# Eagle Star Pension fund closing value?



## sealine (22 May 2008)

Maybe some of the members on here could offer their thoughts on an issue which recently arose with a Closing Value on a company pension fund.

The company I work with, have a company pension scheme with a Financial Broker who decided to switch the Pension Fund from Eagle Star to New Ireland, in and around the summer of 2000. 
This was done in June / July 2000 and we all thought it was done correctly. We thought no more of it until March of this year.
There were originally 24 members in that fund and it now transpires that Eagle Star issued cheques in March 2008 to 7 members of the scheme (of varying values), stating that the fund was *valued incorrectly*.

How could this happen? 
Would this be a regular occurrence with a Financial Company such as Eagle Star?
What would trigger an Audit or a rechecking in 2008 of the Final Closing balance arrived at in 2000?
Would they just do a random sample recheck of a Pension Scheme? Or would they recheck every member of that scheme?
Would we be entitled to ask to how the fund was originally valued and portioned between the members?

To me this whole situation seems strange to say the least, but then again such financial matters are not a area where I would be well up on – hence any thoughts / advice welcome.

Thanks Sealine


----------



## LDFerguson (23 May 2008)

It's hard to comment without knowing more about the specifics.  Life assurance companies do carry out random internal audits and occasionally mistakes are discovered.  I would consider it unusual that they would be going back nearly 8 years to re-check unless someone or something prompted them to do so.  I work as a broker and haven't worked directly for a life assurance company for over 12 years, but my experience has been that valuation errors are relatively rare in the context of the thousands of transactions that the various companies process each year.  But that's purely anecdotal.  

If you have concerns about this, you should write a letter to the Trustees of your scheme expressing your concerns and putting your questions to them.  If you are not satisfied with the reply, you can refer the matter to the .


----------



## sealine (23 May 2008)

Thanks LD

I have asked the trustee of the scheme, who agrees with me because the trustee’s were NOT notified about the refund directly and only knew about the cheques after a cheque was posted to the trustee’s home a week later. 
I have contacted Eagle Star directly and it has been passed on to ‘_senior management’_ who have been working on a reply for the last month now.

I have also emailed 'enquiries@financialombudsman.ie' with my concern and asked for advice on how I should proceed. Haven got any reply to date, so I posted here. Maybe I should have rang, but as it’s a long tale I thought it better as a mail enquiry

Basically, the company pension trustee nor the broker (who the scheme is administered with) were notified by Eagle Star in advance that there was a issue with the closing / transfer value of the fund. 
The first anyone knew about anything was when cheques arrived in the post.

The trustee was approached by some members and asked where and what these Eagle Star cheques were for. The trustee then rang the broker for advice and was told that nobody should cash these cheques until he found out what it was all about. The following couple of days later in early March the trustee then received a cheque at their home address. By this stage most of the cheques were lodged by the people who got them - surprise surprise - and the broker had gone on holidays (it was around the week of Paddy’s day and Easter) 
Nothing more was heard since except that the broker replied to my email in which agrees that there is an ‘issue of confidence’ with Eagle Star. 
His main concern was that they didn’t contact him before hand and let him know what was about to happen so he could prepare. 


My concern is as stated in my post, why would 7 out of 24 get a cheque back 8 years later if the fund was valued correctly?
If it was valued incorrectly at the time as it now transpires what would bring that to light now?
Why would only some not all members receive a refund?
How would mistakes be made with some policies and not others?
Who check’s these closing values?
Should our broker have not rechecked or double checked the values at the time? .i.e not taken their value as fact?
How can we be sure the correct values were applied to each member of the scheme?
How are we (the members of the pension scheme) sure in the knowledge that all is well with our current pension fund - as stated by our broker there is now ‘issue of confidence’ with the previous fund!

Sorry for the long post but as I am not a financial expert I cant seem to understand what happened and Eagle Star haven’t answered any of my questions


----------



## MugsGame (23 May 2008)

There may also be a tax issue here in that any "revaluation" cheques should probably have been transferred to the new fund, and not cashed.


----------



## sealine (23 May 2008)

Hi Mugs Game

Yes I thought of that too

There are 3 players in a pension fund

The person who pay’s a monthly contribution in my case 15% of salary
The tax man who allow’s this amount net of tax 
And the company who in our case puts 10% of our salary

So if monies were to be refunded before the term of the pension were met – i.e before retirement age then the company should receive its share back and also should the tax man. 

Would that have to happen if it was a error in the valuation of a closing value?


----------



## LDFerguson (23 May 2008)

If the cheques from Eagle Star were in respect of underpayments of members' transfer values, they should have been lodged only to the members' new pension fund with New Ireland.  They should not have been cashed or in any way made available to the members themselves.  

The Financial Services Ombudsman is likely to refer you to the Pensions Board or Pensions Ombudsman who would normally deal with complaints to do with pension schemes.  The Pensions Ombudsman will want to see written explanations from all relevant parties.  I see that such an explanation is on its way from Eagle Star.  If it doesn't come soon, a quick call to the Pensions Ombudsman's office might help hurry things along.  

Incidentally, I know that senior management from Eagle Star (and most other life assurance companies) do read Askaboutmoney from time to time.  As such, your posts here may identify your company as it's an unusual situation.  This may or may not bother you.  If it does, use the Report a Post button (red triangle to the right of posts) to contact a moderator.


----------



## oldtimer (31 May 2008)

What is loveumaryii talking about? Should this be on AAM?


----------



## Dave Vanian (1 Jun 2008)

oldtimer - it was spam and has been deleted.


----------

