 said:Have been dealing with a pension administrator for approaching two years, trying to get them to start paying a DB pension. (not mine, for someone I'm helping). Lots of wrong calculations produced, and multiple long delays in responding (or not) to our queries.
They've finally (18 months late) paid out the chosen lump sum, the first monthly payment, and arrears from the missed months.
We're now about to chase them for compensation for the delays and errors. Does anyone have experience of how this would normally be compensated ? Are there standard procedures, or industry guidelines?
Late interest on all the missed payments, and at what rate ? Compensation for the time (dozens of hours' work) checking and finding their errors ? Compensation for the stress and hassle involved ?
The trustees are ultimately responsible for ensuring the scheme is run correctly, so need to know what's going on - and it is for them to sort out with the administrators who pays for any lost interest, compensation for distress and inconvenience etc.
The strongest way to present the complaint is to keep emotion to an absolute minimum, however tempting it may to let fly. A chronology of events - nothing fancy, a simple table showing dates/who contacted whom/what was said/done is all that is required. I doubt anyone kept a neat little record as you went along, so don't fret too much if you can't be precise.
At this stage I'd be vague about what exactly you want to happen, and simply say your friend is looking for reassurance that the figures are now finally correct, plus 'appropriate redress for prolonged maladministration which resulted in the need to spend many hours attempting to obtain revised figures and put the pension into payment; and gave rise to considerable distress and inconvenience'. Those particular phrases will ring immediate bells with the administrators, who will recognise them as being a prelude to a trip to the Pensions Ombudsman if they don't get things sorted.
You can't normally go straight to the Pensions Ombudsman - you need to complete the scheme's IDRP first and hope that cracks the problem, because the waiting list to get the PO to deal with it is very long indeed.1 -
Resurrecting this to provide an update with the (fairly acceptable, I think) conclusion of the saga ...
We raised a formal complaint with the pension administrators about the multiple delays and errors. They stonewalled this and refused to offer any compensation at all, which we thought took a bit of brass neck when they'd delayed the pension payments by 18 months with their errors.
So we took it to the original employer's trustees through their internal dispute resolution procedure (IDRP). Did it as suggested above in Marcon's post, by just stating the facts and the chronology without getting angry or emotional. (It helped that we did in fact have a detailed record of all correspondence.)
It took them several more months to get there, but they accepted just about all our points of complaint and offered interest on all the late payments ( not a great interest rate, but enough so that the value of the money actually received was enough to more than match inflation during the delay period ), plus a £1500 compensation payment from the administrators, falling between the ombudsman's "Serious" and "Severe" categories.
Like Doglegger above, we thought about pushing it to the ombudsman but decided against. There comes a point that you just want it settled, and the offer was "good enough".
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