Personal Pension Plan Decision Reference 2022-0079

Case OutcomeUpheld
Subject MatterPersonal Pension Plan
Date03 March 2022
Finantial SectorInvestment
Conducts Complained OfFailure to advise on key product/service features,Failure to provide correct information, Maladministration
Decision Ref:
Product / Service:
Personal Pension Plan
Conduct(s) complained of:
Failure to advise on key product/service features
Failure to provide correct information
The complaint concerns a personal pension policy held by the Complainant with the
The Complainant’s Case
In 1994, the Complainant’s policy was taken out with the Provider’s predecessor. The
Complainant says that 20 years later, the policy was taken over by the Provider in 2014.
The Complainant submits that in November 2011, it became necessary to take a premium
holiday in respect of the policy, due to the recession and a drop-off in his business. The
Complainant states that in 2013, he was asked to resume payment of the premium before
he would be permitted to avail of a further premium break. The Complainant contends that
he therefore decided to resume payments of €200 month, to avoid the policy becoming
The Complainant submits that in early 2015, he was advised that after April 2015, he would
no longer be permitted to increase his contributions. As a result, the Complainant decided
to increase his contributions to €300 per month, which he submits was all that he could
afford at that time.
The Complainant says that the Provider then advised that it would allow no more increases
in contributions to the pension fund. He says that he complained to the Provider about the
restriction, as it was contrary to the reasons why the Complainant had taken out the pension
plan in the first place in 1994, which was to allow him flexibility in his contributions because
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he was a sole trader. The Complainant submits that making increased contributions was
allowed for within the original policy provisions agreed and put in place in 1994.
The Complainant says that not being able to increase his contributions will affect him after
his retirement. He submits that it is recommended that a person contribute up to 25% of
their salary, to ensure a reasonable standard of living in retirement and to obtain the
maximum income tax relief available to the individual. At the time when he ma de his
complaint to this Office he submitted that his current contributions stood at approximately
5% or 6% of salary, so they were neither sufficient for his future needs, nor tax efficient.
The Complainant submits that he has not been in a position to avail of the optimum levels
of income tax relief on premiums. He has submitted a table which he says shows the tax
relief that he would have been entitled to, if he had been allowed to contribute at a higher
level. He submits that this demonstrates additional income tax overpaid for the five-year
period in question, at €11,304.
In one table, the Complainant has presented calculations of the estimated shortfall in the
pension plan due to not making increased contributions. He has estimated that between
2015 and 2019, he would have made additional contributions of €32,184. He estimates that
the growth rate in his pension fund of those additional contributions would amount to
€4,877.52 using a simple interest calculation. The table sets out further calculations on the
contributions which he argues would have been made to the fund, and what those
additional contributions would mean for the fund value. The Complainant submits that the
total shortfall in the fund value over the relevant period, amounts to €37,061.52 (on the
assumption that those additional contributions of €32,184 had actually been made).
The Complainant has submitted evidence that the sum of €19,204.04 was put aside by him
to a savings account during the relevant period, representing pension contributions he was
not allowed to make.
The Complainant has also submitted a letter from his accountant dated 16 December 2019
setting out his ability to increase pension contributions during the years 2015 to 2019. The
accountant confirms that additional contributions which could have been made during the
period 2015 to 2019 were in the sum of €26,136, which would have resulted in tax savings
of approximately €10,500.
The Complainant has advised that the Provider has subsequently confirmed that he can
increase his monthly contributions and it will allow one-off single premium payments also.
In response to submissions from the Provider, the Complainant argues that the Provider is
incorrect to say that the operation of clause 3(g) of the policy terms and con ditions (which
provides for top ups) is discretionary. He argues that clause 3(g) is related to clause 4 which
provides for increases in contributions to account for inflation. He argues that the clause
does not permit or justify the actions of capping the contributions, and does not give the
Provider the power to do so.

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