Pension provider Aviva has admitted that a number of its customers were unable to access their pension policies on its MyAviva system. The delays have prevented some customers from transferring their pensions.
Providers’ ability to administer pensions is being tested, as the number of savers making use of their pension freedoms continues to rise.
In June, the Financial Conduct Authority revealed that 1.5m defined contribution pots were accessed by consumers between April 2015, when pension freedoms were introduced, and September 2017.
What Aviva are suffering from here is the double-edged sword of having a very technology-focused service
Daniel Taylor, Trafalgar House
Aviva currently services 21 per cent of the workplace pensions market, according to its 2017 annual report.
A customer, who wished to remain anonymous, reported being unable to access an £80,000 pot from Aviva after attempting drawdown.
Unfulfilled promises
Under pension freedoms, DC savers over the age of 55 are able to withdraw their pension as a lump sum. They pay no tax on the first 25 per cent of the pot, with the remaining figure taxed at the saver’s rate of income tax.
The affected customer opened an additional voluntary contributions plan with Friends Provident in 1990. Friends Provident, as part of the Friends Life group, was acquired by Aviva in 2015.
The Aviva member had “some very helpful conversations” with the provider in June about drawdown, and attempted the transfer process in August.
But during an August phone conversation with an operator, who sought to guide the customer through the drawdown process, ‘Error 500’ appeared on the member's computer screen.
“At that point, the operative says, ‘We’ve got a glitch in our system at the moment. It’s affecting a number of people. It’ll take two-to-three weeks to resolve’,” the customer recounted.
Aviva promised an email notification once the glitch had been resolved, "but they didn’t ever send the email".
On September 11, the customer tried to access the pension again with an Aviva operator on the phone. The error came up again on screen. They were told, once more, that the problem would be fixed within two-to-three weeks.
When the customer registered a wish to make a complaint, Aviva said its complaint response time stood at eight weeks.
The customer's sister took to Twitter to vent her frustration at Aviva, but "she didn’t get anywhere with it".
Customers unable to get online
An Aviva spokesperson said Error 500 is a general error code which indicates an issue on the provider’s website.
“In this case a number of customers were unable to view the details of their policy via MyAviva,” the spokesperson said. “The issue affecting these customers has been investigated and a fix implemented. Whilst online access was unavailable, if customers wished to view or transact on their policy, they were able do this via our customer contact centres.”
The spokesperson added: “All other products, including our full suite of platform products such as our Pension Portfolio, were unaffected by this issue."
But on Tuesday, Pensions Expert sister title FTAdviser reported that Aviva was unable to provide quotes on its individual personal pensions due to recent software updates.
The Aviva spokesperson confirmed these incidents were unrelated.
Technology playing a bigger role in admin
Aviva and the customer both confirmed the issue has now been resolved.
The provider “instead [is] going to send me an offer today of a workaround in which they can make available the 25 per cent of my pension fund which I wanted as a tax free lump sum”, the customer said.
The customer received email confirmation of this offer on Thursday, and is now able to draw down 25 per cent of the pension.
Daniel Taylor, director at third-party administrator Trafalgar House, said an eight-week period for complaints is standard for the industry.
“What Aviva are suffering from here is the double-edged sword of having a very technology-focused service,” Taylor said.
How can we restore trust in pensions?
Analysis: Savers have long remained detached and bemused by their pension arrangements. Indeed, the success of auto-enrolment has partly depended upon consumer inertia.
The rise of technology in pensions administration is being matched by the slimming down of operations teams, according to Taylor, who said smaller teams can struggle to deal with system failures.
“I imagine that’s probably what Aviva are suffering from at the minute, because they have invested an awful lot in platforms and online solutions,” he said.
“Freedom and choice has made things a lot more complicated… which has in the main been mitigated by the use of technology,” he added.
