Submitted by Cherfleur
SOCIAL JUSTICE NETWORK & CLINICS
CBC Pension Scandal
In the High Court of Judicature – CV 2550 of 2002
In September 2000 CBC paid out the proceeds from a CBC/ICB Group Non-contributory Pension Policy to a named beneficiary. The 2nd Claimant is the rightful heir to the deceased assets. The named Beneficiary, Dawn Abrams-Grazette (defendant), first told the Claimants and their attorney Dr Haynes Blackman that everything belonged to the 2nd Claimant. Upon instructions by Dr Blackman that his Clients would be taking charge of the Estate, the defendant became acrimonious. She claimed she meant everything in the estate.
Pensions are Trusts and are part of a deceased estate under protection. I started from this trajectory. Thus ensued two decades long search and battle to bring these proceeds back to the rightful beneficiary.
The defendant claimed that since the named beneficiary was her it was hers and was for
her only. You can learn a lot from a dummy!
The 1st Claimant would have none of this. Court proceedings were initiated using the Succession Act. Dr Blackman died, the second Attorney became a judge then Rositta Babb died, Carolyne Herbert died. All these attorneys agreed that the second claimant had priority to the beneficiary as per the Family Law and Succession Act.
Between 2002 and 2015 a dozen attorneys were consulted and all reiterated that once a
named beneficiary is noted that is that.
CBC for their part and as Administrator/Trustees of the Group Life Pension Plan did nothing, like claw back or rescind the payment since they had that authority under a non-contributory Pension Plan. It was the CBC’s Plan not the insured/deceased. Instead the then General Manager hid behind a veil claiming the CBC carried out the deceased wishes. Not forgetting it is a non-contributory pension plan. The GM is now Chairman.
Between 2015 and 2018 the claimants retained a new attorney and was told that they had to prove that it was intended for the minor by way of the specifics of the plan. The attorney tried to get information from the CBC regarding the terms of the Plan. Though information about the kind of Plan and when it was effected was provided CBC refused to give any information regarding the operation of the said plan and who intrinsically is entitled to claimor benefit from it.
At a deadlock the 1st Claimant suggested that if the attorney could not by authority get CBC to hand over the information she would take over the case and so the attorney pulled out. This signalled apparent blood dripping and the defendant’s attorney jumped at the opportunity to strike out on the grounds of an abuse of process but the 1st Claimant argued differently. The matter was adjourned to March 2019 for submissions from both parties. The 1st claimant took charge and reread all the information received for CBC and ICB’s Members’ Handbook and proceeded. Listed in the information was the fact that the policy was effected in 1996 (the year before the new Insurance Law which states a named beneficiary is final)
A visit to ICB met with more stalling because the Letters of Administration had expired. They too refused to cooperate. However the Members’ handbook had clearly stated that benefits were for dependants only. It also stated that the Master Plan for this Policy was lodged with the Inland Revenue Department (IRD) which was originally the statutory body handling Pensions and Insurance.
Submissions were filed within the deadlines but the matter (because the claimants were
self represented) were being adjourned and adjourned until red-phone calls began to fly.
During all that time the Claimant visited four locations of the IRS now BRA only to be told
Pensions and Insurances are being handled by the Financial Services Commission (FSC).
In October 27 2019 the parties met before court for pleadings. The Judge was unwilling to
hear from the ‘unrepresented’ party. However pleadings proceeded and the matter was adjourned to January 27 for a Decision and Claimants to seek counsel. There was no need
for counsel since all submissions were already filed. The adjournments were working in the Claimants’ favour.
A visit to FSC and discussions and explorations revealed that the two instruments are very different. In the words of the Officer: Pension is not Insurance. Dumbfounded the Claimant asked to clarify that statement and was told each has its own legislation. Armed with this new information the Claimant filed further submissions to include this detail as well as new independent submissions for the second claimant reinforcing the right to maintenance and priority…
On January 27 there was no decision forthcoming. New pleadings erupted about the further submissions and the erroneous defence of using the Insurance Act to defend a Pension Plan.
The matter was again adjourned to April 1st for decision. There was a national lockdown
from March so nothing came of that, although some sectors were functioning virtually,
including the Judiciary. The courts resumed operations since May 18th but no decision yet forthcoming.
From May to now is four months where decisions are due within three months.
From January 27 to now is eight months.
Barbados is a twilight Zone.
Even the Judiciary where justice is sought is of questionable behaviour. Its rank of incompetence and other odiousness. It is no wonder the cases are backed up. Judges playing the A********* all the time. Clogging up the system with cases that need only be heard once and discharged but rather adjourning and adjourning and
adjourning. Its a scam.
As long as it takes, a decision one way or another has to be made. It cannot be made in favour of a defence on the Insurance Act.
- The 2nd Claimant has priority as per the Succession Act
- The Pensions Act and ICB Handbook and Master Plan dictates benefits for
dependants only. The 2nd Claimant is the sole issue and dependent of the deceased.
Me, just me and my statistician and secretarial skills was able to unravel a rather
straightforward case in effect. No mystery no intrigue. Just common sense.
Twenty RH years. Paying attorneys that were spewing more RH. I could have decided to defend this case since 2002 and be over and done with it. But nothing happens before its
time.
The claim before the courts is for:
- Return of the Policy proceeds and interest and multiplier (% devaluation of each $1)
- Damages for duress and opportunity cost
- Devastavit of estate
- Disgorgement (seizure of all gains made from the proceeds).
I do not know how attorneys are learning or how they are serving clients but they are just not impactful and or knowledgeable in uncommon areas of the law. One attorney, number 13, with a PhD was adamant that I didn’t stand a chance because there is a named beneficiary. None of them noticed (or perhaps they were representing the defendant or protecting CBC), that the particular policy went into effect before the amendment to the Insurance Act (1997).
My advice to employees of CBC is that they check and update their beneficiaries to their Pension Plan regularly to ensure that who they want to have it gets it. Do not depend on the Administrators of the Plan. It is either they do not know or understand their responsibility or the operation of the Plan or it was a grave duck up.
Secondly, mothers who have children with workers at CBC and are eligible for Pensions (10years service) should ensure that the beneficiary form is completed properly and where necessary an added notation (on the Form) expressing who the proceeds are for where there is a named beneficiary other than the children.
All is well that ends well.
Pensions can be mis-sold. Who is the pensions regulator in Barbados?
So who gets the money?
The estranged widow, formerly the long term wife, who was also the named beneficiary?
Or the minor child?
This is one for the Biblical Solomon
@cherfleur
I do understand you. However, I am only concerned with how pension plan administrators (CBC/ICB in this case) executed their role as trustee and properly managed the pension plan as it relates to complying with the terms of the pension plan’s contract and applicable laws. If there are any failures or contract breaches, the trustees should hold the stick since they are the ones in charge of the funds.
I also understand you in that at least in this case CBC has the final decision to override or not override the deceased’s beneficiary choice. However, this determination should not be made after the employee’s death but should always be made when the beneficiary change form is submitted where they review and approve or reject the requested beneficiary change there and then. Once that beneficiary change is approved, that should be final.
