Aegon pension fund - fee overcharge since June 2020

dermotological

For attention of anyone with an Aegon pension plan

I have today received notice from Aegon that, from June 2020, Aegon took more than the 1% charge my plan was meant to be billed at every year. I do not know if this is a problem specific to my account, or everyone with the same plan. (I don't recall doing anything around that time that might have affected my account.)

Since I had already converted my plan into an annuity last year, they have offered a lump sum correction - refund of overcharge + interest. Effectively, it is treated as a full pension withdrawal - 25% tax free, minus tax on the remaining 75%. I will lose out to the tune of about £3 per month once 15 years of annuity has been paid out, thanks to their mistake. I can swallow that, but others may not be willing and/or able to do so.

Is there any legislation that means Aegon should face sanction, or make good any shortfall, for this sort of mistake?

Albermarle

It sounds like they have voluntarily admitted their mistake, without prompting, then issued an apology and a refund.

Not sure there is much scope for punishing them further in any current legislation.

Have you asked for further redress, due to your specific situation? You might be able to squeeze a bit more out of them.

dermotological

https://forums.moneysavingexpert.com/discussion/comment/81868421#Comment_81868421

I'm probably not going to press it - I've got more to worry about than £3/month in 15 years' time.

But for others, that may not be the case, so "heads up, everyone".

If there is meant to be legislative redress or consequences for Aegon, that's different.

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81868493#Comment_81868493

Where mistakes are concerned, members should, as far as possible, be 'put in the position they would have been in had the mistake not occurred'. It isn't always possible to put someone back where they would otherwise have been, but provided the offer is reasonable (and yours looks it, from what you've said), it's unlikely the Pensions Ombudsman would overturn/upgrade it.

If appropriate (which doesn't mean 'always') a compensation payment for distress/disappointment/inconvenience may also be paid. Give you weren't aware of the issue, you can't claim to be distressed etc - an overnight fit of the vapours when you were told about it doesn't count… You seem to have a pretty sensible take on matters, so the point is made more for the benefit of other readers of this thread who may think 'compo' is always due on even the flimsiest pretext.

dunstonh

For attention of anyone with an Aegon pension plan

Which Aegon? They have multiple distribution channels with each using its own product on its own software.

Is there any legislation that means Aegon should face sanction, or make good any shortfall, for this sort of mistake?

Lets hope you have never made a mistake.

They are putting right a mistake voluntarily and correctly. They are doing what is required of them.

dermotological

https://forums.moneysavingexpert.com/discussion/comment/81868579#Comment_81868579

"Which Aegon?" The letterhead just says Aegon. The account in question was a vanilla personal pension that had been cashed out. (I don't know if or how current active policies are being corrected).

The issue for me is not simply that they made a mistake, but that mistakes really shouldn't be introduced on a run-of-the-mill, unmodified, policy and then go unnoticed for over 5 years such that they linger and cause further consequences. For example, I recently made a CGT declaration where I declared my expected income for this year, on which HMRC based a calculation. Now I'm getting an unexpected taxable lump sum coming in so I'm going to have to revise that declaration and have HMRC recalculate things. It's a faff and a hassle and I don't see why, if rules say I'm eligible for redress, that I shouldn't get any.

The Financial Services industry is tightly regulated, and there are many rules and regulations that carry very severe penalties if they are not adhered to regardless of whether it's a mistake or malice.

I've highlighted this as a "heads up" for people with Aegon pension policies to be aware of it.

dunstonh

The issue for me is not simply that they made a mistake, but that mistakes really shouldn't be introduced on a run-of-the-mill, unmodified, policy and then go unnoticed for over 5 years such that they linger and cause further consequences. 

Mistakes go undetected until they are detected. There are no rules in respect of when a mistake should be identified. Some will go undetected forever. Others spotted quickly.

If its widepread, the FCA would be notified. If its limited then it will be logged but the FCA are not notified. Aegon have FCA staff virtually living in their offices and redress amounts, like the one you received, are logged and the FCA will be looking to see if there are trends or not.

Now I'm getting an unexpected taxable lump sum coming in so I'm going to have to revise that declaration and have HMRC recalculate things. It's a faff and a hassle and I don't see why, if rules say I'm eligible for redress, that I shouldn't get any.

The rules do not say you are eligible for redress. The expectation is that you are not out of pocket.

Your refund will be the charges plus interest (or an adjustment in the value reflecting the amount had it not been charged plus interest). If you place that into savings or investments, you get a return on it. If you spend it, you have obtained value.

You didn't know about the mistake. So, there was no distress and inconvenience. If you are out of pocket, you can make a case to them as to how much and why.

I've highlighted this as a "heads up" for people with Aegon pension policies to be aware of it.

Hence why I asked which Aegon it was. No point having a heads up if the issue is ex Scot Eq when the person is with Cofunds, ARC, RR or ex Blackrock. 1% charge sound like Scot Eq as the others have a different charging level but 1% was the old 2001 default charge for stakeholder or stakeholder friendly plans and most of their internal funds were 1% until post 2013.

dermotological

Hence why I asked which Aegon it was. No point having a heads up if the issue is ex Scot Eq when the person is with Cofunds, ARC, RR or ex Blackrock. 1% charge sound like Scot Eq as the others have a different charging level but 1% was the old 2001 default charge for stakeholder or stakeholder friendly plans and most of their internal funds were 1% until post 2013.

Ah - I was unaware of the subtleties of this. That said, Aegon acquired 100% of Scot Eq in 1998, so I really hope they've worked out the quirks in their handling of Scot Eq by now!

Yes, it was originally a Scot Eq policy, if that helps anyone else.

dunstonh

Ah - I was unaware of the subtleties of this. That said, Aegon acquired 100% of Scot Eq in 1998, so I really hope they've worked out the quirks in their handling of Scot Eq by now!

You would hope but….. They were reporting many issues over the last 20 years on the Scot Eq side.

They moved the majority of their legacy pensions to a new system in 2024. When that happens, historical issues are often found. Plus, the move can also create new issues.