Advice on mistakenly overvalued fund

[dermotmeath]

Can I ask your advice or opinions please?

I’ve received a letter from my pension company saying that due to administrative error, for the last 12 years they have mistakenly double counted the assets of my pension fund since it opened.

They now tell me my pension fund is less than half what I had been led to believe it was.

Basically on opening the pension fund, the company correctly allocated money to a personal self-administered fund with their nominated brokerage but then they also allocated the funds to their own default managed pension fund. The broker has been sending quarterly valuations of their portion while the pension company has been sending half yearly valuations of the two funds.

I did not notice the mistake at the time either but for over 12 years I have been getting statement letters that state the value of my pension as double its actual value. Then out of the blue, came this letter saying it was all an administrative mistake, sorry for any inconvenience.

To rub salt in further, the value of the self-managed fund has halved as it contained positions in blue chips such as Irish banks.

If I had realised this valuation mistake earlier, would I have made the same investment decisions over the last 12 years? Short answer is no.

How would you react to such a letter?

 

[TheFatMan]

File a comlpaint with the trustees of the scheme through the complaints process (they should have one under pension board rules) outline your position and their mistake that has caused you to make poorly judged investment decisions. You may not get the additional funds you shouldnt have been getting back but they may cover the losses you made because you have the wrong info. If they refuse you can appeal to the pensions ombudesman on the basis of mal-administration. Again you wont get the benefit of the mistake but you may get the funds you put in back. But you will need to go through the complaints process with teh pension trustees 1st. They are obliged to respond within specified time periods.

 

[dermotmeath]

Many thanks for your advice Fatman. I'm not sure who the trustees are anymore but I'll check the paperwork. I'll also read up on the complaints process.

 

[10romans]

You have a strong case. A once off mistake can happen. However 12 years of continuous errors which impacted investment decisions is maladministration. Complain in detail to the provider and if unsuccessful go to the FSO or the PO. Be firm, detailed but not over the top.

 

[Jim2007]

Can I ask your advice or opinions please?

I’ve received a letter from my pension company saying that due to administrative error, for the last 12 years they have mistakenly double counted the assets of my pension fund since it opened.

They now tell me my pension fund is less than half what I had been led to believe it was.

Basically on opening the pension fund, the company correctly allocated money to a personal self-administered fund with their nominated brokerage but then they also allocated the funds to their own default managed pension fund. The broker has been sending quarterly valuations of their portion while the pension company has been sending half yearly valuations of the two funds.

I did not notice the mistake at the time either but for over 12 years I have been getting statement letters that state the value of my pension as double its actual value. Then out of the blue, came this letter saying it was all an administrative mistake, sorry for any inconvenience.

To rub salt in further, the value of the self-managed fund has halved as it contained positions in blue chips such as Irish banks.

If I had realised this valuation mistake earlier, would I have made the same investment decisions over the last 12 years? Short answer is no.

How would you react to such a letter?

If I understand it correctly the valuation of the funds themselves is correct, but the statements presented to you showed a double accounting right from the start, is that it?

- If so then you should have detected it yourself through your own diligence... valuations don't just double over night.

- It is going to be very hard to argue that you have been diligently watching your investments and would have made different decisions, if you did not even notice the double accounting....

- Furthermore, if the details of each fund were correctly calculated and presented to you, then you had enough information to take appropriate action, despite the fact that the total was wrong...

My guess is that if you complain a bit you might get some kind of an offer, but the bottom line is that if you were as diligent as you are about to argue, then you should have easily caught this error, so think very carefully about any offer before rejecting it.