Hibernian ups its rates after under-charging pension fees
The company insisted that not all pension policyholders will be affected by the move
Tuesday December 09 2008
INVESTMENT company Hibernian has written to a number of its pension customers telling them it mistakenly under-charged them on their investments and will now increase the charges.
But the life company will not be imposing retrospective charges on people who were not charged the proper fund management charge, the Irish Independent has learned.
The move comes as the average pension fund has lost 33pc of its value this year.
It is understood that a number of people who took out pension policies had charges set at 0.75pc when the product literature stated that the annual management charge should be 1pc.
From next February, Hibernian will be imposing the higher charge. A total of 18 funds are affected.
The company insisted that not all pension policyholders will be affected by the move, with only those with certain combinations of pension products and fund choices.
In a statement, the company said: "Hibernian Life has written to a number of its customers to explain that for a number of pension funds on some of our pension products, the fund management charge being taken is lower than was stated in the product information.
"We have written to our customers to confirm that the fund management charge will be corrected with effect from February 1, 2009. Customers will retain any benefit they have received until now as a result of the lower charge."
The life company said it regretted any inconvenience caused to customers and was now writing to those affected.
The Financial Regulator has been advised of the plan to increase the charges on the pension products.
This latest incident comes a month after Hibernian was fined €45,000 by the Financial Regulator and forced to refund €45 each to 350 motor insurance customers.
The firm failed to make it clear to these customers that they did not need to have a number of extra benefits on their motor insurance policies.
The breach happened in May 2007 and Hibernian last night blamed the overcharging on its failure to properly understand its obligations under the regulator's consumer code.
No customer complained directly to the regulator, but Hibernian has contacted customers who could have been affected and made refunds totalling €16,608.
Hibernian's motor policy provides a basic product with the ability to tailor the cover to suit the customer's needs through additional extra cover rather than an all-inclusive product.
It is understood that what should have been extra add-ons were included in the motor cover of the 350 customers, when the customers should have been able to opt out of these add-ons.
- Charlie Weston Personal Finance Editor
