The Pensions Ombudsman has awarded a pensioner nearly £10,000 after provider Abbey Life and consultant Towers Watson failed to alert her to a guaranteed annuity rate.
Diane Godfrey paid into a company pension scheme, administered by Abbey Life, for two years up to 1980.
She retired in 2004 but according to the Ombudsman was not issued with a retirement pack, which would have alerted her to the existence of a valuable guaranteed annuity rate.
In addition, Towers Watson was also found guilty of maladministration for not asking Abbey Life for a benefits quotation.
Godfrey says if she had known about the guaranteed rate she would have taken it rather than go on the open market to buy an annuity.
As a result she bought an annuity paying £1,938.24 a year when the guaranteed annuity rate would have paid £2,809.72.
The Ombudsman ruled Abbey Life to pay Godfrey £7,603, plus interest, to compensate for the lower income she received between 2004 and 2015.
Godfrey will also receive income from a new annuity to make up the shortfall and £750 from both Abbey Life and Towers Watson for the inconvenience caused.
However, a similar complaint made by Martin Sayer about Abbey Life and Towers Watson was rejected by the Ombudsman.
Sayer said the firms failed to inform him that his policy had a guaranteed annuity rate when he transferred out of the plan in 2002.
But the Ombudsman said the complaint should not be upheld as the respondents were not advising him about a transfer and because there was “no mandatory obligation to disclose information regarding GARs on transfer”.
Ombudsman Anthony Arter adds he is not convinced knowing the existence of a GAR would have meant Sayer would have decided against a transfer.
He says: “He had taken advice from his IFA, and whilst the IFA’s report giving his recommendation is no longer available, there was clearly a good reason for him to transfer.”
He adds: “Given that neither Abbey Life nor Towers Watson were advising Mr Sayer about the transfer of his pension rights, I do not consider it would be fair, just and reasonable to impose such a liability on them.”