Pension quotation question
Discussion
A question, final salary pension; administered on behalf of say company A, by company B.
3 recent request to Company B for quotes on the value made during 2019, all made by phone, no verbal quotes would be given, so all quotes supplied by company B by post.
All quotes for the same value.
Send back forms to start pension payments; only to find the true value is £800 or 3.5% less than the quoted values.
Formal complaint registered to to Company A trustees as required by the complaint procedure, however they have upheld the original quote; as in their words two pointers. Namely:
Company B cannot be held responsible for any miss quotes....
The value of the pension cannot exceed the nominal pension value.
My issue; aside from a paltry off of a one off £500 compensation offer is. If the quotes are not a true reflection, how am I to know where I truly stand.
I feel I have been missold the pension value, and moreover decided to retire based on that value.
What do you consider my options are apart from continuing the complaint to the trustees, then raising with the regulators, and secondly, what would you consider my chances of a favourable outcome to myself as in, the original quotes being upheld
Thanks
3 recent request to Company B for quotes on the value made during 2019, all made by phone, no verbal quotes would be given, so all quotes supplied by company B by post.
All quotes for the same value.
Send back forms to start pension payments; only to find the true value is £800 or 3.5% less than the quoted values.
Formal complaint registered to to Company A trustees as required by the complaint procedure, however they have upheld the original quote; as in their words two pointers. Namely:
Company B cannot be held responsible for any miss quotes....
The value of the pension cannot exceed the nominal pension value.
My issue; aside from a paltry off of a one off £500 compensation offer is. If the quotes are not a true reflection, how am I to know where I truly stand.
I feel I have been missold the pension value, and moreover decided to retire based on that value.
What do you consider my options are apart from continuing the complaint to the trustees, then raising with the regulators, and secondly, what would you consider my chances of a favourable outcome to myself as in, the original quotes being upheld
Thanks
darreni said:
Please add some detail re the figures.
I work with DB pensions everyday & I don’t understand what your issue is.
My issue is.I work with DB pensions everyday & I don’t understand what your issue is.
I asked for a quote, so I could determine if I should take the pension.
If I am told you will receive a number for that pension, not once, not twice but three times, and that number that I eventually receive is £800 less per annum than the quote made, I would suggest something is incorrect.
Normally a quote before retirement is only an estimate anyway, it can alter depending on a number of circumstances. Have they given a reason for the difference in figures? As you have stated that it is a final salary pension then I would guess at an early retirement penalty being applied, have you taken benefits about a year before normal retirement age? That would explain a drop of about 4%.
There are very formal rules for investigating a complaint, these will be followed by the company. If you are not satisfied with the outcome of their investigation then you can refer your complaint to the ombudsman and they will investigate.
Just as a side note if £800 per annum is the difference between you retiring and not retiring you are cutting things quite fine.
There are very formal rules for investigating a complaint, these will be followed by the company. If you are not satisfied with the outcome of their investigation then you can refer your complaint to the ombudsman and they will investigate.
Just as a side note if £800 per annum is the difference between you retiring and not retiring you are cutting things quite fine.
Why did you ask for an illustration three times? Are they all for the same retirement date?
What is the retirement date and when where the quotations issued?
You can escalate your complaint to the Pensions Ombudsman if you remain unsatisfied with the resolution offered by the trustees.
What is the retirement date and when where the quotations issued?
You can escalate your complaint to the Pensions Ombudsman if you remain unsatisfied with the resolution offered by the trustees.
Thanks all, in response
It’s early retirement, there’s a 3% per annum reduction, I was taking this 3 years early; and all the deductions are factored in.
Why 3 quotes, because the fund used to send them out each year, but stopped doing so, when I questioned this, well l its a change we are doing; you’ll have to ask now, was the answer. So I used to ask each January. This year as I was unhappy at work, and due to some very personal family circumstances and a changing landscape I decided to ask in June, then again in July as circumstances changed a little more, the third time was: send me the paperwork; I’m signing it. The figures remained identical throughout.
The previous year, they were £2k higher, apparently another mistake in their calculations.
Why the errors, again apparently a miscalculation on their admitted part.
Mods can we move to financial forum please
Thanks
It’s early retirement, there’s a 3% per annum reduction, I was taking this 3 years early; and all the deductions are factored in.
