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UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 4312
Experience:  English solicitor with over 12 years experience
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,I need to know: Can a Pension Company make a secret

Customer Question

I need to know: Can a Pension Company make a secret profit on your funds held in a deposit Account.
The Bank provide the Pension Company with a Headline/Treasury account which pays a high amount of interest, 2% above base rate on the accumulated fund value of their clients accounts.Then the Pension Company pay a small amount of of interest, 1.875% below base into the separate deposit accounts held in the name of the Pension Company and their Client.
When the funds were deposited into the Bank Account my Lawyer ( who passed away at Xmas) obtained written confirmation of the higher rate from the Pension Companies Broker and the Broker (also my IFA at the time) copied the Letter to the Pension Company who say they received their copy of the Letter at the time the deposit was made but they filed their copy and did nothing about it but say they should of picked it up at the time,but will still only part with the 1.875% figure below base.
Submitted: 3 years ago.
Category: Law
Expert:  UKSolicitorJA replied 3 years ago.
Thank you question.
It all depends on the terms and conditions with this pension company. If you feel that you are being cheated out of the higher rate of interest which the pension company should have passed on to you, you may lodge a formal complaint about this with the Pension Ombudsman .
See here to complaint to the Ombudsman
May I help further?
Customer: replied 3 years ago.


Thank you mail,

I am already putting together a file Pension Ombudsman but need some knowledge on these 2 points.

A) Can they keep the extra interest as their profit credited to the Headline/Treasury Account and keeping this a secret without advising the client who is paying to them yearly investment fees, although we had the higher rate 2.5% over base confirmed by Letter to my solicitor at the time the funds were paid into the Bank by the Pension Companies Broker.

B) The Pension Company admit they had the confirmation rate letter at 2.5% over base sent to them which they filed at the time the funds were paid into the Bank. If this was not the rate to be applied and paid to our account they should of picked it up at that time they received the Letter. I have copies of emails from managers within the Pension Company admitting to each other that they should of picked it up at the time it was received if this was not the rate to be applied and why not. This was the only rate ever quoted from 1994, no other rates were supplied by the Pension Company their Manager said he thought the rate was quoted in the Telegraph News Paper to see if there were any changes to the rate of interest, not true.

I need answers on these points so I can complete my application to the Pension Ombudsman but need to know where I stand first on:

A). Is the Pension Company libel to refund the difference from 1,875% below base to 2.5% above base as the Letter is the only rate ever confirmed ?

B) Are they also libel if they have been keeping a secret profit ? The Bank have advised me verbally that they proved accounts with a 2.5% over base rate in a Headliner/Treasury Account. Also they confirmed verbally that our account numbers held in the Name of the Pension Company and ourselves on the Banks Computer System showed a current rate of 2% over base in 2012/13 but only 1.875% below base had ever been credited, but nothing since 2002.

Thanks JA,

Best regards,


Expert:  UKSolicitorJA replied 3 years ago.
Dear Ray,
This is a contractual matter between you and the pension company.
The simple answer to your question is yes, it may make a secret profit on your funds if it is under no obligation to disclose the profit it made to you.
It would be obliged to do so if there was a contract or agreement with them obliging them to reveal any profit made on your funds to you.
In the absence of such an agreement, there is no obligation to disclose the secret profit to you.
If they keep a secret profit from you and they are obliged to have disclosed it to you, then they would be liable of contract and you may claim appropriate damages from them I.e. The interest rate difference.
Hope this clarifies
Customer: replied 3 years ago.

Thanks JA,

Okay so the Secret Profit is not looking good as an argument to the Pension Ombudsman.

To go to the Pension Ombudsman with a strong claim on the Letter of Confirmation of the interest advised to our solicitor which we made our investment against as safe investors,which all parties had a copy of confirming the interest rate return and in the Letter it also confirmed the Name of the Bank and the total amount of interest including the current base rate.

What would the 1,2 or 3 main points of arguments be I should be emphasising to show there is a claim based on this Letter of Confirmation to the Pension Ombudsman. It is clear that there is a possible claim negligence between the Pension Company and the Pension Companies Broker but how do I make it stick.

I think when the Broker asked interest rate from the Pension Company clients funds someone at the Pension Company gave the Broker their Headline/Treasury Account Rate they had with the Bank by mistake.

I look forward to your advise to make our claim using only the points on the Letter to our Solicitor. Thanks Ray.

Expert:  UKSolicitorJA replied 3 years ago.

I have already addressed your original queriesI think re: secret profit and liability to pay you the interest rate difference.

I am afraid I cannot accurately comment on the main grounds on which you should base your claim without looking at the documentation. This is only a Q&A site, not designed to replace a face to face discussion.

Be that as it may, I would think that your main argument should be centred on the fact that you were led to believe that you would be paid the interest rate of 2.5 plus base and as a result you acted on this belief and were expecting to be paid xxx amount instead of yyy amount.

I do not know enough of the facts to assess whether or not you have a valid claim against your IFA/ the broker.

Hope this helps