Occupational Pension Scheme Problem
Discussion
Hey guys, can anyone help with this problem please.
The story:
Approx. 11 years ago lucy and her husband were both made redundant from
the same company after 18 years service.
They both paid into the company pension scheme through a company called The
David Smith Group.
Their contributions remained with the pension group after they were made
redundant.
Approx. 18 months later they were approached by a friend who had a 'friend
' who could 'release' their contributions and provide them with a lump sum.
They had a mortgage, 2 children and finances were very tight. They saw this
as an opportunity to reduce their mortgage and ease the financial burden.
They were paid approx. £30k jointly after paying a 20% commission to the
'friend'
£20k they paid off the mortgage and the rest paid for new windows
throughout the house.
Approx. 18 months after this transaction occurred they received letters
from both the Inland Revenue and The David Smith Group.
The Inland Revenue were asking for 40% tax on the entire £36k payout. They
were extremely vigorous in establishing exactly what was owed.
The pension company were asking for their 'protected rights' portion of the
lump sum, approx. £12k.
Lucy and Joe re-mortgaged and paid off the tax man in full and are
paying £50.00 per month to the pension company.
There are other people affected by this but none that they can contact to
see if they have had the same experience.
It appears that The David Smith Group 'invested' the entire pension fund
with a 3rd party 'unknown' company which no-one has a trace of and Lucy
and Joe have been advised that the pension company should have retained a
portion of the fund. It is this portion that they appear to be claiming
back off Karen and her husband.
They have spoken with The CAB. , accountants and other advisory centres
all to no avail. No-one understands there situation nor can offer any
advice.
Is the pension company entitled to claim back this money and if they do so
does this mean that there is still a pension fund which Lucy and Joe can
draw from at retirement age.
I am a trainee solicitor and i have no idea what this is about. There friends of mine and would really like to get this sorted one way or the other.
I don't know the details surrounding this friend who released the lump sum as they are not too sure themselves.
Please guys, any info would be very welcome indeed.
cheers in advance.
The story:
Approx. 11 years ago lucy and her husband were both made redundant from
the same company after 18 years service.
They both paid into the company pension scheme through a company called The
David Smith Group.
Their contributions remained with the pension group after they were made
redundant.
Approx. 18 months later they were approached by a friend who had a 'friend
' who could 'release' their contributions and provide them with a lump sum.
They had a mortgage, 2 children and finances were very tight. They saw this
as an opportunity to reduce their mortgage and ease the financial burden.
They were paid approx. £30k jointly after paying a 20% commission to the
'friend'
£20k they paid off the mortgage and the rest paid for new windows
throughout the house.
Approx. 18 months after this transaction occurred they received letters
from both the Inland Revenue and The David Smith Group.
The Inland Revenue were asking for 40% tax on the entire £36k payout. They
were extremely vigorous in establishing exactly what was owed.
The pension company were asking for their 'protected rights' portion of the
lump sum, approx. £12k.
Lucy and Joe re-mortgaged and paid off the tax man in full and are
paying £50.00 per month to the pension company.
There are other people affected by this but none that they can contact to
see if they have had the same experience.
It appears that The David Smith Group 'invested' the entire pension fund
with a 3rd party 'unknown' company which no-one has a trace of and Lucy
and Joe have been advised that the pension company should have retained a
portion of the fund. It is this portion that they appear to be claiming
back off Karen and her husband.
They have spoken with The CAB. , accountants and other advisory centres
all to no avail. No-one understands there situation nor can offer any
advice.
Is the pension company entitled to claim back this money and if they do so
does this mean that there is still a pension fund which Lucy and Joe can
draw from at retirement age.
I am a trainee solicitor and i have no idea what this is about. There friends of mine and would really like to get this sorted one way or the other.
I don't know the details surrounding this friend who released the lump sum as they are not too sure themselves.
Please guys, any info would be very welcome indeed.
cheers in advance.
This all sounds rather dodgy to me.
Do you mean DS Smith PLC?
How old were they when their contributions were 'released'? (under age 50, currently, and assuming they are in good health, this is not normally possible) If an individual receives benefit from a Pension scheme to which they were not entitled, this can be reclaimed, and even the entire pension unwound. (it sort of sounds like this is what is happening)
I don't see why the Pension scheme would be asking for the 'protected rights' element back as this relates to the contracted out element(of SERPS/S2P) and if there were an issue and this needed reclaiming, I would expect this to be done via the revenue rather than the company.