Why 3 quotes, because the fund used to send them out each year, but stopped doing so, when I questioned this, well l its a change we are doing; you’ll have to ask now, was the answer. So I used to ask each January. This year as I was unhappy at work, and due to some very personal family circumstances and a changing landscape I decided to ask in June, then again in July as circumstances changed a little more, the third time was: send me the paperwork; I’m signing it. The figures remained identical throughout.
The previous year, they were £2k higher, apparently another mistake in their calculations.
Why the errors, again apparently a miscalculation on their admitted part.
Mods can we move to financial forum please
Thanks
If you are requesting an early retirement illustration several years in advance of the potential early retirement date, the administrator will have to make an assumption of future inflation. As the years go by the actual inflation replaces the assumed inflation, so the illustrations year on year will very likely change.
Again, if you originally requested ER for June 2019, then July 2019, then now, the illustrations should vary because the early retirement factor will be different each time.
Were you provided with an explanation of how the error occurred?
As a principle, errors do occasionally occur. Trustees have a duty to correct them. You would need to be able to demonstrate that your decision to access the benefit was based on the illustration received, and had the correct illustration been given you would not have accessed the benefits.
Again, if you originally requested ER for June 2019, then July 2019, then now, the illustrations should vary because the early retirement factor will be different each time.
Were you provided with an explanation of how the error occurred?
As a principle, errors do occasionally occur. Trustees have a duty to correct them. You would need to be able to demonstrate that your decision to access the benefit was based on the illustration received, and had the correct illustration been given you would not have accessed the benefits.
Having not seen the documents I may be wrong, but it sounds to me that you requested a standard quotation (which would be at normal retirement age) and then retired 3 years early, resulting in the reduction of benefits.
Had you requested 3 different early retirement illustrations on the different date 7 months apart then you could have expected to see a different figure on each quote. The would only have been identical numbers if they were for an identical date.
As I said though, without seeing the documents it is impossible to say.
Had you requested 3 different early retirement illustrations on the different date 7 months apart then you could have expected to see a different figure on each quote. The would only have been identical numbers if they were for an identical date.
As I said though, without seeing the documents it is impossible to say.
JulianPH said:
Having not seen the documents I may be wrong, but it sounds to me that you requested a standard quotation (which would be at normal retirement age) and then retired 3 years early, resulting in the reduction of benefits.
Had you requested 3 different early retirement illustrations on the different date 7 months apart then you could have expected to see a different figure on each quote. The would only have been identical numbers if they were for an identical date.
As I said though, without seeing the documents it is impossible to say.
Agreed, but the final illustration was for me to excersie my right to take the offer, if thats the correct terminology. (On the basis that the entire paperwork to collect and not pass go was correct), I duly signed said paperwork, and then expected the sum quoted to be the sum delivered, It wasnt; and the rationale from the trustees is, a mistake in the calculations was made, and they cannot be bound by that mistake, quoting a section of the terms and conditions.Had you requested 3 different early retirement illustrations on the different date 7 months apart then you could have expected to see a different figure on each quote. The would only have been identical numbers if they were for an identical date.
As I said though, without seeing the documents it is impossible to say.
Initially I wanted to know if this was legal, as in: can you provide a document quoting the benefits to be received, yet change that benefit before delivery, and before the recipient has an opportunity to decline the offer, due to the changes imposed. i.e. a reduction of over £800/annum on the amount quoted.
Thanks
C2Red said:
JulianPH said:
Having not seen the documents I may be wrong, but it sounds to me that you requested a standard quotation (which would be at normal retirement age) and then retired 3 years early, resulting in the reduction of benefits.
Had you requested 3 different early retirement illustrations on the different date 7 months apart then you could have expected to see a different figure on each quote. The would only have been identical numbers if they were for an identical date.
As I said though, without seeing the documents it is impossible to say.
Agreed, but the final illustration was for me to excersie my right to take the offer, if thats the correct terminology. (On the basis that the entire paperwork to collect and not pass go was correct), I duly signed said paperwork, and then expected the sum quoted to be the sum delivered, It wasnt; and the rationale from the trustees is, a mistake in the calculations was made, and they cannot be bound by that mistake, quoting a section of the terms and conditions.Had you requested 3 different early retirement illustrations on the different date 7 months apart then you could have expected to see a different figure on each quote. The would only have been identical numbers if they were for an identical date.
As I said though, without seeing the documents it is impossible to say.
