No pension joy for a doughty fighter: Funds can be kept for a year after changing provider.

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WHEN Bob Painter was made redundant last year after 14 years of working for the aerospace firm Dowty, he decided to make a clean break and move his accumulated entitlement from Dowty into a new personal pension.

Dowty has been much quicker in supplying his P45 than his pension transfer. He accepted the transfer value offered by his old pension scheme last January, at the same time arranging a personal pension plan to accommodate the money. Six months on, he is still waiting for the cheque to be supplied. Others recently made redundant by Dowty are also experiencing delays.

'I'm planning to set up my own business and want to get all my financial affairs sorted out. It's worrying not to be able to arrange my pension. At the moment, Dowty keep saying, 'Oh it won't be long',' Mr Painter said.

Legally, pension schemes have up to 12 months to pay agreed transfer sums. After the first six months a scheme member is entitled to receive interest (currently 8 per cent) on the amount due. They can also ask for the transfer value to be recalculated, and can then accept the higher of the two figures. Transfer values, which are designed to reflect the amount of money needed immediately to pay future defined benefits, can vary weekly as interest rates move. Generally speaking, when gilts are low, transfer values are high.

According to Don Hall, chief executive of the Occupational Pensions Advisory Service (Opas), anyone who has been waiting for more than six months should complain to their pension scheme. 'You should write in very strong terms to the trustees pointing out when the transfer offer was accepted, pointing out the entitlement to receive interest and demanding that something is done within 14 days.' Failing that, he added, Opas may be able to help.

TI, which took over Dowty last year, admitted that there had been hold-ups for former employees awaiting transfer value payments. However, according to David Lillycrop, the group company secretary, the delays are the result of a decision to ask its actuaries to recalculate all the transfer values to take account of recent interest rate changes.

'The recalculation was designed to ensure that all individuals get the best possible transfer values. The key calculations have now been completed, and it's now a matter of a few days before payments are made,' he said. Most individuals should have increased transfer values.

Pension transfers can be problematic for those in occupational schemes. According to Mr Hall, about a quarter of Opas's case-load concerns issues and difficulties arising from transfers. 'A lot of them are about delays, and a lot about incorrect figures,' he said. He also mentioned how hard it can be for a lay person to understand how the sums are worked out. 'Because there is no laid-down basis for calculating transfer values, you can get very different results in different schemes for people who are in the same situation,' he said. He added that it can also be almost impossible to identify actuarial mistakes. 'There's no means by which an individual can check his or her transfer value.'

The 12-month deadline for the payment of transfer values was established by the Social Security Pensions Act 1975, though pensions specialists say that in most cases payments are made very quickly. However, the Occupational Pensions Board, the government body that oversees occupational schemes, has announced that more than 40 schemes have recently asked for the 12-month limit to be extended. 'The applications cover a wide variety of situations but the majority are related to schemes which are winding up and could find themselves with insufficient assets to discharge their liabilities,' said the OPB. For ex-employees in these schemes, the wait for their money could be much longer.

(Photograph omitted)