The latest pension scandal

Thousands of fishermen have suffered thanks to the latest pensions scandal.

Yet another pensions scandal has come to light. This time, it’s fishermen who are losing out.

A pension scheme was established for distant water fishermen (aka trawlermen) in 1961 and anyone who entered the industry from that date onwards was obliged to join the scheme. Fishermen had to contribute sixpence a day to the scheme - 2.5p in ‘new’ money - and carried on making contributions until 1979.

That all sounds fine but there was a big problem. The administrators of the scheme were shockingly lax and didn’t keep proper information about the scheme’s members. The only records kept were their surnames, initials and dates of birth. No addresses and no National Insurance numbers.

As a result, many fishermen who had reached retirement age weren’t getting any payments from the scheme.

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The scheme is now operated by Aviva, and, in fairness, the insurance giant has tried to sort out the mess. It launched the ‘Find the Fisherman’ campaign in 2007 to find members of the scheme but by 2009 it still hadn’t located 6,387 members. That’s slightly more than half of the original members.

Not only has Aviva failed to find many missing members of the scheme, it’s also disputing payment to some of the members who have been found. Aviva argues that some members were paid out in the 80s, but this is disputed by the members themselves. Sadly, without proper records, it’s hard to prove either way. Especially when many of the fishermen didn’t have bank accounts.

In short, it’s a right royal mess. It seems especially unfair when you remember that the life of a trawlerman is both difficult and dangerous.

If you know anyone who worked in the fishing industry in the 60s and 70s, please tell them about this issue as they might be able to get some unclaimed pension cash from the scheme.

Don’t let it happen to you

As for the rest of us, we can take comfort from the fact that the pensions industry is better regulated these days, so hopefully we’ll never see such poor administration in the future. But there’s no harm in taking the time to check that you’ve got proper documentation for any pension or pensions you may have.

If you feel that your pension is not being properly administered, then contact the Pensions Advisory Service and see if it agrees with you. The service could then help you make a complaint if that’s necessary.

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And if you think you may have one or more pensions from previous jobs – but you don’t have any documents – then use the Pension Tracing Service to track down your old pensions.  If you do find a company pension from a previous employer, you may want to transfer it to your current pension.

However, if your old pension is a final salary pension, think carefully before you do this – in fact, it would be best to get advice first.  Final salary pensions are the best kind of pension because the level of payment is guaranteed, so you don’t want to do anything that might jeopardise that entitlement.

The other point to make here is that I fear this story will further reduce confidence in the UK’s pension system. A couple of years ago, I made a lovemoney.com video on pensions and went and asked ordinary folk about their pension arrangements. I was struck by how many people said they weren’t saving for a pension because they had no confidence in the system. They thought their money might be stolen or frittered away thanks to high charges or poor investment decisions.

But the reality is that most people of working age should be saving for their retirement. I personally think that pensions are a good savings vehicle for your old age – especially if your employer is willing to contribute to your pension as well. But if you’d rather save via an ISA or by investing in property, then that’s a much better option than doing nothing at all.

Whatever approach you take, make sure you regularly check your documentation and if something doesn’t seem right, approach the product provider and ask them to explain. Nobody wants to be poorer thanks to an administrative cock-up.

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