Sun Life ordered to make up £24k valuation error
Pensions Ombudsman orders Sun Life of Canada to undo a correction which cut a client’s plan in half.
Sun Life Financial of Canada has been ordered to repay almost £24,000 to a client after mistakenly paying a client the annual rate of interest on a monthly basis for 10 years, giving him an incorrect impression of his entitlement on which he based his financial decisions.
In October 2000 the company realised the fund value for the client’s plan was too high due to having applied the annual rate of interest on a monthly basis from 1992 onwards.
The company that month removed the excess, reducing his plan by more than half from £47,420 to £23.459.
In a determination by the Pensions Ombudsman dated 23 July 2012, deputy pensions ombudsman Jane Irvine argued that the client had been relying on the amount he thought he had, although his plan was erroneously more than double what it should have been.
Annual statements from the company incorrectly overstated the guaranteed value of Dr Johnson’s plan, with the client acting “to his detriment” after placing “reasonable reliance” on the statements.
Therefore she determined Sun Life should refill the client’s plan back to the level it was before they corrected their error.
Sun Life will also pay an additional £500 to the client in compensation for distress and inconvenience caused.