Whether the defendant initially said they wanted nothing is immaterial unless the defendant signed something rejecting their claim and reverting it back to the estate.
@ Curley 16 CBC is or was part of the SCPP.
What is SCPP? The ICB Hand book refers to SCPF. The Handbook states that ICB is the Administrator. my mistake.
Occupational Pensions Benefits Cap 350B 23: “The Administrator of a pension plan shall make available for inspection, without charge, the prescribed documents and information in respect of the pension plan and the related pension fund on the written request of:….”
But you cannot get any information from ICB. They say they have no relationship with 3rd parties (employees and beneficiaries) only the Administrator/Owner of the Scheme and always direct you back to that entity. That is CBC
So ICB doesn’t know its statutory role and CBC refuses to give information that would incriminate them in gross negligence or worse.
Statutory Boards Pensions CAP 384 identifies Administrator as
Would people who are not experts in Trusts, Insurance or Pensions stop advising and stating that Pension is Insurance?
PENSIONS ANR NOT INSURANCE.
Google pensions v insurance. There is no excuse for ignorance in these days of information technology.
Each is governed by a separate Act.
They all just keep going alrededor y alrededor in circles…and left to continue will do so for another 50 years.
@Cudher Bajan who gets the funds, estranged wife or child lol
When you assume you make an ……..!
There are no wives in this instance.
The named beneficiary is an adult relative, far down the line of succession.
So you can answer the other part of your query yourself.
David August 16, 2020 7:17 AM
“@ Cherfleur
Can you share CBC Pension plan hand book, specifically…?
What does it say specifically about registering, removing and updating beneficiaries?
What does it say who are eligible?”
Critical Analyzer August 16, 2020 5:17 PM
“@cherfleur
I am only concerned with how pension plan administrators (CBC/ICB in this case) executed their role as trustee and properly managed the pension plan as it relates to complying with the terms of the pension plan’s contract and applicable laws.”
David & Critical Analyzer,
You are both on the right track.
No intelligent discussion can take place about an issue related to the administration of a pension plan if you do not have a copy of that “pension plan’s contract”. The contract must be amended and upgraded from time to time to comply with all applicable laws and regulations.
More Drama
ICB is Administrator as per their Handbook
@ Curley16 CBC is trustee
Pensions Trustees are entities that are mandated to hold and manage the Portfolio of funds such as Banks, Insurance Companies etc. (separate from the employers’ assets. ICB was that institution and was charged with the daily operation of the funds. This much I do know.
https://www.thepensionsregulator.gov.uk/en/document-library/regulatory-guidance/trustee-guidance
CBC advised the Trustee ICB as to who died, when and what his estate was entitled to, and who to make the payment to.
However, the specifics in this discussion and the focus is on the court case and the various intrigue at play between CBC ICB. the defendant and the legal fraternity.
There are individual trustees and corporate trustees. What we need is a radical overhaul of the pensions system – occupational, private and the state pensions. The whole system is a mess.
More Drama
ICB is Administrator as per their Handbook
@ Curley16 *CBC
Pensions Trustees are entities that are mandated to hold and manage the Portfolio of funds such as Banks, Insurance Companies etc. (separate from the employers’ assets. ICB was that institution and was charged with the daily operation of the funds. This much I do know.
https://www.thepensionsregulator.gov.uk/en/document-library/regulatory-guidance/trustee-guidance
CBC advised the Trustee ICB as to who died, when and what his estate was entitled to, and who to make the payment to.
However, the specifics in this discussion and the focus is on the court case and the various intrigue at play between CBC ICB. the defendant and the legal fraternity.
@ Walter no intelligent discussion can take place about this pension plan without the ….
LOL
This article about the case before the court but I see persons took a position and ran down with it using insurance law and what they know. Hal Austin, perhaps works with Pensions and thus has offered all the salient and factual points as are in the Claim.
What CBC or the government do from hereon with their pensions has no bearing on this case. The particular Policy was signed into effect in 1996 and proceeds disbursed in 2000. The common denominator in any Pension, whether private, statutory or government/public is that it is intended for dependents.
You can try getting a copy of the Contract from CBC as my goodly attorney tried and failed.
The Claimants have all the facts that they needed to file the claim.
The matter is before a Judge for decision a long time now.
What we have are public servants (at that time) managing by default at agencies. What happens when an anomaly occurs, they do not know what to do. They do nothing or they pander to less bothersome or one of less resistance. There has never been a challenge to Pensions in Barbados (apparently) that’s why everyone, including a dozen attorneys, was running with the Insurance Law.
CBC instructed ICB to pay out the proceeds to the named beneficiary. No error there.
However, Dr Haynes Blackman had written CBC in June and the 2nd attorney in late July advising of the minor child/Claimant’s existence. What happened to the two letters? Where did they go that the then GM intelligently stated that CBC was not aware of the existence of the child because the employee never told them such? Screen of voile
@Hal Austin * system wants overhauling; whole system is a mess*
Hal, my intention was to bring attention to the court case, errors and the judiciary, but I myself am now realizing what a can of worms this is, now that I am reading and attempting to satisfy the readers’ queries.
I know that you too have realized some very major issues….discrepancies,….
Its sickening.
Cross-reference it to BCC, it was the same damn thing and all the managers were going on as per usual with their head up their arses and adamant that they were doing it for 40 years therefore it is correct.
I so shame.
@ Walter Blackman * David August 16, 2020 7:17 AM
“@ Cherfleur
Can you share CBC Pension plan hand book, specifically…?
What does it say specifically about registering, removing and updating beneficiaries?
What does it say who are eligible?”
Remember this was signed into effect at a time when ICb was government-owned. It is the Statutory Boards Pensions Act that governed its implementation and operations.
#1 Do you mean as in scan it? It’s a lot to type.
Interestingly, ICB’s current attorneys (perhaps CBC’s HR too) have never seen this piece of literature. :O
Many of these people have a weird notion about the very Pensions they are appointed to manage and supervise. Again see Hal Austin’s commentaries on the supervision and administration of Pensions, public or private, contributory and non-contributory and even on trusts.
#2 employee has to be appointed, has to have 10 years of full-time service. Removing is done simply by signing a new form at HR.
#3 eligible for what? Membership of benefits? Pensions are essentially for retired employees. In the event of a death in service (before retirement), then dependants (wife, common-law/partner and children) are eligible for benefits.
Walter this line of questioning is opening other items I do not really want to get into at this time or at this forum.
ICB is already in the news with the donville Inniss matter.
Cherfleur,
Before anyone can open their mouth and make a pronouncement on how much of a pension benefit was accrued by the participant, and who should receive what if the participant dies before or after retirement, the contract governing the pension plan must be referenced.
If there is a dispute, and the case is brought before a judge, the judge should be the first person to tell you that the contract governing the pension plan must be referenced.
