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Pension Payment Allocations
by Redvers at 13:56 05/07/16 (Letters from Freelancers)
My limited company has been making regular executive pension payments to a reputable pension provider for 27 years. For the first two years only 60% of the payment value was allocated to my plan. During the next 8 years, 100% of the payments were allocated. After the 10 year anniversary the payments are supposed to be allocated at a rate of 105% - making up for the heavy initial charges.

My question is: How can I obtain convincing confirmation that I am actually benefiting from the additional 5%, kindly donated by the pension provider?

I receive annual statements that only give me the start/end values of funds, with the regular monthly payment value multiplied by 12. There is no record of the money actually allocated. I donít think it's possible for me to calculate the allocated amounts from the start/end values due to market fluctuations over the year. You'd have thought that the provider would be keen to remind me of the additional 5% they kindly give me each year.

Iíve written to the provider asking for confirmation of the 105% allocation but they simply quote the policy documentation stating what is supposed to happen: after 10 years the allocation rate will be 105%.

Iíve worked on pension provider computer systems and so I know that there can be a difference between what is supposed to happen and what actually happens. When Iíve raised these issues with management in the past, the attitude is: ďWe can sort that out manually if it becomes an issue.Ē

What I want is some sort of fund unit allocation report, showing me actual purchases of fund units using my contribution amount x 1.05. Do I have any right to insist on this kind of information or are the experts confident that I have nothing to worry about?


Editor's note: Originally submitted as an Ask An Expert, but opened up to the wider freelancer membership for any advice or comment.

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