Aegon Section 32 Buy Out Plan · CAS-30344-V3B5

CAS-30344-V3B5

Ombudsman’s Determination Applicant Mr G

Scheme Aegon Section 32 buy-out plan (the Plan)

Respondent Aegon (Scottish Equitable plc) (Aegon)

Outcome

Complaint summary

Background information, including submissions from the parties CAS-30344-V3B5

“Scottish Equitable shall provide the Contract-out Benefits from the Policy proceeds. Reserved Units will be used in the first instance to provide Contracted-out Benefits. However, if the Reserved Units are not sufficient to provide the Contract-out Benefits, then Scottish Equitable shall use the non- Reserved Units…”

Under Part II (10)

“The reserved Units (together with any non-reserved Units) as set out in Condition (B) shall be applied to provide, at least, the Contract-out Benefits as follows.

(a) An annuity for life for the Member payable from State Pension Age equal to Revalued GMP …If the Member retires before State Pension Age, no pension under sub-section (a) shall be payable before State Pension Age unless the Reserved Units are sufficient at the Pension Commencement Date to secure the benefits under section (1)…”

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“If, at retirement, there isn’t enough in the reserved fund to cover the cost of your GMP we’ll use the value of you non-reserved fund to cover the shortfall. If the policy values can’t cover the shortfall, we’ll cover any additional cost to provide your GMP.

Any excess in your policy value, after the cost of the GMP has been calculated can be used to provide additional benefits.”

Adjudicator’s Opinion

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Mr G did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider. Mr G submitted his further comments which do not change the outcome. He said:-

There is no evidence that he agreed the Plan should be set up, so the contract was not legally binding.

Aegon failed to provide him with the current status of the Trustee.

It is questionable that Aegon are “protecting” his funds or administering the Plan properly, as a substantial sum of money was now locked into the Plan.

He wanted evidence to substantiate Aegon’s claims that the Plan continued to experience a shortfall.

He is unhappy that he received an annual statement confirming a “valuation” of just over £55,000, but Aegon then refused to allow him access to the funds, or transfer to another Scheme.

I agree with the Adjudicator’s Opinion and note the additional points raised by Mr G.

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I do not uphold Mr G’s complaint.

Anthony Arter

Pensions Ombudsman 17 September 2020

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