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Welcome to the sixth newsletter of 2009.
The next virtual live questions session is on Wednesday 12 August 2009 between 2pm and 3pm.
Click here for further information about the Live Q&A and view previous sessions.
At the beginning of the month, we published our annual report.
In the year ending March 2009, we dealt with a total of 7,746 complaints compared to 7,026 in the previous 12 months - an increase of 10%.
The biggest single cause of the rise in complaints was poor administration with increases in both delays and mistakes contributing heavily to the figures. Most of the complaints concerned individual pension plans, whilst complaints against occupational schemes actually fell by 2% compared to the previous year.
Chief Executive, Malcolm McLean, acknowledges that the tough economic conditions in the second half of the year may well have exacerbated the problem. "There was undoubtedly a 'double-whammy' effect", he says, "many savers had experienced significant reductions in the value of their pension savings from continuing stock market falls and delays in obtaining an annuity quote or award often meant a further reduction in the pension eventually secured."
A significant proportion of the complaints about delay reflected administrative malfunctions following insurance company mergers and take-overs. Problems in integrating systems after a take-over frequently caused delays in the payment of pension benefits and in responding to requests from policy holders. Individuals also advised TPAS of long delays in simply trying to get a response to their complaint.
Similarly, errors and mistakes were a source of discontent for many individuals. They resulted, not only in some instances in a loss of expectation, but actual financial loss when expenditure or commitments had been entered into in the belief that a pension award or lump sum was correct when, as it later transpired, it was not. In these instances, it was sometimes possible with TPAS's help to obtain compensation and/or a write-off of an overpayment where it could be shown that the individual had relied or acted on the incorrect information to their financial detriment.
The Annual Review details more of TPAS's activities in the year 2008/09. The number of general enquiries it received from the public continued to rise - 75,000 calls were dealt with on the helpline on top of the 12,500 written enquiries received by email or post.
Visitors to the TPAS website seeking information and guidance about pension issues across the board were also substantially increased. A new web tool Annuity Planner was introduced. In total, including the website visits, nearly three quarters of a million people used the TPAS service during the year.
A particular feature of the year was the increasing number of questions about the security of pension schemes and pension providers. There was also a rise in enquiries from people with money worries who were seeking information on whether they could access their pension funds to improve their financial situation.
Due to popular demand, the dedicated helpline for women's pensions continued throughout the year. Changes to state pension ages and qualifying rules from 2010 were also increasingly the subject of enquiries from both men and women. At the year end there was considerable interest in the changes to voluntary national insurance contribution rates and the extended right to pay these from April 2009.
Click here to download the report.
The Pensions Ombudsman (PO), the Pensions Regulator (TPR) and the Personal Accounts Delivery Authority (PADA) have published their annual reports this month.
Tony King, the Pensions Ombudsman, says "Without doubt the year under report has been a good year. We have effectively disposed of the office's long-standing backlog and have substantially met our other targets for the year. The number of new cases needing investigation during the year was 742, very much in line with previous years. The report notes that the economic downturn and its impact on pension funds is unlikely to have more than a delayed and indirect effect on complaint numbers."
Tony Hobman, Chief Executive of TPR, said: "This has been a tough year for schemes and for those running them. We have continued to deliver against our long-term strategic themes, focused on our statutory objectives, to protect member benefits, to reduce calls on the Pension Protection Fund and to raise the standards of governance and administration across work-place pensions in the UK. At the same time we have delivered extra support through the economic downturn, including a recent series of statements and a round of national workshops to explain our approach to scheme funding."
Tim Jones, Chief Executive of PADA, commented "The financial year marked a period of significant progress for the Personal Accounts Delivery Authority (PADA). With the Royal Assent of the Pensions Act 2008, we moved into the delivery phase of the project and began working towards the launch of the personal accounts scheme. I am pleased to report on our progress this year and achievements so far, while remaining mindful of just how far we have yet to go. Success will mean a better quality of life in retirement for millions of people. The importance of this goal drives everything we do."
Click here to download the Pensions Ombudsman's report.
Click here to download TPR's report.
Click here to download PADA's report.
At the end of last year, we reported that around 95,000 retired public sector employees had had their pensions overpaid. This was as a result of an error calculating Guaranteed Minimum Pensions (GMPs) and went back as far as 1978. The pensioners were not being asked to repay the overpayments.
The National Audit Office (NAO) has this month announced that the overpayment totalled £90.2m.
Click here to read NAO's review on the overpayment of public sector pensions.
The Government has announced that a review of the default retirement age of 65 originally scheduled for 2011 will be brought forward to next year. The review is expected to lead to a higher default age, or even a complete abolishment.
At the moment, anyone can ask to work beyond the age of 65, and their employer must consider their request, but employers can insist on retirement if they consider it both appropriate and necessary.
The Conservative Party has confirmed it will not scrap personal accounts should it win next year's general election.
Speaking at a recent National Association of Pension Fund (NAPF) seminar, pensions spokesman Nigel Waterson MP said he was working to persuade David Cameron of "the need of some continuity" on pensions.
Mr Waterson said the future system would need to be simple, accessible and easy to operate for the people who currently do not have access to a pension and they will need to find the best possible design for personal accounts.
Over the next few months, we will be out and about, hosting stands at the following shows. We will be more than happy to talk to visitors about any pension-related issue.
Fabulous At Fifty - Bournemouth International Centre - 9 & 10 October 2009
Retirement Show - Glasgow SECC - 13 & 14 November 2009
Professional Pensions Show - London ExCel - 18 & 19 November 2009
State Pension Ages are changing for men and women.
Between 2010 and 2020, the SPA for women will increase to 65 to ensure equality. Women born between 6 April 1950 and 5 April 1955 are affected by this change.
Between 2024 and 2026, 2034 and 2036 and 2044 and 2046, the SPA for both men and women will rise to 66, 67 and 68, respectively. Those born after 6 April 1959 are affected by these changes.
Click here to use our SPA Calculator and see when you will be able to draw your State Pension.
We're always keen to know how our website can be improved. Please therefore take a couple of minutes to fill out our feedback
Click here for further information.
TPAS is manned primarily by volunteers. We are always on the lookout for new volunteers so, if you work in the pension industry and want to give some of your spare time to helping people with pension problems, please let us know.
Click here for more information about volunteering.
If you have any pension questions, please feel free to contact us by calling our helpline on 0845 601 2923, emailing email@example.com or writing to us at 11 Belgrave Road, London, SW1V 1RB.
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