Standard Life has been hit with the huge task of writing to around 35,000 customers in its pension and investment plans to explain about errors in the pricing of some internal funds.
The errors are linked to major system updates, including funds being moved onto a new pricing and administration platform.
Some of the customers affected have been compensated by Standard Life. The majority of customers have been put back into the position they were in before the errors occurred, with most requiring an adjustment of less than £10, with over half requiring an adjustment of £1 or less.
In the case of some other customers, such as those who had already transferred their pension from Standard Life, letters were written informing them the fund paid for their claim was incorrect and they have received cheques in final settlement of their claims.
These payments are considered as an ‘unauthorised payment’ under the Finance Act 2004 and such payments are subject to tax. However, Standard Life says it will deal directly with HMRC and pay any tax that is due. It advises customers “you should not include the unauthorized payment in any self-assessment return or make such a return purely because of this payment”.
Standard Life says nearly all the records for customers affected by these internal fund errors have now been corrected. All funds have now been migrated to the new platform and the prices adjusted accordingly, the insurer adds.
The mail-out was to customers who have received incorrect documentation following a single premium payment, transfers or fund switches.
Standard Life is not the only life company to suffer with computer glitches recently. In April, Norwich Union was forced to suspend 380,000 personal pension transfers following problems migrating to a new computer system.
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