pensions - CETV error on divorce
Discussion
Hi all.
Got a bit of a pickle. just been through a messy and expensive divorce, all done, agreed and pension transfers are taking place to the ex. However, there has been an issue.
The figures we worked to in the settlement agreement contained a pension, stated on the CETV from the pension company to be a figure. Upon transfer to the ex, the figure was less than an eighth of the value, dramatically impacting the split.
It turns out that they made an error when quoting the CETV value upon which the settlement negotiation was based, over stating it massively. I don’t know what my ex is gonna do, but my gut feel is that she will look for recompense.
My question is, apart from saying sorry, should the greedy ex seek to find the difference from me, does the pension company carry any responsibility for the impact of their error, which could be quite severe - to the extent of 10s of thousands of pounds?
TIA.
Got a bit of a pickle. just been through a messy and expensive divorce, all done, agreed and pension transfers are taking place to the ex. However, there has been an issue.
The figures we worked to in the settlement agreement contained a pension, stated on the CETV from the pension company to be a figure. Upon transfer to the ex, the figure was less than an eighth of the value, dramatically impacting the split.
It turns out that they made an error when quoting the CETV value upon which the settlement negotiation was based, over stating it massively. I don’t know what my ex is gonna do, but my gut feel is that she will look for recompense.
My question is, apart from saying sorry, should the greedy ex seek to find the difference from me, does the pension company carry any responsibility for the impact of their error, which could be quite severe - to the extent of 10s of thousands of pounds?
TIA.
That looks to be an astounding error!
Note that in law there is no entitlement to the benefit of an error, so you may be looking for a form of compensation payment perhaps depending on the full circumstances.
Who provided the CETV ie who is "the pension company"? Is it the trustees, the administrators of the relevant pension scheme, or the insurance company?
If I was in your shoes, I'd get in touch promptly with the office of the Pensions Ombudsman's Early Resolution Team and ask for their advice. See here:
https://www.pensions-ombudsman.org.uk/contact-us/
Should you and/or your wife wish to raise a complaint against "the pension company" then the PO's ERT will be able to assist you through the process and seek resolution of your complaint. Note however that you must have raised a complaint with "the pension company" before the PO's ERT can take any formal action; for now they can only give you informal guidance.
The PO's services are entirely free.
R.
Note that in law there is no entitlement to the benefit of an error, so you may be looking for a form of compensation payment perhaps depending on the full circumstances.
Who provided the CETV ie who is "the pension company"? Is it the trustees, the administrators of the relevant pension scheme, or the insurance company?
If I was in your shoes, I'd get in touch promptly with the office of the Pensions Ombudsman's Early Resolution Team and ask for their advice. See here:
https://www.pensions-ombudsman.org.uk/contact-us/
Should you and/or your wife wish to raise a complaint against "the pension company" then the PO's ERT will be able to assist you through the process and seek resolution of your complaint. Note however that you must have raised a complaint with "the pension company" before the PO's ERT can take any formal action; for now they can only give you informal guidance.
The PO's services are entirely free.
R.
That looks to be an astounding error!
Note that in law there is no entitlement to the benefit of an error, so you may be looking for a form of compensation payment perhaps depending on the full circumstances.
Who provided the CETV ie who is "the pension company"? Is it the trustees, the administrators of the relevant pension scheme, or the insurance company?
If I was in your shoes, I'd get in touch promptly with the office of the Pensions Ombudsman's Early Resolution Team and ask for their advice. See here:
https://www.pensions-ombudsman.org.uk/contact-us/
Should you and/or your wife wish to raise a complaint against "the pension company" then the PO's ERT will be able to assist you through the process and seek resolution of your complaint. Note however that you must have raised a complaint with "the pension company" before the PO's ERT can take any formal action; for now they can only give you informal guidance.
The PO's services are entirely free.
R.
Note that in law there is no entitlement to the benefit of an error, so you may be looking for a form of compensation payment perhaps depending on the full circumstances.
Who provided the CETV ie who is "the pension company"? Is it the trustees, the administrators of the relevant pension scheme, or the insurance company?
