how we helped our clients

Here are some case studies that illustrate the best examples of what we have achieved for our clients:

Reallocation of Contributions

The directors of company Y contributed to a pension plan (“the original plan”) on an irregular basis over many years, until the provider (due to a desire to update its products to comply with new legislation) converted the plan to a different plan (“the new plan”).

The first issue was whether the fund transferred to the new plan was big enough. The original plan provided for initial contributions to be allocated to one ‘pool’ and subsequent contributions to another and, as is quite common in these circumstances, the pools had different charging structures, with one of the pools bearing the running expenses. The provider had misallocated the directors’ contributions and excessive charges had been applied. Clarke Willmott successfully compelled the provider to reallocate those contributions.

The second issue was whether the directors should be entitled on retirement to benefit from the guaranteed annuity rates in the original plan. Again, Clarke Willmott were successful in obtaining confirmation of that entitlement for the directors.

Guaranteed annuity rates

The directors of company B had a small self-administered pension scheme (SSAS), the assets of which included a pension policy containing guaranteed annuity rates.
Prudent management of the SSAS required the value of the policy to be realised and invested elsewhere. The provider offered a transfer value which represented only the accumulated fund invested in the policy and failed to recognise the value of the guaranteed annuity rates.
An exchange of letters was sufficient to persuade the provider, in offering transfer terms, to take into account the value of the guaranteed annuity rates and not just the cash value of the accumulated fund. The difference between the two valuation bases, and thus the value which Clarke Willmott added to the directors’ fund, was in excess of £1million.

Funding of a with-profits bond

Family B were successful property developers and had made considerable gains from the sale of some of their investments.

On the advice of a life office representative they made significant investments into a small self-administered pension scheme (SSAS) and individual pension plans. They also invested a significant amount in a with-profits bond.

Some of the money invested in the bond was known to be required within a very short time scale as it was money which had to be reinvested to take advantage of roll over relief from capital gains tax. The life office representative told them that the with-profits bond was as good as cash for their purposes, save that it paid a higher rate of interest. When the time came to withdraw the money the life office imposed a market value adjuster which meant that a significantly smaller sum was available for reinvestment than had originally been invested.

Market value adjusters were similarly imposed on some of the other investments, which in any event had failed to grow satisfactorily. In addition Family B had received advice to make additional contributions into the SSAS, meaning that it was over funded.

Clarke Willmott forced a significant settlement by the life office concerned after protracted legal proceedings.

Winding up a pension scheme

These trustees were responsible for a pension scheme which was in surplus and in the process of being wound up.

They identified that previous trustees had invested significant sums in current accounts which bore no interest – an obvious breach of their duty to invest the funds on a business-like basis. Notwithstanding that the scheme was already in surplus, we advised the trustees that they could recover the loss caused by the previous trustees’ neglect via legal procedings. They were initially advised by Counsel in very cautious terms, but ultimately accepted Clarke Willmott’s advice and, as a result, we were able to add a significant sum of money to the funds for distribution to the scheme members.