I can try as hard as I would like to, but I cannot make the point simpler or clearer.
@ Walter Blackman,
Who opened their mouth and make a pronouncement on how much of a pension benefit was accrued? The Claimants are not interested in that.
Who is questioning who should receive what….? The Claimants understand that there is a named beneficiary.
Perhaps you are an attorney but I nor the Claimants were seeking legal advice at this forum. The matter is duly filed and pleaded and awaiting a decision.
Many attorneys did not understand the difference between Pension and Insurance and I can still here persons arguing that Pension is Insurance, even though Hal has gone to great lengths to explain different and the FSC too has advised and directed to this effect.
The Family Law Act takes precedence above all other Acts so I do not care what the others say or what your thoughts and pronouncement are.
Try as I might I cannot make it clearer to you that the Claimants have all the relevant details and the matter has gone for decision. You do not have the Contract; that’s a pity. I am not here to adjudicate this matter I am simply sharing the experience with the public and advising employees to know their rights and interests and pursue it.
I thank you for your contribution.
What was amazing at the beginning of the proceedings,is that the Claimants were warned that they wouldn’t get dates and hearings. To date, the matters are all duly pleaded and awaiting decisions (one way or another) but attorneys are still lined up waiting for dates for their cases. I just do not understand what goes on in the judicial system.
But again, although I have no great love for attorneys, I can vouch that they are not the reason clients are languishing for months for dates to have their cases pleaded..
I’d be damned to invest so much money in training and pay for my license each year then suffer such disrespect and frustration at the hands of a failed system.
If the matter is deposited in this public space commenters will want to discuss the issue from all angles. Confining the discussion to the case is one angle.
You don’t know what you do not know.
This is what makes the difference between one attorney and another. The difference between success and failure
@ cherfleur
You does get huffy puffy too quick,
All Walter Blackman trying to tell you is that a judge, lawyer, claimant or anybody else have to refer to the pension plan contract before anybody could determine anything. What wrong with that?
But here is the thing, Walter Blackman is NOT a lawyer, he is an ACTUARY……….you know what that is? Actuaries does deal with pensions, so he going to give you expert explanations bout pensions and insurance. But you being rude and dismissing him and prefer to listen to Hal Austin, who is just a man that uses to write newspaper columns.
This here remind me bout what he tell you a few days ago. That you should seek professional advice from a financial planner, not a newspaper columnist.
Robert,
You understand.
Thanks for reinforcing what I consider to be a basic, preliminary point.
I have mostly avoided commenting on the case itself and focused mostly on the initial beneficiary selection process triggering the whole case as that is more relevant to us as employees with pension plans whether company, NIS or otherwise.
With regards to the case, it should have been brought against CBC since they were the ones that decided rightly or wrongly who to pay. It was not the defendant’s fault the cheque was issued to them and I don’t see the defendant being asked to pay back any money.
The claims being put forward also come across to me like the claimants are very angry the defendant that got the money initially agreed and later decided not to pay it over to the deceased estate. From the time they received the cheque in their name, it was the defendant’s money to do with as they pleased.
Frankly, I think the parties involved should just have let bygones be bygones and let the money go and move on as I don’t know the sum of money involved but it can’t be a large sum of money worth all this hassle so whatever the final decision is, the only people smiling will be the lawyers from all money they made in fees.
I remember a similar situation in my family where a distant relative got the property and the deceased’s siblings felt aggrieved and wanted to sue but another family member told them it was not worth it, let it go and move it, you will just be putting money in the lawyer hands and stress themselves in the process.
Moral of this whole case is, we have to know when to let things go, move on and learn how to manage our affairs better.
@ Robert you get huffy puffy too quick 🙂
Not really Sir.
Walter, is assuming a lot of things. Read carefully it should be noted that the matter is before the courts and waiting for a decision. It is kinda late for Walter’s dictum, won’t you say?
Walter is asking the people on BU to know the contract terms before spouting their mouths, which I thought was the rude interplay. Except ffor Hal who tried to explain by giving a practical example most people were simply trying to grasp all the intrigues and relevant information such as how to register and update the Beneficiary Form. Walter is assuming that the Judge doesn’t have what is needed and or that the judge hasn’t said what he thinks he should have said. Here again, Walter doesn’t know how litigation works. Judges have to take every claim as true and using the submissions which include all the Acts and Authorities weigh them and arrive at a just decision.
I studied Finance which included a component on Trusts. Pensions are revocable Trusts. It is why I started from that point and directed rather than accepted attorneys’ narrow views on this case.
I take your point of the Acturarian v Newspaperman. 🙂
Again I am not here to adjudicate the Claim. What Hal presented on Pensions are all included in Submissions and case studies. That is why I can say he has a better grasp of what obtains.
It is a very dangerous habit for persons, layman or other, to fall into the trap thinking that because someone is employed in a particular capacity or has a PhD, they know it all. Knowing about Pensions and Insurance is not knowing about the specifics about this here case. It might be instructive to Walter to visit legal websites and acquaint himself with the multitude of lawsuits regarding Pensions (and Insurances) and the power of minors and spouses (the Family Law). Please google The Pensions Authority.ie (since there is no such forum in the 3rd world to advise us on rights, operations and procedures).
Employee Pensions are not operated as ‘islands”. The are ILO instructive.
I am daunted that it has gone down the road of squabbling although to a lesser extend. For the most part, comments were exploratory and engaging, and informative. A great deal jumped out at me that I hadn’t realized before. It is intended that others be better informed.
I could have come on and simply give an alert to parents to know what their children are entitled to (at any firm) and that they update their Beneficiary Forms appropriately. But what sense or impact would that have? I could see BU commenting and asking me to clarify or give more specifics. 🙂
Again you are focusing on this policy and the value of the proceeds rather than the operation/management of the Scheme. This incident is gone; a done deed. That was not why I shared the case. But to highlight the various discrepancies originating at CBC and the attempts to derail the claimant/s investigations (why) and the ICB lack of professional ethics and skulduggery. we are not going to give you anything that can incriminate us. :O
Again, courts are not interested in petty grievances, but facts supported by a Law/Act No Act, no grounds, no Claim.
Let me ask you and those who think it shouldn’t be. Were it a house, that was left for a child but by some mishap, it fell out of the bag. What would you do?
I trust that the post was instructive and informative to persons/parents (with dependents and minors) who are employed in organizations that manage Pension Schemes.
As Walter stated the is an issue that ventures into the complicated. It is not a binary matter to solve.
Cherfleur August 16 ,2020
The old heads called it SCPP sorry . Statutory Corporation Pensions Fund SCPF with more corporations and companies joining thereafter. Trustees were determined by the participants consisting of Hr. Manager,Corporate Secretary, GM , Union rep or someone appointed by the general body and two personages from the Corporation (ICB) notably the Manager & FC if memory serves. The devil is in the detail,reasons for the request of the member’s handbook or a copy of the trust deeds and rules. There were very few of us trained in the discipline,in fact two British solicitors Iain Pope and Norman Freathy were instrumental in the setup. Colin Williams was knowledgeable not recalling any other locally. Public servants who were seconded or transferred, pensions were integrated another spin 1974 and 1981. Only a chosen few are entitled to eat a food in these disciplines.
