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Prudential Scottish Amicable and Scottish Widows GAR funds ALERT

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In 1980 my brother and I started a company. A few years later we started pension investment funds with Scottish Amicable - an 8.7% GAR (Guaranteed Annuity Rate) with profits fund. Over the years interest rates tumbled and the fund was closed. The members were transferred to an unrelated fund with a variable GAR.

I reached my NRD in 2016. Prudential forgot to notify me until I discovered this in 2017. Prudential admitted the error and agreed to put me back to the position I should have been in and gave me lump sum compensation and 8% interest simple (FSA Rule). All fine BUT...

They tried to link the GAR with the non-GAR fund - cash both or take both as a combined annuity. I contested this offer. I wanted the GAR annuity but cash the other. I asked for the T&Cs for each fund and any evidence that they were linked. They only provided the T&Cs. I read them and neither fund mentioned the other. In the end they conceded and I got the GAR annuity and cashed the other. Obviously Prudential were trying to ameliorate the cost of the GAR by combining it with the variable annuity.

Roll forward four years to my brothers NRD. Prudential refused to unlink the funds despite the evidence of my case. They then threatened that he would lose the GAR if he didn't accept. He accepted under protest and raised a complaint with the Pension Ombudsman. The PO found entirely in his favour and promised to put him back to the position he wanted BUT the PO only started looking at whether he had been offered the best annuity rate (Prudential have been fined by the FSA for not doing this) The PO did not instruct Prudential to give him the variable annuity as cash. He is currently contesting that descision.

I strongly believe the Prudential is acting improperly in linking these two funds. Probably they are doing this to all the members affected, saving the Prudential the full cost of the GAR. This should be investigated by the FSA who regulate the Prudential, not the Pensions Ombudsman. 

So be aware when you reach your NRD with these funds - you will have the same problems. I can provide the fund names to anybody that wants them and the T&Cs (microfiche copies)

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