Initially I wanted to know if this was legal, as in: can you provide a document quoting the benefits to be received, yet change that benefit before delivery, and before the recipient has an opportunity to decline the offer, due to the changes imposed. i.e. a reduction of over £800/annum on the amount quoted.
Thanks
If it was a "statement" (which will give you a value at normal retirement age and a value if you your were to take the benefits within a month) and you did indeed take the benefits within a month, the the same as the above.
If it was an "illustration" then they could argue this was indicative and not guaranteed, but it is certainly worth appealing. If the Ombudsman considers that you relied upon this information when deciding to take the benefits early then expect the same as above.
So the wording on the document is very important...
JulianPH said:
If your final document was a "quote" for taking your pension benefits early and you opted to take those benefits based upon this I would suggest that they are, to use the technical phrase, buggered!
If it was a "statement" (which will give you a value at normal retirement age and a value if you your were to take the benefits within a month) and you did indeed take the benefits within a month, the the same as the above.
If it was an "illustration" then they could argue this was indicative and not guaranteed, but it is certainly worth appealing. If the Ombudsman considers that you relied upon this information when deciding to take the benefits early then expect the same as above.
So the wording on the document is very important...
Thanks Julian.If it was a "statement" (which will give you a value at normal retirement age and a value if you your were to take the benefits within a month) and you did indeed take the benefits within a month, the the same as the above.
If it was an "illustration" then they could argue this was indicative and not guaranteed, but it is certainly worth appealing. If the Ombudsman considers that you relied upon this information when deciding to take the benefits early then expect the same as above.
So the wording on the document is very important...
I'm going to appeal... They the Trustees have offered £500 by way of a one off measure of compensation; saying this is all the Ombudsman would offer anyway.
At this point I consider I have nothing (except £500) to lose by continuing my complaint, then using the Ombudsman.
Thanks
C2Red said:
JulianPH said:
If your final document was a "quote" for taking your pension benefits early and you opted to take those benefits based upon this I would suggest that they are, to use the technical phrase, buggered!
If it was a "statement" (which will give you a value at normal retirement age and a value if you your were to take the benefits within a month) and you did indeed take the benefits within a month, the the same as the above.
If it was an "illustration" then they could argue this was indicative and not guaranteed, but it is certainly worth appealing. If the Ombudsman considers that you relied upon this information when deciding to take the benefits early then expect the same as above.
So the wording on the document is very important...
Thanks Julian.If it was a "statement" (which will give you a value at normal retirement age and a value if you your were to take the benefits within a month) and you did indeed take the benefits within a month, the the same as the above.
If it was an "illustration" then they could argue this was indicative and not guaranteed, but it is certainly worth appealing. If the Ombudsman considers that you relied upon this information when deciding to take the benefits early then expect the same as above.
So the wording on the document is very important...
I'm going to appeal... They the Trustees have offered £500 by way of a one off measure of compensation; saying this is all the Ombudsman would offer anyway.
At this point I consider I have nothing (except £500) to lose by continuing my complaint, then using the Ombudsman.
Thanks
Best of luck!
OP,
You say that there's Company A that seems to be the employer and the sponsor of the pension plan. There's Company B that seems to be the firm appointed for administration responsibility for the pension plan. You have made no mention of the trustees of the pension plan, which is rather odd. The trustees are responsible for the administration of the pension plan and if an error has been made then it is their responsibility to accept that the error has been made and then get it corrected. The fact that they have appointed company B for administration responsibility does not mean that the trustees are no longer liable. So, in my opinion you should have made your complaint with the trustees, not company A or B.
The matter raised by others about a quote versus an estimate is not relevant. What is relevant is the wording of the quote/estimate. I would guess that it says something like * this is for information only and final benefits will be established and come into payment once you have decided on actions and complied with our requirements."
Did you decide to take up the offer, retire and then after payments began it became clear that an error had been made, or was this discovered before you made your decision? If the latter and you still decided to go ahead then you have a weaker position regarding your complaint.
You seem to imply that you would not have decided to retire had you known the correct amount. Given a difference of £16 per week, this will not likely give any justification for upholding a complaint that you made a wrong decision and you wish to reverse it.