@ Cherfleur
I am not clear about the professional advice given tot he claimants. It appears as if they received incorrect or conflicting advice from the lawyers.
I suggest you have a look at taking acting against the professionals’ indemnity insurers, and if they do not have any, their estate. That may be an easier case to prove.
@ Hal Austin I am not clear about the professional advice given tot he claimants. It appears as if they received incorrect or conflicting advice from the lawyers.
I suggest you have a look at taking acting against the professionals’ indemnity insurers, and if they do not have any, their estate. That may be an easier case to prove.
Pensions are Trusts.
https://www.fidelity.com/life-events/estate-planning/trusts
Employee Pensions have 2 levels of Trustees. The one that is managing the funds for the Firm and the one that is named in the event of the employee’s death (before retirement).
Remember Pensions are for the employee, first and foremost.
Congratulations to a former colleague for her new appointment as Canada’s new finance minister. She came from an organisation with an outstanding record.
@ BU As Walter stated the is an issue that ventures into the complicated. It is not a binary matter to solve.
yes David. Some shocking things coming out of this blog and from the investigations into what happened.
One party in this blog adamantly stated that PENSIONS IS INSURANCE help me with who that was. its important.
All the attorneys I consulted were of the view that the Pensions and Insurance were governed by the same law.
Many persons managing in Financial Services too (unless dealing with Pensions) aren’t aware that Pensions has its own Act.
But these people are employed to serve employees in this industry. Point in case, one Officer at an agency has a BSc in Sociology but is managing a financial instrument. I am not saying a Sociologist can’t be a Minister of Agriculture of AG. Training
This case is one for the Crown because (apparently) never before has a Pension Plan been challenged. Always (it seems) the Named Beneficiary is the spouse who would share with the children or perhaps an employee’s parent who then shares with the known children.
No spouse, a named Beneficiary (who has no priority) and CBC was out to sea.
But CBC did not do criminally wrong. Pensions are Trusts so an employee too can name a person and Trust them to manage the proceeds for his/her final benificiary.
@ BU As far as this blogmaster is aware companies usually setup a committee of trustees comprised of employees to ensure the pension rules are being adhered to and efficiently communicated to employees.
The Handbook speaks of that and I am sure that is being done.
However, I do not know what is the process for paying out upon death in service. If someone or those Trustees vet the Named Beneficiary to verify they are “a dependant”.
For all practical purposes the management of the business through the HR dep[artment should ensure pension forms submitted comply with the rules of the plan supported by the administrator?
@ Critical Analyser I also understand you in that at least in this case CBC has the final decision to override or not override the deceased’s beneficiary choice. However, this determination should not be made after the employee’s death but should always be made when the beneficiary change form is submitted where they review and approve or reject the requested beneficiary change there and then. Once that beneficiary change is approved, that should be final.
We will have to suggest that to CBC et al. Of course, we do not know what transpired between CBC and the employee at the time the form was changed. CBC remains uncooperative.
Whether the defendant initially said they wanted nothing is immaterial unless the defendant signed something rejecting their claim and reverting it back to the estate.
The defendant never said they didn’t want anything. They said it was all for the minor. Of course, it is material. Pensions are Revocable Trusts. They form part of a deceased estate. Figure Donald Trump wants to pinch the government and put all he owns in a trust to avoid taxes, then later go behind and use it to build a golf course. If everyone was to do that the govt. would go broke. Therefore, assets placed into Trusts are governed by one or other Trust Law.
The countless attorneys I sought advice from didn’t know that. They were advising that the named beneficiary (Form) takes it out of the estate.
@ Cherfleur
Pensions are not for employees, but for members of the scheme. There are active members of a scheme and deferred, or former, members.
Also, there are two types of trustees – corporate and individual. Individual trustees should be trained. Corporate trustees have a wider remit.
The Certificate in Pension Trusteeship will give those people wishing to become Professional Trustees the necessary qualification to prove their knowledge, and their application of this knowledge, in their role as a Professional Trustee. ..(Quote)
The above course can be done online.
@ Donna Cherfleur is correct. There is rudimentary knowledge on everything. Not enough work to be able to specialise. My attorneys told me plenty of stuff that made no sense to me and I INSISTED they research it. Turns out I was right. The junior attorney said she would like to arrange a seminar to inform other attorneys. But Johnny Cheltingham knew and put a certain Depeiza who was acting on behalf of ICB in her place about the same argument years before. I found that out from talking to a lady who had the same problem. She confirmed what I was thinking.
Some of these attorneys just don’t know.
It is so shocking. I had to do the same thing and I had this young attorney repeatedly telling me that I was not an attorney. Therefore only he knew. But I knew about Trusts. Then I researched Pensions.
The problem begins at Cave Hill. Students are trained to pass exams. If you throw a curveball at many of these junior attorneys they wouldn’t know what to do. But they are arrogant as butt.
These people don’t want to know how to do anything correctly. As Hal pointed out he invited a UK Solicitor to give a Workshop for Attorney and a known QC rejected it. Why?
So we have some attorneys who don’t know but are taking cases and HR Managers and 1st Trustees who are perhaps not following the rules to the letter T and Administrators who are uninformed of all the laws/Acts that affect the instruments they are managing and minors and perhaps some spouses being denied benefits
@ Crytical Analyser Once a beneficiary is named on any policy, that is it unless they have evidence of some type of fraud or criminal activity. All lawyers should have said so, charged the claimant for their advice and refused to file the case.
This is not any policy.
This is a Statutory Corporation Pension Scheme. It is a revocable Trust.
It is governed by the Statutory Board Pensions Act.
@ Hal Were the trustees trained? Incompetence can often look like corruption, especially in Barbados where every Tom, Dick and Harriette has a paper qualification.
Going to Cave Hill and then t he Wooding does not mean you are knowledgeable about the law. Being brief by some poor sod and then getting up in a court in your robe .
Our problem is incompetence, not corruption. You will always get the Donvilles, but it is very difficult for Barbadians to admit they do not know what they do not know.
I would have to assume that some form of training was undertaken. My comment about corruption wasn’t leveled specifically at the Managers and Trustees but all the parties encountered along the journey up to and including the management and assigning of cases.
https://www.u4.no/topics/anti-corruption-basics/basics
@Curley 16 You are correct Pensions is not insurance. This is a matter that the Supervisor of Pensions can and should adjudicate, there should be a competent resource within the Commission to do such.
this case opened a can of worms. I didn’t know what I did not know but was determined to find out. So all these agencies are now on the defense.
@ BU, Donna, Curley 16, HAl
The provision of a pension is the mechanism used to offer an individual financial protection against the risk of living a life that turns out to be too long. The financial protection comes mainly in the form of an annuity.
