ChatterBank1 min ago
Retirement & pension shambles
7 Answers
Part 2
Obviously he is not happy and has consulted with the union, who are supposed to be getting back to him. The last he heard was 7th October when the union rep told him that when he spoke to the pension department to ask why they hadn't paid him his monthly pension, the woman there replied "thank God my hands are clean on this one". Since then he has heard nothing. He has written to the ********* and he wrote back with his apologies and said he has passed it to his deputy to deal with. He has, however, received Novembers pension payment. I realise that this is Employment Law but I'm really hoping that somebody can offer advice. The lump sum is in the bank in an account where it is locked for 12 months. He has been advised by the union not to touch the money. I don't want to get emotional about this and before anyone says there are people far worse off, I do realise that, but we had made plans based on what he was told he was getting and now those plans have been scrapped. I feel also that it is SO shoddy to treat a long serving employee with 2 bravery commendations in this way. To add insult to injury, about a 6 weeks AFTER he left, he was sent an invitation to a retirement seminar in preparation for his "forthcoming retirement"!!! This mistake will also affect his monthly pension payment. My question actually is, how can this happen? If and when he has to repay the money will they have to compensate for the lost interest. Can he offer to pay it back gradually? I think he should go to see our MP. Thank you
Obviously he is not happy and has consulted with the union, who are supposed to be getting back to him. The last he heard was 7th October when the union rep told him that when he spoke to the pension department to ask why they hadn't paid him his monthly pension, the woman there replied "thank God my hands are clean on this one". Since then he has heard nothing. He has written to the ********* and he wrote back with his apologies and said he has passed it to his deputy to deal with. He has, however, received Novembers pension payment. I realise that this is Employment Law but I'm really hoping that somebody can offer advice. The lump sum is in the bank in an account where it is locked for 12 months. He has been advised by the union not to touch the money. I don't want to get emotional about this and before anyone says there are people far worse off, I do realise that, but we had made plans based on what he was told he was getting and now those plans have been scrapped. I feel also that it is SO shoddy to treat a long serving employee with 2 bravery commendations in this way. To add insult to injury, about a 6 weeks AFTER he left, he was sent an invitation to a retirement seminar in preparation for his "forthcoming retirement"!!! This mistake will also affect his monthly pension payment. My question actually is, how can this happen? If and when he has to repay the money will they have to compensate for the lost interest. Can he offer to pay it back gradually? I think he should go to see our MP. Thank you
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Have you missed part of the story? In part 1 I thought this was about the first payment being delayed and the subsequent amount being less than expected. But in part 2 you suddenly refer to a lump sum you are being asked to repay. It would help if you could clarify what this lump sum is and whether it is more than you expected.
Are you saying they paid too much as a lump sum (which you then put in a one year notice account) and therefore that left less to be paid as monthly pension; so now you want to keep the lump sum for 12 months and take the higher monthly pension?
Thanks.
Are you saying they paid too much as a lump sum (which you then put in a one year notice account) and therefore that left less to be paid as monthly pension; so now you want to keep the lump sum for 12 months and take the higher monthly pension?
Thanks.
I'm so sorry. I'm not explaining this very well. That's not what I mean at all. He was initially given in writing, both amounts ie the lump sum amount and the monthly pension amount. He was duly given the lump sum, which was exactly the amount he was told he was to receive and obviously put it directly into the bank in an account which would earn better interest in a week where we were seeing banks collapsing and merging etc. He had absolutely no reason to suspect that amount was incorrect. Then, about 5 weeks later, when his first monthly pension payment was due, it was not paid, and when he rang to ask why , he was told that there had been a mistake, and he had been given too much as a lump sum (consequently it is going to affect the monthly payments too). I think they were trying to not pay him the monthly payment at all, until the union stepped in. I hope that's a bit clearer. Thank you for answering.
Well I'm confused. In response to my comment you say "that's not what i mean at all" and then descibe the situation in just the same way as I did!
I undertsand the position is as follows:
The employer said it would pay a monthly pension of �N and a lump sum of �X; it paid him a lump sum �X and then said it had made a mistake and should have paid less than �X. It now wants the overpayment back or says it wil have to pay him a lower monthly pension.
Is this a fair summary?
If so, it's a very unfortunate situation but if it was a genuine mistake by the employer/pension scheme than I think they can do what they are doing- in fact I think the trustees have a duty to look after the pension scheme's assets, and it's not fair on other members if your husband gets more than his fair share.
Did he receive annual statements each year? Was the final (incorrect) statement in line or significantly out of line with all the others, in which case should your husband have realised there was an error?
