Aviva has been ordered to pay a client compensation after the pension provider took too long to correct an error which meant his pension payments were not processed correctly.
A client of Aviva complained to the Financial Ombudsman Service (Fos) after being unable to apply some pension contributions he had made due to a system error.
The client, who the Fos called Mr V, argued that as a result of these problems he was unable to move some of his pension fund to a new provider for a significant period of time and so lost investment returns.
Mr V held a pension plan with Aviva and made ad-hoc contributions to his plan by sending a cheque with a covering letter to the provider.
In May 2017 Mr V made a contribution to his pension plan but due to an issue Aviva failed to process this payment correctly and as a result it failed to apply to his pension.
This failure also meant that further contributions made by Mr V later in May 2017 and in August 2017 were not applied to his account.
Mr V first contacted Aviva about these problems in July 2017.
Aviva identified that the two payments in May had been received but was unable to tell Mr V why they hadn’t been applied to his account.
Mr V contacted the provider again in February 2018 but Aviva was still unable to tell Mr V why the payments hadn’t been applied.
In March 2018 Aviva wrote to Mr V to tell him that it was still unable to resolve the systems issue that was stopping his payments being correctly applied and this problem was still not resolved by April.
In May 2018, Mr V wrote a letter to Aviva complaining that the three payments hadn’t been applied to his pension account. He further complained that the problems had delayed him making a transfer request to move part of his pension fund to another provider and that this delay had caused him to lose a significant amount of investment return.
In July 2018 Aviva explained that it was still unable to understand why its systems problems were preventing the application of the three contributions.
The provider confirmed that it would backdate the contributions so no investment losses would occur but noted that it wouldn’t be able to complete Mr V’s transfer to another provider until the problems had been resolved.
It offered to pay Mr V £400 for the trouble and upset the problems were causing him. Aviva managed to correct the problems three days later.
It sent Mr V a cheque for the £400 compensation it had offered him and sent some forms for Mr V to fill in to start the transfer to another provider.
Mr V returned the forms at the start of August 2018 and the transfer was completed a week later.
However, Mr V didn’t accept Aviva’s offer of compensation.