The annuity and the lump sum death benefit are related, mathematically.
In a nutshell, this is the reasoning that would lead me to disagree with you and argue that “pensions” are indeed insurance.
Here lies Barbados’ problem. Persons educated and working id these financial services institutions clearly DON’T KNOW WHAT THEY DO NOT KNOW.
I learned that the author is an Auctuarian. He is eloquent in articulating on Annuities etc and competent in calculating mathematically, outcomes and futures….aka Annuities.
His REASONING rather than the fact compels him to state categorically that “pensions are insurance” in the face of all the Laws that states differently and the FSC who is the Body Supervising all financial instruments. I hope he is not at ICB.
i have great respect for people’s time studying and their expertise but sometimes, just sometimes, some matters are more than just one tentacle. Yes, because pensions are a fund that money is contributed to over a period of time to benefit an employee in the future (retirement) they are computed using Annuity calculations just as for Insurance. Does that make them Insurances? Categorically NO. Insurances are not set up as Trusts, Pensions are.
There is the Pensions Act, The Trust Act, the Family Law Act: maintenance AND the Succession Act.
A few attorneys were au fait with the application of the Family Law Act (all parts) as it applies to this case and grounds for bringing a claim. But recognizing the aspect that this Policy was a Pension Plan, a Trust and that Pensions had its own Act was a novelty unless they knew and was playing the ass. But I seriously doubt.
That is why the claimant was forced to take back the case and proceed with it.
So
@ Donna Can the named beneficiary be a minor child though? I don’t think so. I named my mother as beneficiary until my son turns eighteen. I can trust her to do the right thing.
That’s the problem. Why that individual was named as beneficiary.
What would the process be if one hsd nobody whom one could trust? Good question.
Barbados has a Custodian and Trustee Office (which I found out during all of this) but it only administers estates for deceased if on;y of a small amount. Highly paid, highly educated personnel and nought.
@ Greene
Thank you Sir.
Half teh comments about cash cow and lawyers getting fat and Claimants this and that are all because commentators missed the salient point(s).
I understudied the likes of Buffett and Bloomberg and you know who (infamous) et al and Shridath Ramphal, Lionel Luckoo, F Lee Bailey and Johnnie Cochran 🙂
And feasted on Hardy Boys and Nancy Drew then Agatha Christie and Sherlock Holmes. 🙂
Motto: No stones left unturned.
If there is a question there must be an answer.
If there is a missing link, chink or piece, it must be found.
@ Hal I reported on the Maxwell Scandal (the bouncing Czech) as a news event – tracking his time minute by minute to the time he went missing from the yacht. I also reported on it as a long-running pensions case. He once gave me a T-shirt when he was the Aids campaigner.
Good for you. I have great respect for Journalists, having worked at a national Newspapers, and Investigative Journalism. I noticed someone trying to diss you as a Column writer v the Auctuarian.
Many mysteries are solved by journalists snooping for a great story then leading the cops to the culprit.
Be careful. Journalists are an endangered species nowadays. 🙂
@ Critical Analyser The claims being put forward also come across to me like the claimants are very angry the defendant that got the money initially agreed and later decided not to pay it over to the deceased estate. From the time they received the cheque in their name, it was the defendant’s money to do with as they pleased.
Not so Jose`
The minor’s father (the deceased) always said EVERYTHING HE OWNS IS FOR HER. I always knew that. She said everything but she did not itemize wht.
The defendant said what she had to say to Dr Blackman when he approached her the first time. whether she had said that or not. I was on the case as Sherlock Holmes, for everything that he owned. The 2nd attorney got that specific information from CBC.
For fear you and others might ask; I was residing out of the country he time at tof death just before.
@CuhDear Bajan.
you do amuse me often. I can be self-righteous and say do not get involved with men who have wives they are still married to
But I won’t. Some men don’t tell women they are married.
You would have read that I advised that parents who have children with employees at CBC, Statutory Corporations, and now other private firms must approach HR and inform them of their child/ren’s existence.
I a situation where there is an estranged spouse ask the employee to get him/her to waive their rights to her % or have him include the child with the spouse (if its an open relationship) so the 1 child/2 children max (as per CBC/ICB Scheme gets his/her %
Specifics apply to each individual Contract.
@ BU anything placed in this public space….
Respect.
sometimes we (outside the legal fraternity) speak loosely and get scratched.
I was reacting to some of the questions coming my way because I am not privy to the internal workings of the CBC or ICB or many of the institutions related..
Even though I said thise case I meant the body of information and knowledge and questions that arose from the time of the first contact with CBC to filing. Discoveries. How CBC and ICB et al operate and manage I am only getting a “glimpse” I am now more bewildered.
Thanks to this blog and this conversation and contributors I know were are in great danger.
There are so man more questions than answers to this particular Scheme.
@ CuhDear Bajan
correction: 2 or more children (as per CBC)
Time out.
That must be one of her best…
I heard a voice from a next room asking “Who dah”
Gazerts family stamp of approval.
Hants,
Cherfleur seems to be a driven person with boundless energy. Makes me tired just thinking about her exploits.
I must be getting old. My brain needs a timeout too.
@ TheOGazerts,
I have been a Glennis fan for more than 3 years and posted some of her videos in the Diaspora corner.
The Ladies of Soul are awesome. Check You Tube if you are interested.
Interestingly I did a little research and learned about slavery in the Dutch colonies but my main interest is the music as it inspires me to take up the Axe and play lead and rythym.
Attending a Ladies of Soul concert in Amsterdam is one of two items on my bucket list after Covid lol.
@ Cherfleur
I re-enter this discussion to offer some clarity, as the blog is getting clogged with the usual verbal stone throwing and heckling, but little education.
Remember, there are three types of pensions, the three tiers: State pensions, occupational pensions, and private pensions. State pensions are funded through national insurance contributions; occupational pensions through contributions from members (if contributory), employers and the tax man; and private pensions are simply private investments.
The state manages the state pension fund through an agent, mainly the NIS in Barbados; occupational funds are managed by the pension funds, one of the big investors in any liberal democracy; and private pensions through insurance companies.
Remember, a pension is legally deferred pay, not a benefit. The member has earned that money. Pension scheme assets must be separated from those of the employer and managed differently, by member nominated trustees (different to corporate trustees), who have a fiduciary duty to members to provide benefits and, crucially, to act in good faith.
The promise by the employer to make contributions is a contractual one, employers also have a duty of good faith. Scheme actuaries responsibilities are restricted to calculating the final salary; the life expectancy of the member; predicting the rate of inflation; dependents’ liabilities such as life expectancy; and, in some instances, predicting investment performance.
I will mention briefly investments. Pensions funds are invested for two purposes: income and growth. The intention behind scheme investments is to meet obligations. But avoiding a hazard is more important than growth, that is why regulators are very strict in the vehicles that an insurance company or pension fund can invest in, including minimum risk taking.
