Private pension not paid for 3 years

S

scatriona

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Hi. Grateful for some advice on this pension query..... My aunt's bank flagged to her that her private (work) pension had ceased to be deposited in her account some time ago. I only looked into it today but after a call to the fund (with her permission) I discovered they had stopped paying it since August 2018 as they said that a certificate of identity had been sent out some time ago, but had not been returned by my aunt. Payments stopped subsequent to this... She may or may not have received this but unfortunately cannot remember, but then the customer agent said that there appeared to be a problem with her address & it may have been returned to them unopened. She has had the same address since birth so I'm not buying this & he also sounded sheepish...he agreed she was due the unpaid sum for almost 3 yrs worth of payments & promised to sort it immediately (no exact sum confirmed but it's approx 40k based on basic calcs).. my qu is should they offer her compensation for this ? It seems a rather big 'oversight' and not entirely her fault. Appreciate any advice.... Thank you.
 
I would ensure the amount due is paid before bringing up any compo. Some people do get letters checking they still exist, live, and are on this earth, nothing very unusual in that. Who knows, they may offer something to her on top of what she was owed.
 
Luckily she did not seem to be in need of the €40K during the past three years, and now that the payment is being regularised she may need to be careful she does not pay more tax than required on a one off payment if it brings her from a 20-40% tax threshold say.

I am assuming the pension company sent more than one letter? They probably followed up with letters announcing cessation of payments. You say she is vague about the letters she did get, so maybe a trawl through the paper work she has to see if there is anything else overlooked?

I do think it is fair to ask the pension company if their procedure was followed correctly at the time. When the letter returned did they check the details they had in their system. Do they have a process of sending out another letter automatically, manually etc. Do they have other contact details, phone etc? If you and they can discover a fundamental flaw in their system then it may help people in the future. But do ask the question. “My aunt had made no change to her details, phone, address, bank all the same and yet their process led them to believe she was dead, not the rightful recipient of the pension? Where did the system fail? Was only one letter ignored or were there multiple. Were efforts made to make contact by other means, bank, phone etc. Were any other steps taken to confirm that the pension recipient was dead, checking rip.ie, looking for a death certificate? Did anyone take any action aside from ceasing payment?
 
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Clamball said:
Luckily she did not seem to be in need of the €40K during the past three years, and now that the payment is being regularised she may need to be careful she does not pay more tax than required on a one off payment if it brings her from a 20-40% tax threshold say.

I am assuming the pension company sent more than one letter? They probably followed up with letters announcing cessation of payments. You say she is vague about the letters she did get, so maybe a trawl through the paper work she has to see if there is anything else overlooked?
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That's a very good point and should be a basis of any additional payment. She should not be out of pocket due to additional tax being deducted from the amount, so the life company should pay extra to cover the additional tax she will incur by going over the 20% threshold. Otherwise, she will not be at much of a loss given that there are no returns on deposits.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
She could ask Revenue about backdating some of the payments to the previous three years and re-submitting tax filings for those years. This would spread the payment over three years and might avoid paying 40% tax.

I was able to do this when I received a backdated pension payment some years ago. The backdated part was allocated to the previous year.
 
Thanks all, I had never even considered the tax implications. She's 85 and lives alone so I think 'lackadaisical' is a bit harsh but I take your point
 
Clamball said:
Luckily she did not seem to be in need of the €40K during the past three years, and now that the payment is being regularised she may need to be careful she does not pay more tax than required on a one off payment if it brings her from a 20-40% tax threshold say.

I am assuming the pension company sent more than one letter? They probably followed up with letters announcing cessation of payments. You say she is vague about the letters she did get, so maybe a trawl through the paper work she has to see if there is anything else overlooked?

I do think it is fair to ask the pension company if their procedure was followed correctly at the time. When the letter returned did they check the details they had in their system. Do they have a process of sending out another letter automatically, manually etc. Do they have other contact details, phone etc? If you and they can discover a fundamental flaw in their system then it may help people in the future. But do ask the question. “My aunt had made no change to her details, phone, address, bank all the same and yet their process led them to believe she was dead, not the rightful recipient of the pension? Where did the system fail? Was only one letter ignored or were there multiple. Were efforts made to make contact by other means, bank, phone etc. Were any other steps taken to confirm that the pension recipient was dead, checking rip.ie, looking for a death certificate? Did anyone take any action aside from ceasing payment?
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Thank you clamball, very helpful to know those qu's. The fund was transferred in 2017 from prev fund Mgmt company to the existing Mgmt. co, so I do think something was missed in this time. Also, the customer service agent admitted he could see her address on an old P45 so I don't believe procedure was thoroughly followed.
 
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