Notwithstanding an error has clearly been made, you have no entitlement to the benefit of the error: you are only entitled to what the pension plan's specific provisions state. As there's been an error, it must be corrected and you may well seek compensation which, if agreed, will be paid outside of the pension plan by the offending party (could be the trustees, and they then might seek recovery from Company B)
I see that you have raised a complaint which is good. And it seems to be with company B which is a good place to start.
It is also clear that you are not satisfied so far with the outcome of your complaint so you can do two things. First, all company sponsored pension schemes must have what is called an Internal Disputes Resolution Procedure (IDRP), usually in 2 stages, and you can use this to elevate your complaint to a formal basis. You can ask Company B for a copy of the IDRP and then you can do what is required to start the process. Second, you can contact the office of the Pensions Ombudsman seeking their assistance with the problem. Note that the PO will not start investigations until you have raised a complaint, and the party you have raised it with has had the opportunity of responding, all of which seems to have occurred with your complaint so far, so you can go to the PO now if you wish.
If I was you, I would bring your complaint to the attention of the office of the PO now. All you need is here: https://www.pensions-ombudsman.org.uk/
Maybe start by completing the form and e mailing it to them. They will assign your case to one of their staff who will start making investigations. I suspect that they will recommend that you start the IDRP and they can help you with this. Do not expect this process to be swift.
And as for "compensation", the PO calls this "redress for non financial injustice" and publishes a scale depending on the degree of error, how many times it's repeated, etc. It is a guideline only. From the very limited information contained in your post, I think any amount decided will be at the lower end and an offer of £500 made already looks OK., considering that the error is £800pa and has not been paid over a long period; had it been done so the capital value of the error would be much higher and so compensation possibly higher too.
R.
You say that there's Company A that seems to be the employer and the sponsor of the pension plan. There's Company B that seems to be the firm appointed for administration responsibility for the pension plan. You have made no mention of the trustees of the pension plan, which is rather odd. The trustees are responsible for the administration of the pension plan and if an error has been made then it is their responsibility to accept that the error has been made and then get it corrected. The fact that they have appointed company B for administration responsibility does not mean that the trustees are no longer liable. So, in my opinion you should have made your complaint with the trustees, not company A or B.
The matter raised by others about a quote versus an estimate is not relevant. What is relevant is the wording of the quote/estimate. I would guess that it says something like * this is for information only and final benefits will be established and come into payment once you have decided on actions and complied with our requirements."
Did you decide to take up the offer, retire and then after payments began it became clear that an error had been made, or was this discovered before you made your decision? If the latter and you still decided to go ahead then you have a weaker position regarding your complaint.
You seem to imply that you would not have decided to retire had you known the correct amount. Given a difference of £16 per week, this will not likely give any justification for upholding a complaint that you made a wrong decision and you wish to reverse it.
Notwithstanding an error has clearly been made, you have no entitlement to the benefit of the error: you are only entitled to what the pension plan's specific provisions state. As there's been an error, it must be corrected and you may well seek compensation which, if agreed, will be paid outside of the pension plan by the offending party (could be the trustees, and they then might seek recovery from Company B)
I see that you have raised a complaint which is good. And it seems to be with company B which is a good place to start.
It is also clear that you are not satisfied so far with the outcome of your complaint so you can do two things. First, all company sponsored pension schemes must have what is called an Internal Disputes Resolution Procedure (IDRP), usually in 2 stages, and you can use this to elevate your complaint to a formal basis. You can ask Company B for a copy of the IDRP and then you can do what is required to start the process. Second, you can contact the office of the Pensions Ombudsman seeking their assistance with the problem. Note that the PO will not start investigations until you have raised a complaint, and the party you have raised it with has had the opportunity of responding, all of which seems to have occurred with your complaint so far, so you can go to the PO now if you wish.
If I was you, I would bring your complaint to the attention of the office of the PO now. All you need is here: https://www.pensions-ombudsman.org.uk/
Maybe start by completing the form and e mailing it to them. They will assign your case to one of their staff who will start making investigations. I suspect that they will recommend that you start the IDRP and they can help you with this. Do not expect this process to be swift.
And as for "compensation", the PO calls this "redress for non financial injustice" and publishes a scale depending on the degree of error, how many times it's repeated, etc. It is a guideline only. From the very limited information contained in your post, I think any amount decided will be at the lower end and an offer of £500 made already looks OK., considering that the error is £800pa and has not been paid over a long period; had it been done so the capital value of the error would be much higher and so compensation possibly higher too.
R.
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