When people worked for a single employer for most of their life, finding clients’ pensions was relatively simple. But with more frequent job changes, combined with the introduction of automatic enrolment into workplace pensions, things have now got a lot more difficult.
For longstanding clients, there should be a paper trail and good records of all pensions, but where someone only seeks advice later in life, it can be a challenge to track down their historic plans.
An obvious first port of call is the government’s Pension Tracing Service, but the service offered is more limited than the name suggests. What the (free) government service does is act as a glorified telephone directory, providing contact details for schemes, assuming the user has information about the employer or pension provider.
This is a good start but, even where a match can be found, the information may be dated and can even give contact details for pension administrators or providers who are no longer trading.
A surprisingly fruitful approach is to use the client’s own networks of former colleagues. While the client may not have retained pension paperwork, they may well have a more diligent former colleague who does have contact details. Even if the client is no longer in contact with former colleagues, the wonders of LinkedIn and other social-media platforms can be a surprisingly effective way of tracking down potential members of the same scheme.
Another option is using the Companies House database to find out what happened to the client’s former employer. Very often people tell me they think they have an old pension but that the company they worked for no longer exists.
If the company was taken over, it is possible Companies House records will lead you to the successor firm, which may know about historic pension provision.
Where the former employer has gone out of business, it is possible the Pension Protection Fund (PPF) may have become involved. In the case of a defined benefit scheme, where the sponsoring employer went bust after the PPF was created in 2005, it is worth checking the list of schemes on the PPF website to see if compensation is being paid.
And for some insolvencies before 2005, there is a separate Financial Assistance Scheme (FAS), also administered by the PPF, which may be a source of potential payments.
In some cases, a company goes bust in circumstances where the pension scheme had insufficient assets to pay full benefits but enough assets to do better than PPF compensation levels.
In these cases – known as ‘PPF-plus’ cases – the assets of the scheme will have been used to buy bulk annuities from an insurer, so it may be worth tracing the policy through that route.
Another source of information can be HM Revenue & Customs (HMRC), particularly in the case of contracted-out pensions. If someone was in a contracted-out scheme, HMRC would generally hold a contracted-out scheme reference number which can be used to track down the scheme.
HMRC would also hold information about the name of an employer, which can help to narrow down the search. Information about contracted-out employment can be applied for via the HMRC website, while more detailed personal information can be obtained by means of a ‘subject access request’.
These are just a few of the routes I have used to help track down missing pensions. I’ve learned that every pension hunt needs its own unique strategy, depending on how much information the client holds and what type of pension it was.
In some cases, it turns out there was no pension at all because the client transferred out or cashed out their pensions years ago and has now forgotten. But when the search is successful, it is a great pleasure to reunite a client with a lost pension.
Steve Webb is a partner at consultants LCP and was pensions minister 2010-15
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