The Telegraph reports that the Prudential is writing to 39,000 customers to tell them it issued incorrect valuations of their pension funds up to seven years ago, and offering them a total of £4M in "correction payments".
The Prudential said most of the affected policyholders would receive payments of less than £100, but 9,000 will get up to £500 while 100 others will be paid £2,000 or more.
Apparently, the mis-pricing errors affected Scottish Amicable unit-linked pension plans between June 2004, and December 2008.
Prudential, according to the Telegraph, assumed that ScotAm did the same but discovered as part of a routine audit that this was not the case.
There are a few questions popping into my head about this eg:
1 Why has a "routine" audit only now discovered an error dating back to 2004-2008?
2 Why is a "routine" audit being carried out on transactions that are several years old?
3 Why did Prudential "assume" that ScotAm followed the same procedures?
4 Did Prudential not perform a due diligence on ScotAm when the business was transferred several years ago?
I suspect that more will come out on this issue, and that the story will not quietly fade away.
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