You mentioned Robert Maxwell. After that scandal, the UK introduced the 1993 Pension Schemes Act and the 1995 Pensions Act, to close the gaps exposed by Maxwell. Most provisions came in to force in 1997, and they included such new provisions as transitional priority order, minimum funding requirement, limited price indexation, and, most importantly, the abolition of the Rule 75 requirement, which stipulated that at age 75 all pensioners (I dislike the American word retirees) had to buy an annuity. The Act also created the position of pensions regulator.
What may be of interest to you, is that Sec 67 of the 1995 Act prevents employers from making changes to pension schemes which might diminish members’ rights.
I also want to disabuse you of the idea that there is any similarity between pensions systems in Barbados and most under-developed countries and developed liberal nations. Any such suggestion is as ridiculous as saying our parliament is based on the Westminster/Whitehall model.
I will start with the legal framework. Since 1981, when the dictator Pinochet introduced his new pension in Chile, every single developed nation has introduced new pensions systems.
And what they all have had in common is that they looked first at existing system before framing one suitable for their own countries and cultures.
So, in New Zealand, we got the KiwiSaver; in Australia the superannuation fund; in the UK stakeholder pensions and auto-enrolled pensions (this was a compromise from making pension savings compulsory); and in the US 201(K). The old Soviet empire have all embarked on similar new pensions.
What is also important is the generosity of the financial sector with their accumulated knowledge, especially as far as journalists are concerned. They do not indulge in the nonsense about knowledge is power, but they willingly share their knowledge.
On my paper we had three forms of training for young journalists: in-house or external, organised by the company; courses organised by fund managers, pension funds and insurance companies for their own staff and which they invited journalists to sit in on; and courses organised by other training bodies.
This was not only because of their generosity of spirit, but because they wanted to be accurately reported and, through that, informed their clients and would-be clients.
I will give some examples: AXA, the french insurance company, held (or still holds) an annual residential course at one of its rural country mansions at which journalists from every country it operated in were invited.
It was attended by senior managers, from the CEO down, at which they were day-long seminars for up to four or five days. It was not just PR, every senior manager would make an objective presentation on his area of specialism after which there would be Questions and Answers. If the person did not have the answer immediately, they would go away and come back with the answer.
Legal & General held monthly two-hour long seminars on issues of the day, presented by one of their senior managers or economists, this was in addition to other training opportunities they provided, such as residential courses on financial advice. Fund managers did the same about their products’ performance and on the equity markets, fixed incomes and alternative investments.
In addition, organisations such as the CFA Institute organised a summer school, along with regular (monthly) seminars and business schools often offer reporters training. Some universities and colleges offer paid-for courses in pensions law.
So, in short, journalists are well trained, over and above their basic university training. I hope this clarifies some of the issues.
In the US 401(K)……
@ Hal Austin
GM
Thank you.
I had no qualms about the depth or quality of your presentation/contributions to this issue. I agree with you totally. I learned all that you spoke of during my journey. Social Justice Network (SJN) is all about learning and collecting information to share and assist other less fortunate persons in this world of unjust, evil and cruel people.
I have great respect and admiration for Journalists. I am one that had long thought the Police were unnecessary if society provided adequately for all through social services, education and training etc. I now see the US calling for same and labelling it ‘defunding’.
Good Journalists can do much of Police work (opinion) and serve communities in very tangible ways.
Training is desperately lacking or inadequate around here (region). The effects reared its ugly head in some of the comments here and during my investigations.
Thanks for your tolerance and patience in setting out the facts in such detail so that others would at least start their own inquiry.
I look forward for the day when someone/agency would see the need to mount such training for industry practitioners so tht the products and quality of service to the public is of the required standards. There is just too much paper certification (leading to arrogance) and not enough knowledge sharing and or appropriate training.
@Cherfleur
Thanks
@Cherfleur
His REASONING rather than the fact compels him to state categorically that “pensions are insurance” in the face of all the Laws that states differently and the FSC who is the Body Supervising all financial instruments. I hope he is not at ICB.
Because they are regulated differently and serve different clientele does not negate the truth of Walter’s statement. A pension, at its most basic, is simply a form of longevity insurance.
An occupational pension is a retirement income as already explained. A private pension is an insurance contract, written under contract law or under trust law (also already explained). We can play with words, but this is the case is all liberal democratic countries.
@Hal Austin
What’s your point?
@Dullard
About ?
@Hal Austin
Do you think your interventions above “offer some clarity” as you say? Your knowledge of the area is anecdotal and rudimentary at best; mildly interesting for a laymen but not much use to those in the know.
Cherfler,
Keep up the good work!
@Dullard
I cannot understand what you are saying. Where did I mention anything about anecdotal knowledge? I was simply clarifying what I had earlier said. You are free to agree or disagree.
Have a nice evening.
cherfleur August 18, 2020 6:17 PM
“I learned that the author is an Auctuarian. He is eloquent in articulating on Annuities etc and competent in calculating mathematically, outcomes and futures….aka Annuities.
His REASONING rather than the fact compels him to state categorically that “pensions are insurance” in the face of all the Laws that states differently and the FSC who is the Body Supervising all financial instruments. I hope he is not at ICB………
Yes, because pensions are a fund that money is contributed to over a period of time to benefit an employee in the future (retirement) they are computed using Annuity calculations just as for Insurance. Does that make them Insurances? Categorically NO. Insurances are not set up as Trusts, Pensions are.”
Cherfleur,
I have said it before and I will say it again. Providing public education is a very difficult and thankless job.
I am not here to determine what you know or what you do not know. I prefer to make you think and reflect upon some basic, rudimentary concepts.
If you were to take a careful look at the National INSURANCE Scheme of Barbados and other countries of the Commonwealth, you will find pensions under that INSURANCE umbrella. I did not place pensions there.
If you were to take a careful look at the Social Security (Known as Social INSURANCE) structure of the USA, you will find Old age, survivors, and disability pensions under that INSURANCE umbrella. I did not place pensions there.
You need to produce the part of the CBC pension contract that governs the naming of beneficiaries, and you also need to cite the relevant laws that state that pensions are not a form of insurance.
PS: The professional you are referring to is called an actuary, as Robert correctly pointed out to you.
Insurance is simply a process of saving up today in case of problems tomorrow. It is basic risk management. So, a meeting turn, or sou-sou, is also insurance with the payout being smoothing.
Saving up for a rainy day is also a form of insurance at its simplest. No one in his right mind will describe an ordinary access bank account as an insurance policy.
The legal definition of insurance, however, is different. Only the state (ie social insurance) or an approved company Insurance Company X, can provide insurance cover. On the wholesale side, re-insurance is another matter.
An occupational pension is simply deferred pay. That cannot be defined as insurance. An annuity is a contract with a private insurance provider.
An occupational pension being deferred pay is precisely the argument I made to my attorney. It was accepted after it was researched.
Hal Austin August 20, 2020 3:50 PM
“An occupational pension is simply deferred pay. That cannot be defined as insurance.”
