Friends Provident is under pressure to amend its windfall payout strategy for some rebate-only pension policyholders following confirmation from the Inland Revenue that contributions cannot be brought forward arbitrarily.
The news follows campaigning by Aon McMillen Consulting senior consultant Richard Oates.
The life office is also under fire from some IFAs over the conduct of the conversion vote. Peter Rutherford & Co Financial Planning Services technical manager Mike Gordon says the combined question of conversion and membership rights should be put to members separately.
On the rebate issue, Friends said because it had not had any contributions into Oates' pension before March 31 – a week before the end of tax year – it ruled that while such new rebate-only policyholders could be classed as members of the scheme, they could not be members of the life office. This rules some policyholders out of valid claims for windfalls.
Friends acknowledges that individuals have no control over when contributions are made but it has so far been uncompromising on its position for new rebate-only policyholders.
But the Revenue wrote to Oates this week to say the end of tax year is always March 5 and contributions cannot be paid into schemes any earlier.
Friends previously claimed that any complaints by rebate-only pension policyholders should be with the DSS, which had not made payments in time for the March 31 deadline.
Oates says: “The windfall is not the issue. I can't be the only one being denied over a situation beyond my control.”
Friends was unavailable for comment.
l Letter, p23