How can you check that final pension payments are correct ?

B

battyee

Guest
Having recently queried the amount of pension being paid to me from a pension fund they told me that there should have been a further 20,000 Euro paid by way of lump sum for annuity purchase or ARF. This is now being adjusted but without back dating or interest allowance.
I have reason to suspect that the amount of annual pension too is being underpaid.
Can any one advise me on how the figures can be checked for a company pension or how these figures are arrived at ? Can a pension provider be required to give a breakdown ?
 
Hard to give you any advice based on details, My suggestion is that you L

(1) find out who the pension scheme trustees are ..probably your employer.

(2) Write a letter to trustees setting out your query/compliant about your benefits and ask for a written reply.

(3) If you are unhappy, your scheme must have an internal complaints procedure ..if still unhappy after this, you can possibly refer your complaint to the Pensions Ombudsman.
 
Re: How can you check that final pension payments are correc

I came across a similar situation recently, where a retiring employee of a large bank got 3 different pension figures when retiring. It took a lot of legwork and studying of the small print to actually understand it. She actually got some help from a former pensions manager who helped her get to grips with it.

If you don't have any informal contacts who could help you on this, you might consider engaging an accountant or actuary to help you.
 
Re: How can you check that final pension payments are correc

This is a very good question.

Assuming we are talking defined contribution, I presume the only way to be *sure* the figures are correct is to start off from the very beginning, find out what funds were invested in, how much was invested, when it was invested, what the charges were, etc . . . and then build up a model over the years of contributions to see what the fund was supposed to be worth and then compare that with what the trustees tell you it was worth. That's a start.

Then you need to examine what way the fund was to be utilised, build the model again and see if this matches with the figures from the trustees.

I would imagine there is someone out there doing this type of work, but I can't imagine it would be cheap. Worth doing if they find something of course.

I guess people were happy to assume the fund was paying out the correct amounts up to now, but maybe with recent events in the banking sector people might like to check that the annual management fee was 0.5% as advertised and not 1.0% . . .

z
 
How are the calculations made.

I now have in my possession 3 different "Leaving Service Option Statements" from the company managing my defined benefit option pension. I discovered errors in two of them hence the 3rd. However, I have no way of calculating if the money benefits that will be given to me at age 65 are correct. Nor if I take my pension early how these calculations are being made.
I asked for an update on my AVC defined contribution, only to be told that the fund I was invested in was showing a minus growth for the past three years. Yet I have independent figures that show that the fund is actually in credit for the past 3 years.
I wrote to them two weeks ago for specific information but to date I have received no reply. I understand that they have 1 month to respond. A previous phone call to the Pensions Board was dealt with by someone who sounded unsure of the ins and outs of pensions, which frankly frightened me a little. I therefore think it best to contact the Pensions Board in writing.
I absolutely agree with previous posters concerns in this area, as my own experience shows.
At the end of the day, we should be shown how these calculations are arrived at, rather than take them on face value.
 
Pension calculations

Speaking with some experience of pensions, I would advise you never to assume that the calculations are correct. For defined benefit schemes, yes, ask for the calculations, but don't assume either that they have been done correctly or even interpreted the scheme rules correctly.

For defined contribution schemes, I would guess that the calculations are usually wrong, if only by very little. The trouble is that they are almost impossible to check. What you should always do is ask for a list of all the contributions you have made, the charges deducted, and the prices at which the contributions were deducted. Of course, most schemes' administration will be in such a state that they won'd be able to give this to you.

d
 
Statement of contributions.

But, are they required to give you this info under the pensions act?
What do you mean when you say "the prices at which the contributions were deducted" ?
 
Re: Statement of contributions.

"For defined benefit schemes, yes, ask for the calculations, but don't assume either that they have been done correctly or even interpreted the scheme rules correctly."

If this is the case, d53, how can you check that calculations are correct?

I have a defined benefit pension.
 
Checking pension contributions

Parklane

I don't think they are specifically required to give you the information under the Act, but at the same time, I doubt very much if the Pensions Board would be happy if they did not: it would certainly seem to be a good case for the Ombudsman if they did not.

Sorry, 'deducted' should be 'invested'.

Techman29

Yes, there is a problem. My point is that calculations may be wrong, and its not easy to check them. But I have seen cases where the rules have been interpreted wrongly in error. Mind you, some schemes have rules that are incomprehensible anyway.

I would suggest that you get details of their calculations and compare them with what the member booklet says. Alternatively, get a copy of the rules (you are entitled to this as a member of the scheme) and see how you get on. In either case, if you get stuck or have a problem, ask them to go through it with you, and to explain it. Every error I have seen is accidental, and sometimes going through it with you will bring this to their attention.

d
 
Statement of contributions.

If an individual has worked in a company for 20 years and is now retired with a defined benefit pension. Is it possible for him to request a statement of ALL of his monthly contributions for the past 20 years together with a statement showing all of his employer contributions for the past 20 years?.

Do companies normally invest workers pension contributions on a monthly basis or six monthly basis or yearly basis or what?
 
Investing contributions

Pension schemes are now required by law to invest contributions no later than the 21st of the month following. Most would have done this anyway.

There is nothing specific in any of the regulations that says that you are entitled to the 20 years of information. But when you retire, your scheme tells you what your fund is worth, which has to be based on that information. If they don't have it, they cannot assure you that the figures are correct: if they do have it, you have a natural (if not a strict legal) right to see it. I still say that if they won't give you the info, talk to the Pensions Board or the ombudsman.

d
 
20 years of DB contributions

Within a DB scheme you receive a promise that you benefit is defined. There is no link between contributions that are paid by the employee and the benefit received - except for certain technical points.

So the fact that money is / isn't invested and the relevance of 20 years of employee contribution information is lost on me.
 
20 years of DB contributions

Azriel - what you say is true, but the references to time of investment and 20 years of info were in relation to defined contribution.

But my other point is that the DB calculations of your benefit can be wrong.

d
 
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