Donna August 20, 2020 4:13 PM
“An occupational pension being deferred pay is precisely the argument I made to my attorney. It was accepted after it was researched.”
Donna,
A policyholder purchased a whole life insurance policy with a face value of $100,000. He lives to age 100, and the insurance company pays him $100,000.
Someone argues that the $100,000 payout from the insurance company can be viewed as “deferred” savings. Seven billion people research this view and accept it.
Would you argue that their acceptance prevents the purchased policy from being insurance?
@ Walter
A whole of life insurance policy is not an occupational pension. We are getting confused. And, in the UK an occupational pension is LEGALLY defined as deferred pay, not insurance benefit/payout. That is the law in the entire EU.
An individual does not purchase a whole of life policy in an occupational pension. The only whole of life cover is death in service, which is one of the benefits of the occupational scheme, either bought by the trustees or self-insured by the trustees.
By the way, if you have a whole of life policy you do not receive a payout not even if you reach the age of 100. I have already pointed to the special circumstances in which this is done by some insurance companies ie if you are on your death bed.
Normally, if you have a whole of life policy and you are 100 you do not receive a penny. WHOLE of life means whole of life – when you die your beneficiaries receive the payout.
You receive a payout if you have term assurance. ie if you have term assurance on a mortgage, the term reduces every year with the mortgage until it reaches the final payment due, when the term assurance policy will payout, giving the beneficiary the opportunity to clear the mortgage.
Hal Austin August 20, 2020 5:41 PM
“@ Walter
We are getting confused. And, in the UK an occupational pension is LEGALLY defined as deferred pay, not insurance benefit/payout. That is the law in the entire EU.”
Hal,
We are not getting confused. You are.
Insurance principles are the mechanism upon which pensions are built. The pension plan itself is a form of insurance. The monthly benefits paid to the pensioner are called pension benefits or annuities. If you choose to call them deferred pay, knock yourself out.
However, you are confusing yourself by incorrectly thinking that, when it comes to quibbling over semantics, someone is calling these monthly payments “insurance benefits/payouts.” No one has done that. Every field has its jargon.
Hal Austin August 20, 2020 5:41 PM
“@ Walter
By the way, if you have a whole of life policy you do not receive a payout not even if you reach the age of 100. I have already pointed to the special circumstances in which this is done by some insurance companies ie if you are on your death bed.
Normally, if you have a whole of life policy and you are 100 you do not receive a penny. WHOLE of life means whole of life – when you die your beneficiaries receive the payout.”
Hal,
You are wrong.
Hal Austin August 20, 2020 5:41 PM
“@ Walter
You receive a payout if you have term assurance. ie if you have term assurance on a mortgage, the term reduces every year with the mortgage until it reaches the final payment due, when the term assurance policy will payout, giving the beneficiary the opportunity to clear the mortgage.”
Hal,
The policy you are referring to is called Decreasing Term Life Insurance.
As the policyowner makes mortgage payments over time, the face value of the policy decreases to mirror the decreasing outstanding mortgage principal.
If the policyowner survives the term of the policy, no insurance payout is made.
If the policyowner dies during the term of the policy, the face amount paid by the insurance company at the point of death would give “the beneficiary the opportunity to clear the mortgage.”
We have no idea of who is reading BU so, at all times, we must strive to ensure that the information given is accurate, clear, and easy to understand.
Hal, You are wrong. {Quote}
@ Walter Blackman
Hal Austin ……… WRONG?????
YOU CAN’T BE SERIOUS!!!! That man KNOWS EVERYTHING ABOUT EVERYTHING AND IS NEVER, EVER WRONG.
Imagine, PLT do a few economics courses doing his MBA and Austin does drop he sarcastic remarks to imply PLT ain’t know what he talking bout. But he Austin trying to tell we he do a few one day seminars bout insurance and pensions and that make he an expert.
I thought I was the only body, but Dullard see right through he that his knowledge of pensions and insurance is anecdotal and rudimentary at best; mildly interesting for a layman but not much use to those in the know.
@ Walter
It is called term assurance in the UK the same way we talk about equity release from the equity in a property and you talk about a reverse mortgage.
And yes, the term assurance provides life cover for the policy holder during the lifetime of the policy, which as I said reduces with the mortgage. If the mortgage is interest-only, the borrower will have to make provision to pay off the capital at the end of the term; that is usually covered by investing a planned amount over that period in the equity markets. That will provide the lump sum at the end of the repayment period to cover the capital.
I think we are drifting away from occupational pensions and now talking about something else. To return to occupational pensions, in an environment where occupational pensions are normally provided, and in a culture of job mobility, there is a right of preservation, in that minimum contribution should be preserved to the normal retirement date. It must also have an actuarial value.
Finally, there are a large number of professional people involved in pensions: from policy consultants, to specialist pensions lawyers, to pensions actuaries, to pensions administrators, to trustees, all are obviously not qualified actuaries, and, relevant to this debate, actuaries are not the most important of the professionals involved.
a
Hal Austin August 15, 2020 3:00 PM
“@ Walter
It is nice discussing pensions policy with a pensions actuary.”
Hal Austin August 21, 2020 10:14 AM
“@ Walter
……relevant to this debate, actuaries are not the most important of the professionals involved.”
Hal,
LOL.
I must congratulate you for the unmatched and indisputable skills you have honed in the area of intellectual acrobatics.
@ Walter
Where is the contradiction? In my experience the most important professionals involved in occupational pensions are the benefits consultants who pick the fund managers for the pension funds, I am sure you are familiar with the big names and the pensions lawyers. We have an association of pension lawyers in the UK, ask them how they define a pension.
To ordinary scheme members the administrators are the most important because the administrators are the ones who do the paper work for them. Actuaries are backroom men and women who do the maths.
Is that intellectual acrobatics? I appreciated having a civilised discussion with someone on pensions, or any subject, without trying to be rude or obnoxious, as is the BU way. Was I wrong?
I have noticed that you sometimes ignore replies to points you make or change the goal posts, but have ignored it. For example, you continue to confuse occupational pensions with personal pensions. I did not see that as intellectual dexterity. I simply pointed out there are basically three types of pensions – st ate pensions, occupational pensions and personal (private) pensions. All these are sub-divided with their own provisions.
I mentioned term assurance and you came back with another name. I put the name down to the jurisdiction you work in. It is the component of the policy that is important. What we call trousers you call pants; what we call waistcoats you call vests.
But you agreed that term assurance is the policy which reduces with the remaining period of the insured product.
I said in the UK the legal definition of a pension is deferred pay, you danced around that. Again I put that down to the jurisdiction. I am not an intellectual. By the way, you do not have to be a mechanic to be a driver of a vehicle.
By the way, i accept you are an actuary and are more skilled at pensions maths than I am. I cannot count from one to ten without making a mistake. I however doubt it on pensions policy.
Hal,
As the blogmaster would say, “you have had the last word”.
I do not know what having the last word means, nor has anyone ever said convincingly what it does. But assume it means something.