Hopefully a compromise can be found.
I undertsand the position is as follows:
The employer said it would pay a monthly pension of �N and a lump sum of �X; it paid him a lump sum �X and then said it had made a mistake and should have paid less than �X. It now wants the overpayment back or says it wil have to pay him a lower monthly pension.
Is this a fair summary?
If so, it's a very unfortunate situation but if it was a genuine mistake by the employer/pension scheme than I think they can do what they are doing- in fact I think the trustees have a duty to look after the pension scheme's assets, and it's not fair on other members if your husband gets more than his fair share.
Did he receive annual statements each year? Was the final (incorrect) statement in line or significantly out of line with all the others, in which case should your husband have realised there was an error?
Hopefully a compromise can be found.
Thanks again for your answer. That's almost what I mean. But it's not a case of asking for the overpayment back OR else he'll get less each month., rather than the overpayment being repaid AND he'll be paid less each month. His monthly pension was based on the figures they gave him and will be less. He retired on the basis that we would have �X each month and �Y as a lump sum, but now we find it to be �Q each month and �11 less lump sum. HAd he known that he would have stayed for another 3 years probably. He is in no way expecting more than his fairshare. He doesn't have any "annual statements" as he's only just retired. The question I am trying to ask is: In view of the fact that it is their error, he will lose interest on the money from the timeit has been in the bank, and will probably also have to pay some sort of forfeit for not leaving it in for the 12 months. This being the case will the ************* have to compensate him for that loss. Surely he shouldn't be out of pocket from their mistake. Why would he even suspect that a mistake had been made? If they were witholding his monthly payment I'm not even sure that that is legal. We are simply appalled at how it is being handled. There has been no communication since October 7th. The person who dealt with it even said to the union rep "thank god my hands are clean on this one" . This implies to me that perhaps it has happened previously.
Sorry to hear about your husband's difficulties.
The first thing to ask is whether your husband's scheme is based upon defined contributions or whether it is based upon defined benefits.
Let me explain the difference - a defined contributions scheme is sometimes referred to as Money Purchase. The pension benefits depend upon the the growth in the investments in the Pension Funds, manged by the trustees. Each year during the savings, one typically gets a statement and at the end when one retires, the some of money is used to buy a pension. It is NOT linked to the salary on retirement.
Defined benefits schemes are becoming as rare as hen's teeth (unless one works for the Government) because the risk of any funding shortfall is with the employer. The pension is based on a formula which includes the no. of years worked and the fianl salary. They are sometimes called final salary schemes.
I suspect your husband does not have one of these.
Now, as to whether anyone can be held accountable for the mess-up.
Pension projections are often assured for a short period of time when they are made. Was there anything on the projection to say how long the 'quote' would last?
I suspect what has happened is that he has a defined contributions scheme and the 'quote' was based upon investment values that fell sharply in September - global recession and all that stuff. However the projection should have made this clear or a period of holding firm should have been quoted.
Please tell us what type of scheme he has.
Your route to complaint (if you have one - not sure that you do yet - we need answers to my answers) is likely to be via this crowd.
http://www.thepensionsregulator.gov.uk/members /index.aspx
There is some useful stuff in this website - could I recommend that you
The first thing to ask is whether your husband's scheme is based upon defined contributions or whether it is based upon defined benefits.
Let me explain the difference - a defined contributions scheme is sometimes referred to as Money Purchase. The pension benefits depend upon the the growth in the investments in the Pension Funds, manged by the trustees. Each year during the savings, one typically gets a statement and at the end when one retires, the some of money is used to buy a pension. It is NOT linked to the salary on retirement.
Defined benefits schemes are becoming as rare as hen's teeth (unless one works for the Government) because the risk of any funding shortfall is with the employer. The pension is based on a formula which includes the no. of years worked and the fianl salary. They are sometimes called final salary schemes.
I suspect your husband does not have one of these.
Now, as to whether anyone can be held accountable for the mess-up.
Pension projections are often assured for a short period of time when they are made. Was there anything on the projection to say how long the 'quote' would last?
I suspect what has happened is that he has a defined contributions scheme and the 'quote' was based upon investment values that fell sharply in September - global recession and all that stuff. However the projection should have made this clear or a period of holding firm should have been quoted.
Please tell us what type of scheme he has.
Your route to complaint (if you have one - not sure that you do yet - we need answers to my answers) is likely to be via this crowd.
http://www.thepensionsregulator.gov.uk/members /index.aspx
There is some useful stuff in this website - could I recommend that you
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