# Occupational Pension Acorn: witheld most of the first years contributions, legal?



## mukki (25 Jan 2008)

wife set up a pension with acorn life....
she was lodging something like 80 euro into it every month, and her employers were doing the same, so about €160 a month

she left the company about 10months later and the employers clawed back what they paid into it

she was asked if she wanted a refund or to keep the pension going herself, we are building at the moment, and she has a scheme with the new job, so she decided to take the money,

she got a check for €110


when she rang up she was told that most of the first years pension contributions is used to set up the pension scheme


is this for real?, surly they must give you back what you gave them????


edited subject... it was changed by a mod, and slightly altered the question i was asking,


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## ClubMan (25 Jan 2008)

*Re: This can't be legal*



mukki said:


> wife set up a pension with acorn life....
> she was lodging something like 80 euro into it every month, and her employers were doing the same, so about €160 a month
> 
> she left the company about 10months later and the employers clawed back what they paid into it


Quite legal. Most (all?) occupational pension funds have a two year vesting period which means that employer contributions are only secured after being a member of the scheme for that long.


> she was asked if she wanted a refund or to keep the pension going herself, we are building at the moment, and she has a scheme with the new job, so she decided to take the money,


This issue is separate. Since she was taking a refund of her own personal contributions that is all that she gets back after deduction of the relevant taxes.


> when she rang up she was told that most of the first years pension contributions is used to set up the pension scheme


That is another separate issues - one of high charges.


> is this for real?, surly they must give you back what you gave them????


It is for real. No they don't. Why do you think it's illegal? Did you/she not read any of the documentation about the scheme before signing up and making assumptions?


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## LDFerguson (25 Jan 2008)

*Re: This can't be legal*

Acorn Life policies tend to impose heavy charges in the first year or two, in my experience.  Unfortunately disclosure of commissions or charges is not obligatory in relation to Occupational Pension Schemes.


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## ClubMan (25 Jan 2008)

*Re: This can't be legal*



LDFerguson said:


> Unfortunately disclosure of commissions or charges is not obligatory in relation to Occupational Pension Schemes.


Really!? They are not obliged to tell you how much of each contribution is actually invested?  Even if not obliged to do so do many *NOT *do this as a matter of course?


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## LDFerguson (25 Jan 2008)

*Re: Occupational Pension Acorn: Company has clawed back its contributions, is this le*

Yup - Occupational Pension Schemes slipped under the net of the disclosure regulations.  Not entirely sure why.  Something to do with an OPS being a contract between a corporate entity (the trustee) and the pension provider, rather than between an individual and the pension provider.     

A good pension advisor will disclose charges and commissions anyway, but that's up to indivudual ethics.


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## ClubMan (25 Jan 2008)

*Re: Occupational Pension Acorn: Company has clawed back its contributions, is this le*

I see - thanks.


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## mukki (25 Jan 2008)

*Re: Occupational Pension Acorn: Company has clawed back its contributions, is this le*

okay so it is not illegal, will definately warn people to avoid them


sorry for my rant,like everyone i hate to lose over €900


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## boaber (25 Jan 2008)

*Re: Occupational Pension Acorn: Company has clawed back its contributions, is this le*

Have a look at the scheme rules and see what they say.

For some schemes, the Rules specify that if a member leaves with less than 2 years service then one of the options available will be the _*higher*_ of a refund of employee contributions paid (less tax) *OR* a refund of the surrender value of the employee contributions (less tax).


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## LDFerguson (25 Jan 2008)

*Re: Occupational Pension Acorn: Company has clawed back its contributions, is this le*

Why don't you ask the Acorn Life sales person to detail what charges were taken out of your fund (including the employer contributions) and out of the charges, how much commission did they get between employer and employee contributions?  

It won't save you any money but it might make you feel a bit better if they squirm.


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## mukki (26 Jan 2008)

*Re: Occupational Pension Acorn: Company has clawed back its contributions, is this le*



LDFerguson said:


> Why don't you ask the Acorn Life sales person to detail what charges were taken out of your fund (including the employer contributions) and out of the charges, how much commission did they get between employer and employee contributions?
> 
> It won't save you any money but it might make you feel a bit better if they squirm.


 

will do, i myself am self employed and reluctant to get a pension after this


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## Brendan Burgess (26 Jan 2008)

Hi Mukki

You should not be reluctant to get a pension after this experience. 

You should of course avoid the products of Acorn Life due to their charging model. 

Most pension providers have lower up-front fees and lower early exit penalties. But do read the documentation first. 

Your wife should let her former colleagues know about Acorn. There might not be much that they can do about it, but they might put pressure on their employer to change pension provider.

Brendan


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