If I was in your shoes, I'd get in touch promptly with the office of the Pensions Ombudsman's Early Resolution Team and ask for their advice. See here:
https://www.pensions-ombudsman.org.uk/contact-us/
Should you and/or your wife wish to raise a complaint against "the pension company" then the PO's ERT will be able to assist you through the process and seek resolution of your complaint. Note however that you must have raised a complaint with "the pension company" before the PO's ERT can take any formal action; for now they can only give you informal guidance.
The PO's services are entirely free.
R.
Thanks for the response. I don’t really understand these things, so will try to explain in my own terms.
Essentially, the pension was a company pension from an ex-employer. All my communication was with xxxxxxxx, who I stated to be the pension company in my original post. The CETV provided was on Xxxxxxx’s headed paper.
I enquired about the disparate figures. They have investigated, admitted their error on the CETV and apologised. Now my ex is looking for recompense, initially from them, but no doubt if that fails she will eventually end up at my door!
Does that help explain the parties? I am not going for company xxxxxx, but my ex will. From what I read, it was my responsibility to request the CETV, and her responsibility to verify the CETV via an actuary upon production - typically only in complicated or high value cases. But she was not advised to do this by any professional in the loop, and therefore did not do it.
I am not sure what grounds (if any) she has to seek compensation from Xxxxxxx at this stage. I believe from what I read that she should have confirmed the CETV via an actuary at the time of production. She says she has independent advice saying she can go for xxxxxxx... at the moment...
Edited to remove the actual company name and replace with xxxxxxx’s
Essentially, the pension was a company pension from an ex-employer. All my communication was with xxxxxxxx, who I stated to be the pension company in my original post. The CETV provided was on Xxxxxxx’s headed paper.
I enquired about the disparate figures. They have investigated, admitted their error on the CETV and apologised. Now my ex is looking for recompense, initially from them, but no doubt if that fails she will eventually end up at my door!
Does that help explain the parties? I am not going for company xxxxxx, but my ex will. From what I read, it was my responsibility to request the CETV, and her responsibility to verify the CETV via an actuary upon production - typically only in complicated or high value cases. But she was not advised to do this by any professional in the loop, and therefore did not do it.
I am not sure what grounds (if any) she has to seek compensation from Xxxxxxx at this stage. I believe from what I read that she should have confirmed the CETV via an actuary at the time of production. She says she has independent advice saying she can go for xxxxxxx... at the moment...
Edited to remove the actual company name and replace with xxxxxxx’s
Edited by SeeFive on Monday 20th August 15:42
May be worth cross posting this into Speed, plod and the Law?
A legal type may be able to shed more light. As its less finance and more legal from where I sit.
My view, for what it's worth, is that if there was an error in dividing up the spoils then that would need to be put right. The error from Xxxx being exactly that, an error, so they should put it right in terms of mechanics, and some payment for inconvenience/costs etc but can hardly be expected to foot the bill for your divorce.
A legal type may be able to shed more light. As its less finance and more legal from where I sit.
My view, for what it's worth, is that if there was an error in dividing up the spoils then that would need to be put right. The error from Xxxx being exactly that, an error, so they should put it right in terms of mechanics, and some payment for inconvenience/costs etc but can hardly be expected to foot the bill for your divorce.
Edited by ellroy on Monday 20th August 20:00
PurpleMoonlight said:
Was the pension divided equally between you both?
If so, you have both suffered equally by the error so I can't see how she can claim anything further from you.
No. I have a number of pensions making a total pot. I assigned this one to her 100%. Some individual pots cannot be transferred legally. The court order does not mention values, just percentages which probably means that the whole pension sharing agreement would need to be revisited, which would mean that due to circumstances, there is no further pension for her to claim off me, so we would be talking about other potential resolutions...If so, you have both suffered equally by the error so I can't see how she can claim anything further from you.
I spoke to the ombudsman as per Roger’s advice, and he has suggested an approach. He asked some specific questions and we are following this advice. I guess it is not really a good idea to get into that detail on a public forum but he clearly sees a problem.
ellroy said:
May be worth cross posting this into Speed, plod and the Law?
