A man mis-sold a pension by his Individual Financial Advisor (IFA) went before the UK High Court this week to see if he will have to hand over the value of his Norwich Union windfall payments if he wants to receive compensation.
The man at the centre of the conflict, Mr Taber, was mis-sold a personal pension plan by his IFA in 1990. Needler Financial Services, the IFA which mis-sold the pension, is challenging the current mis-selling review procedures which state that windfall payments made by companies that demutualise are not included when calculating the level of compensation due to policyholders who were ill-advised to opt out of occupational pension schemes.
The case at the High Court is the second time that the Personal Investment Authority (PIA) ombudsman has exercised his discretion to send a pensions test case to the High Court. The other occasion was the case brought by Equitable Life over the proper actuarial treatment of guaranteed annuity rates (GAR).
Taber's case has been taken up by the law firm Norton Rose, which caused the Equitable Life to close to new business when it won a House of Lords ruling on guaranteed annuities. The Norton Rose team representing Taber will be led by Peter Hardy, and assisted by Helen Ashenden, Polly Salter and Angus Duncan. Hardy was also on the team that faced the Equitable Life in court.
The UK government set up the pensions mis-selling review in 1994, following the deluge of cases that emerged in the early 1990s where investors had been mis-sold pensions by IFAs. Those investors had been wrongly advised to provide for their retirement through a personal pension plan, rather than remaining with an occupational pension scheme.
By Geoffrey Ho
This week's edition of Professional Pensions is out now.
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