As to where the company invested the money, this should be an entirely seperate issue. In fact, it is not the company who would (normally) have invested the money, but rather the Trustees of the Pension scheme itself, which would be an independant company.
The key here for me would be to intially establish how the funds were 'released'. Surely they have some paperwork relating to this which could be the starting point of any investigation as to the sequence of events.
Oh, and 20% commission!
Do you mean DS Smith PLC?
How old were they when their contributions were 'released'? (under age 50, currently, and assuming they are in good health, this is not normally possible) If an individual receives benefit from a Pension scheme to which they were not entitled, this can be reclaimed, and even the entire pension unwound. (it sort of sounds like this is what is happening)
I don't see why the Pension scheme would be asking for the 'protected rights' element back as this relates to the contracted out element(of SERPS/S2P) and if there were an issue and this needed reclaiming, I would expect this to be done via the revenue rather than the company.
As to where the company invested the money, this should be an entirely seperate issue. In fact, it is not the company who would (normally) have invested the money, but rather the Trustees of the Pension scheme itself, which would be an independant company.
The key here for me would be to intially establish how the funds were 'released'. Surely they have some paperwork relating to this which could be the starting point of any investigation as to the sequence of events.
Oh, and 20% commission!
JD247 said:
This all sounds rather dodgy to me.
"As it does to me, thats why i thought it best to check."
Do you mean DS Smith PLC?
"Thats the one."
How old were they when their contributions were 'released'? (under age 50, currently, and assuming they are in good health, this is not normally possible) If an individual receives benefit from a Pension scheme to which they were not entitled, this can be reclaimed, and even the entire pension unwound. (it sort of sounds like this is what is happening)
"Interesting. At the time they were both well under 50 and are just over that
mark now. Both in fine health."
I don't see why the Pension scheme would be asking for the 'protected rights' element back as this relates to the contracted out element(of SERPS/S2P) and if there were an issue and this needed reclaiming, I would expect this to be done via the revenue rather than the company.
As to where the company invested the money, this should be an entirely seperate issue. In fact, it is not the company who would (normally) have invested the money, but rather the Trustees of the Pension scheme itself, which would be an independant company.
"I thought this too but they asure me is this is what happened."
The key here for me would be to intially establish how the funds were 'released'. Surely they have some paperwork relating to this which could be the starting point of any investigation as to the sequence of events.
Cheers, will look into that.
Oh, and 20% commission!
I know, but without knowing who this other 'friend' was/is there's very little i can advise them on about that.
Thanks for your help."As it does to me, thats why i thought it best to check."
Do you mean DS Smith PLC?
"Thats the one."
How old were they when their contributions were 'released'? (under age 50, currently, and assuming they are in good health, this is not normally possible) If an individual receives benefit from a Pension scheme to which they were not entitled, this can be reclaimed, and even the entire pension unwound. (it sort of sounds like this is what is happening)
"Interesting. At the time they were both well under 50 and are just over that
mark now. Both in fine health."
I don't see why the Pension scheme would be asking for the 'protected rights' element back as this relates to the contracted out element(of SERPS/S2P) and if there were an issue and this needed reclaiming, I would expect this to be done via the revenue rather than the company.
As to where the company invested the money, this should be an entirely seperate issue. In fact, it is not the company who would (normally) have invested the money, but rather the Trustees of the Pension scheme itself, which would be an independant company.
"I thought this too but they asure me is this is what happened."
The key here for me would be to intially establish how the funds were 'released'. Surely they have some paperwork relating to this which could be the starting point of any investigation as to the sequence of events.
Cheers, will look into that.
Oh, and 20% commission!
I know, but without knowing who this other 'friend' was/is there's very little i can advise them on about that.
Edited by Lofty_Piper on Monday 15th October 17:24
If it is DS Smith PLC, I suggest googling them them as I did, then clicking pension schemes link. This says their scheme is final salary and lists their investment advisers, legal reprensentation and scheme trustees. I would think the trustees would be able to shed some light on what has actually happened.
Gassing Station | Business | Top of Page | What's New | My Stuff