A legal type may be able to shed more light. As its less finance and more legal from where I sit.
My view, for what it's worth, is that if there was an error in dividing up the spoils then that would need to be put right. The error from Xxxxxxx being exactly that, an error, so they should put it right in terms of mechanics, and some payment for inconvenience/costs etc but can hardly be expected to foot the bill for your divorce.
Thanks for that response, my thoughts too. The reason I posted in here is that I am trying to understand the issue from the financial perspective first in the pension company error. I will appoint a solicitor should it go legal later. A legal type may be able to shed more light. As its less finance and more legal from where I sit.
My view, for what it's worth, is that if there was an error in dividing up the spoils then that would need to be put right. The error from Xxxxxxx being exactly that, an error, so they should put it right in terms of mechanics, and some payment for inconvenience/costs etc but can hardly be expected to foot the bill for your divorce.
I would not expect the company to foot the bill for my divorce, there was a lot more to it than just their bit. However, expensive negotiations have taken place, courts have judged on expectations provided by pension companies as part of that, those expectations were set in error and the consequences are now being felt by everyone except those that made the error.
Please could you edit out the company name in your previous post. I think we may contravene name and shame rules. Thanks.
As OP assigned the pension in question 100% to his now ex wife, it seems that she is best placed to raise a formal complaint, if necessary, with xxxxxx.
Perhaps the ex wife may want to renegotiate the split of the total of OP's pensions now she knows one of them has been severely incorrectly stated.
I suggest avoiding getting legal advice for the time being. It may be necessary to do so later. It may also be unavoidable if ex wife wants to pursue this as seems likely. Meanwhile, if you can use the Pensions Ombudsman, as I think is highly likely, the service is free. Note that if at a later stage the PO is asked by OP and/ or ex wife to adjudicate in a dispute over this and either/both parties have incurred legal fees, the PO will not include such fees in his adjudication.
The PO has people experienced with pensions and divorce matters and they are aware of the legal matters.
R.
Perhaps the ex wife may want to renegotiate the split of the total of OP's pensions now she knows one of them has been severely incorrectly stated.
I suggest avoiding getting legal advice for the time being. It may be necessary to do so later. It may also be unavoidable if ex wife wants to pursue this as seems likely. Meanwhile, if you can use the Pensions Ombudsman, as I think is highly likely, the service is free. Note that if at a later stage the PO is asked by OP and/ or ex wife to adjudicate in a dispute over this and either/both parties have incurred legal fees, the PO will not include such fees in his adjudication.
The PO has people experienced with pensions and divorce matters and they are aware of the legal matters.
R.
Just to be clear, I'm not blaming you or your ex for the mistake, but I am surprised that no one involved (i.e. the professionals) picked up the error. It would be pretty obvious to anyone even remotely involved with pensions to spot an error of that magnitude - it would have indicated a huge multiplier of annual pension to value.
The Leaper said:
As OP assigned the pension in question 100% to his now ex wife, it seems that she is best placed to raise a formal complaint, if necessary, with xxxxxx.
Perhaps the ex wife may want to renegotiate the split of the total of OP's pensions now she knows one of them has been severely incorrectly stated.
I suggest avoiding getting legal advice for the time being. It may be necessary to do so later. It may also be unavoidable if ex wife wants to pursue this as seems likely. Meanwhile, if you can use the Pensions Ombudsman, as I think is highly likely, the service is free. Note that if at a later stage the PO is asked by OP and/ or ex wife to adjudicate in a dispute over this and either/both parties have incurred legal fees, the PO will not include such fees in his adjudication.
The PO has people experienced with pensions and divorce matters and they are aware of the legal matters.
R.
Thanks Roger.Perhaps the ex wife may want to renegotiate the split of the total of OP's pensions now she knows one of them has been severely incorrectly stated.
I suggest avoiding getting legal advice for the time being. It may be necessary to do so later. It may also be unavoidable if ex wife wants to pursue this as seems likely. Meanwhile, if you can use the Pensions Ombudsman, as I think is highly likely, the service is free. Note that if at a later stage the PO is asked by OP and/ or ex wife to adjudicate in a dispute over this and either/both parties have incurred legal fees, the PO will not include such fees in his adjudication.
