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Pensions ombudsman sides with Aviva on pension loss case

Pension changesA complaint that an Aviva system error kept an investor from retirement for five years and resulted in substantial financial distress has been rejected by the Pensions Ombudsman.

The complainant – Mr D – held an Aviva Pension Plan until 2008, during which time he was underpaid £37,010.57 due to a fault in Aviva’s processing system discovered by the provider in December 2017.

Aviva subsequently paid the shortfall to Mr D including the 1 per cent Bank of England interest rate, amounting to £42,482.04.

Mr D approached Aviva asking for 8 per cent interest on the shortfall, which was denied. Mr D was awarded £500 from Aviva for distress and inconvenience.

Without Aviva’s error, Mr D says he would have been able to retire at 65 rather than 70 and use the missing amount to repay his mortgage.

Aviva sets aside further £90m for Friends Provident DB transfer advice issue

The complaint was referred to The Pensions Ombudsman.

Ombudsman Anthony Arter says the redress offered by Aviva was reasonable.

In not upholding the complaint, the redress, interest level and compassionate payment of £500 were deemed appropriate.

Arter says: “Mr D has not provided any evidence to substantiate his claim that his intention was to use his pension benefits to pay off his mortgage. Whilst I understand that not retiring earlier has caused Mr D upset, it does not mean there is a further financial loss. Mr D continued in employment so continued to be reimbursed for his services.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. The obvious point here is that the complainant asked for 8 per cent interest, which FOS would have awarded, but TPO didn’t.

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