RegulationMay 29 2013

Aon ordered to pay £55k over pension projection error

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ByMichael Trudeau

The Pensions Ombudsman has ordered risk management provider Aon to pay a client £54,850 after they gave him incorrect projections of his pension income upon which he decided to retire.

According to deputy pensions ombudsman Jane Irvine, Aon told complainant Mr D Payne in November 2009 he could take a pension of £9,815 per year and a tax-free sum of £65,437 if he retired at 55.

With this figure in mind, Mr Payne decided to take early retirement and accept voluntary redundancy from where he worked at the Amcor group of companies.

Ms Irvine said: “...he considered that early retirement with a decent pension was too tempting an option for him to ignore.”

However, the Aon illustration had failed to mention that his pension would be reduced by 37 per cent due to a pension sharing order resulting from a previous divorce.

After Mr Payne had begun the process of retiring, Aon revealed his actual pension would be £4,361 annually with a lump sum of £43,724. When Mr Payne complained, the company said the previous illustration had not accounted for the pensions sharing option due to an administrative error.

Mr Payne said: “Aon’s letter did not arrive until 24 June by which time my departure was well documented and with much work and many farewells having already been made.

“At such a late stage to then go back cap-in-hand to the company and say ‘very sorry chaps, but my pension company’s made a bit of a foul up, any chance we can reverse all the announcements, decisions and planning?’ would have been the most unprofessional act I had committed in all my 34 year service and something my pride would not allow.”

Ms Irvine did not require Aon to reimburse Mr Payne’s legal costs.

Aon declined to comment.