The PO has people experienced with pensions and divorce matters and they are aware of the legal matters.
R.
You steered me in the right direction it seems. The actual process recommended by the ombudsman was to make a joint complaint, which I have just done.
Even though the “mini transfer” has taken place, they would not talk to her when she called them. Perhaps this joint complaint will open that up.
Of course, the PO can only advise and deal with pension issues and not the divorce stuff so I will nervously await that hurdle in the future - she has been a cow throughout
Zigster said:
Just to be clear, I'm not blaming you or your ex for the mistake, but I am surprised that no one involved (i.e. the professionals) picked up the error. It would be pretty obvious to anyone even remotely involved with pensions to spot an error of that magnitude - it would have indicated a huge multiplier of annual pension to value.
Heh heh... indeed. Pensions... I just pay in every month to a couple of personal ones and don’t really pay any attention to the company ones. So I had no idea of what 7 years service would bring on minimum contributions from a fairly significant wage at the time. I still have no idea really about what pensions I have, let alone what they are worth!There wasn’t any professionals involved except lawyers from my perspective. I guess she would have been talking to a FA to decide what to do with her pension windfall, but I really don’t know. It was fairly acrimonious throughout so I just concerned myself with stuff I had to do.
The PO can adjudicate on pensions matters in circumstances of divorce, and often does so. What the PO cannot do of course in to make any comments on non pensions related divorce matters.
I see that you have raised a joint complaint with xxxxxx. If the outcome is not satisfactory, you can ask the PO to formally investigate the complaint and seek a different resolution, and the best way to start this is to complete the PO's relevant form online at the website once you know the outcome from xxxxx.
R.
I see that you have raised a joint complaint with xxxxxx. If the outcome is not satisfactory, you can ask the PO to formally investigate the complaint and seek a different resolution, and the best way to start this is to complete the PO's relevant form online at the website once you know the outcome from xxxxx.
R.
The Leaper said:
The PO can adjudicate on pensions matters in circumstances of divorce, and often does so. What the PO cannot do of course in to make any comments on non pensions related divorce matters.
I see that you have raised a joint complaint with xxxxxx. If the outcome is not satisfactory, you can ask the PO to formally investigate the complaint and seek a different resolution, and the best way to start this is to complete the PO's relevant form online at the website once you know the outcome from xxxxx.
R.
Did you work for them before you retired? You are pretty much word for word what they suggested.I see that you have raised a joint complaint with xxxxxx. If the outcome is not satisfactory, you can ask the PO to formally investigate the complaint and seek a different resolution, and the best way to start this is to complete the PO's relevant form online at the website once you know the outcome from xxxxx.
R.
Many thanks once again.
As a more general comment for the benefit of others, PAY. FOR. AN. ACTUARY’S. REPORT. I cannot emphasise that enough.
Carving up a notional pot based on the number in a transfer value report from the scheme administrator alone, is potentially insane. All schemes are different, they all have their own nuance and different rules.
A tasking instruction to an actuary might be two pages, and lots of egg and ham solicitors hate it when a switched on IFA starts muddying the waters of their production line process. But I cannot emphasise enough, just how important it is.
Carving up a notional pot based on the number in a transfer value report from the scheme administrator alone, is potentially insane. All schemes are different, they all have their own nuance and different rules.
A tasking instruction to an actuary might be two pages, and lots of egg and ham solicitors hate it when a switched on IFA starts muddying the waters of their production line process. But I cannot emphasise enough, just how important it is.
The company has started the complaint process promptly. I have received 2 communications from them with reasonable deadlines for response and targeted resolution. The big question is, what the resolution is likely to be.
Thanks for all the input guys, I guess in addition to helping me, there will be something for others in here via the PH search engine.
As a pointer from me, the Pension Ombudsman website has a case history, with thousands of examples of complaints upheld or otherwise on it. The search engine isn’t great, but talking to the guys there they can provide hints - for example in my case, his suggested terms to use were “misinformation and divorce”, miles away from my title on this thread which seemed to be a little more precise to the layman... but isn’t. Once you get familiar reading the terminology used in the cases, then search text refinement can take place.
