Pension providers have dismissed claims of bad customer service presented by PensionBee in its monthly round-up of case studies.
Capita, Phoenix Life and Lloyds Register have rebuffed accusations from the fintech pension provider which names and shames them, and is accusing the company of not providing correct information.
Regarding Phoenix Life, PensionBee said that provider is charging a 36 per cent exit fee for Ms H pension transfer, corresponding to £9,413.
According to a spokesperson at Phoenix Life, a market value adjustment (MVA) is applied to Ms H policy in case of a transfer.
The spokesperson said: “MVAs are not exit charges. We apply a MVA to pay out the true market value of a policy which ensures the remaining policyholders in the fund are not disadvantaged.”
The MVA is applied if there is a shortfall between the rate of actual return on the underlying assets after expenses are deducted, and bonus rates are set, she said.
This adjustment depends on a number of things such as the size of the shortfall and the volume of withdrawals from the fund, she added.
Confronted with the differences in terminology, a PensionBee spokesperson maintained that a market value reduction is an exit fee, as it reduces the value of the pension of the customer should they choose to transfer to another provider.
Due to the high value of the charge, Ms H has not decided yet if she will transfer her Phoenix Life pension to PensionBee.
Another case study presented by the fintech provider involves the Lloyd’s Register Superannuation Fund Association Pension Scheme.
The fund is accused of transferring a member’s pension without his knowledge.
Mr K told PensionBee that his pension was with Lloyd’s Register, who then informed the provider that the pension had been moved to Punter Southall, and after that to Friends Life.
Colin Macnaughton, group pensions manager at Lloyd’s Register, told FTAdviser that Mr K has not had any of his pensions arrangements changed.
He said that the “complaint by PensionBee is completely unfounded”.
According to Mr Macnaughton, Mr K has been a member of the defined contribution (DC) of the scheme since 2014 which has always been administered by Friends Life.
He said: “Friends Life have communicated regularly with all DC section members as and when any issues arise.”
Recently, Lloyd’s changed the administration of its defined benefit (DB) section to Punter Southall, but that had no effect on Mr K’s pension.
When contacted about this case, officials at Lloyd’s said to PensionBee that the pension was moved as part of a bulk transfer, the spokesperson said.
He believes that this was an administration error from Lloyd’s.
Romi Savova, chief executive at PensionBee, said: “This case perfectly illustrates the knock-on effects of pension administration errors and deficiencies. It is no surprise that customers feel disengaged from their pension pots.
“As the quality of pension administration becomes more important in the run-up to the pension dashboard, we encourage all providers to re-examine whether their processes are delivering desired customer outcomes.”
PensionBee also claimed the longest pension transfer in August was with Capita Financial Managers, which took four months to be completed.
The delay was caused by two reasons, according to PensionBee.
Capita required Mr B to complete transfer forms and post them back, and after that it asked for his passport or driving licence, either a certified copy or original, before they release his funds.
However, people familiar with the matter said Capita's position is that the delay was caused by the customer because the signature on the letter of authority provided by the adviser did not match the signature on the provider’s database, which delayed the initial process.
Also, the identification documents submitted were not dated, which made Capita having to chase Mr B several times by telephone and letter. It took over three months for the correct documentation to be supplied.
Ben Smaje, chartered financial planner and managing director at Kennedy Black Wealth Management, said that "if providers are being held to account for the service their providing, then I think this [PensionBee disclosing case studies] is a good thing".
He said: "If there is a threat that they [providers] might be named and shamed, then standards might improve."
Pensionbee has been quick to take aim at more established rivals over what it claims are their poor service.
Last month, the company presented a complaint to life company Aegon about its slow pension transfer processes.
maria.espadinha@ft.com