Thanks for all the input guys, I guess in addition to helping me, there will be something for others in here via the PH search engine.
As a pointer from me, the Pension Ombudsman website has a case history, with thousands of examples of complaints upheld or otherwise on it. The search engine isn’t great, but talking to the guys there they can provide hints - for example in my case, his suggested terms to use were “misinformation and divorce”, miles away from my title on this thread which seemed to be a little more precise to the layman... but isn’t. Once you get familiar reading the terminology used in the cases, then search text refinement can take place.
If you message me, I’ll e-mail you this document about pensions on divorce. It’s not definitive, it’s not final and it’s not financial or legal advice, but it will give you some food for thought and some ‘headers’. Definitely take suitably qualified legal advice. If you haven’t got a divorce illustration, if the trustee has given you a transfer value with a value reduced for risk, your partner might have different options for instance.
But take suitably qualified legal advice.
<<This guidance seeks to explain the most critical legal issues facing practitioners, the judiciary and the public in the area of pensions on divorce.1 The objective in this comparatively brief narrative is to inform and to suggest good practice.
It comes as no surprise to anyone experienced in this field that, even 17 years after the introduction of pension sharing, all of the professionals involved (lawyers, the judiciary and pensions experts) are still by no means comfortable with the issues that confront them. This may be due to the diverse nature of pensions and the myriad different regulations that govern them. It may also be due to the fact that there is very little in the way of guidance from the higher courts. Where such guidance does exist, there is no clear consistency of judicial thinking and the decisions relate, in the main, to bigger money cases that are not the mainstream work of the Family Court.
Furthermore, for understandable reasons, the majority of reported cases relate to high value claims, whereas the vast majority of applications made or settled in family courts up and down the country are much smaller needs-based cases. All of this may be reflected in the fact that offsetting remains the most commonly adopted remedy. Pensions are not alone in being an area where family law overlaps with other areas of law: trusts and company law are other examples. However, it remains the fact that for many family lawyers pensions law (and the associated tax implications) remain foreign territory.
It is hoped that this working paper will draw attention to potential pitfalls and provide a good practice guide. Our recommendations, made throughout the body of this document and with key points collated on the following page, include suggested guidance aimed at achieving consistency of approach. In various places, we refer to the exercise of judicial discretion on particular points – we do so mindful of the fact that the vast majority of cases are, of course, not adjudicated at the end of contested proceedings, but are settled with or (more commonly) without contested proceedings being initiated.>>
But take suitably qualified legal advice.
<<This guidance seeks to explain the most critical legal issues facing practitioners, the judiciary and the public in the area of pensions on divorce.1 The objective in this comparatively brief narrative is to inform and to suggest good practice.
It comes as no surprise to anyone experienced in this field that, even 17 years after the introduction of pension sharing, all of the professionals involved (lawyers, the judiciary and pensions experts) are still by no means comfortable with the issues that confront them. This may be due to the diverse nature of pensions and the myriad different regulations that govern them. It may also be due to the fact that there is very little in the way of guidance from the higher courts. Where such guidance does exist, there is no clear consistency of judicial thinking and the decisions relate, in the main, to bigger money cases that are not the mainstream work of the Family Court.
Furthermore, for understandable reasons, the majority of reported cases relate to high value claims, whereas the vast majority of applications made or settled in family courts up and down the country are much smaller needs-based cases. All of this may be reflected in the fact that offsetting remains the most commonly adopted remedy. Pensions are not alone in being an area where family law overlaps with other areas of law: trusts and company law are other examples. However, it remains the fact that for many family lawyers pensions law (and the associated tax implications) remain foreign territory.
It is hoped that this working paper will draw attention to potential pitfalls and provide a good practice guide. Our recommendations, made throughout the body of this document and with key points collated on the following page, include suggested guidance aimed at achieving consistency of approach. In various places, we refer to the exercise of judicial discretion on particular points – we do so mindful of the fact that the vast majority of cases are, of course, not adjudicated at the end of contested proceedings, but are settled with or (more commonly) without contested proceedings being initiated.>>
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