Have the last word
Polite version
I dun wid dat
I dun wid you
Makes no sense we two talking wid one annudds
Impolite version
@ Theo
That is the literal meaning. But, as you know, these sayings have a deeper cultural sociological meaning. I always give the one of: don’t mind him, man. I know him.
Or, as a British author (Guy Browning) writing on the British Constitution said: Britishness has more to do with the complex ways of saying ” I can’t grumble”, or “can’t complain”, or tut-tutting when someone fails to stand in a queue or pretend to be religious in order to get their children in religious schools (usually the best).
For example, teeth-sucking is a disciplinary offence in most London schools and is very common among African and Caribbean people.
As Habermas says, a public discussion is about the sharing of understanding if not we just talk at each other. We all understand the literal meaning of ‘having the last word’; but we do not share its deeper cultural and sociological meaning or even its history.
When a fella says “you may have the last word,” in Bajan parlance that does usually mean he ain’t responding to you no more because he done with the discussion.
Now, Mr. Know-it-all gine come now talking bout the cultural, sociological and historical meaning of that phrase, just to give people the impression that he is the brightest man on BU.
Whole life insurance, or whole of life assurance, sometimes called “straight life” or “ordinary life,” is a life insurance policy which is guaranteed to remain in force for the insured’s entire lifetime, provided required premiums are paid, or to the maturity date. As a life insurance policy it represents a contract between the insured and insurer that as long as the contract terms are met, the insurer will pay the death benefit of the policy to the policy’s beneficiaries when the insured dies. Because whole life policies are guaranteed to remain in force as long as the required premiums are paid, the premiums are typically much higher than those of term life insurance where the premium is fixed only for a limited term. Whole life premiums are fixed, based on the age of issue, and usually do not increase with age. The insured party normally pays premiums until death, except for limited pay policies which may be paid up in 10 years, 20 years, or at age 65. Whole life insurance belongs to the cash value category of life insurance, which also includes universal life, variable life, and endowment policies….(Quote)
Some of want to read the CNC pension plan. What were the pension rules. How did the trustees at CBC function if at all. Are there minutes of trustee meetings. Are the court minutes available for sharing?
I want to take this opportunity to warn BU readers about the danger of accepting “cut and paste” excerpts from any and everybody. As Hants often advises us: “Let Google before your friend”.
It took me only 2 seconds to come up with this excerpt to support what I wrote before.
https://www.kitces.com/blog/outliving-the-end-of-life-insurance-mortality-tables-the-age-100-tax-problem-when-life-insurance-expires/
“However, the reality is that the underlying structure of permanent insurance, and the key characteristic that makes it affordable to have coverage – even in the later years of life – is that a “permanent” insurance policy actually has an ultimate maturity date, such as age 100. Which means if you live beyond that point, the policy “matures” and pays out its face value!
Fortunately, policies issued in the past 10 years or so primarily use the newest 2001 CSO mortality tables, which were extended to a maximum life span of age 121, to reduce the risk of the insured outliving the end of life insurance mortality tables. However, most existing permanent life insurance was issued under “old” mortality tables with a maximum age of 100 (or even age 96), which means most permanent life insurance owners still have to contend with the possibility that they can actually outlive their life insurance… and face the tax consequences that come with it!”
“Let Google be your friend”
@Walter Blackman August 22, 2020 1:09 PM
What tax implications are you referring to? Is there some tax payable on the dividends if they cash-in?
On another note, I don’t see why someone fortunate enough to live until 100 would not have cashed in their insurance policy years earlier and enjoy some of the fruits of their labour before they go to the great beyond unless they don’t need the money because they are rich or have a great pension or other income source allowing the to live comfortably.
On BU
“You may have the last word” means
“Get lost do!”
@Hal Austin August 21, 2020 2:45 PM “without trying to be rude or obnoxious, as is the BU way. ”
O lordie, lordie.
Looka who is referring to others as rude and obnoxious.
Isn’t it Mr. Super Rude & Obnoxious himself?
I t hi more intellectual dexterity or just ignoring different jurisdictions?
Here are some cut and past definitions from the UK jurisdiction:
Whole-of-life insurance is a type of life insurance policy which ensures that, no matter when you die, your loved ones will receive a lump sum payout from your insurer. This is in contrast to term life insurance, which only guarantees that there will be a payout should you die within the specified term of the policy.
Whole-of-life insurance explained – Which?
A life insurance for over 50s is known as ‘whole of life’ cover, because it covers you for the whole of your life, no matter how long you live. You’ll often be immediately covered for accidental death and have full cover after a year or two.(Quote)
What is whole-of-life insurance? Whole-of-life insurance is a type of life insurance policy which ensures that, no matter when you die, your loved ones will receive a lump sum payout from your insurer.
This is in contrast to term life insurance, which only guarantees that there will be a payout should you die within the specified term of the policy.
How much does whole-of-life insurance cost? Whole-of-life insurance is generally a more expensive form of life cover than term life insurance or family income benefit insurance, for the simple reason that insurers know they will definitely have to pay out some money at some point.
You must ensure that you can afford the premiums, not only during your working life but also once you retire. If you fail to keep up with your premiums, the cover will be cancelled.
That said, many whole-of-life policies will only require you to pay premiums up to a certain age, typically to age 90. This will vary between insurers and policies, however, so read the terms and conditions of any policy closely before taking it out.
The actual cost of your whole-of-life insurance policy will be come down to a host of factors about you, such as how much cover you want, your age, your health and your lifestyle.
What are the different types of whole-of-life insurance? Whole-of-life policies broadly come in two main types – balanced cover and
maximum cover
Balanced cover
With balanced or standard cover, your premiums will stay the same throughout your policy. Even when you get older, and your health may deteriorate, you will still pay the same amount for your cover. As a result, your premiums are guaranteed.
You will also have a fixed cash sum agreed upon which the insurer will pay out when you die.
Maximum cover
With a maximum cover policy, your cover is linked to an investment fund. The insurer invests the money you pay each month, in the hope that the returns generated from that investment will be sufficient to cover the cost of the eventual payout. Your premiums will then be reviewed on a periodic basis.
If the investments are not performing to the level that the insurer wanted, your cover may be changed. The insurer may increase your monthly premiums, or reduce the size of the payout your loved ones will receive after you die.
While these policies are likely to be cheaper initially, premium increases are likely and can, in some cases, be substantial. Who is whole-of-life insurance suitable for?
One of the big selling points for whole-of-life insurance is that it can help your family deal with an inheritance tax bill. If your estate is worth more than £325,000, inheritance tax will be charged at 40% on the value of the estate above that threshold.
However, the tax will need to be paid before your loved ones will be given access to the estate. You can find out more in our guide to inheritance tax.
This can put your family in a difficult position – they need to pay a tax bill, running into the thousands of pounds, but they cannot use the money in your estate to do so. As a result, many are forced to take out a loan just to cover this bill. This can be an added source of stress at an already upsetting time.
A whole-of-life insurance policy can help avoid this issue. The payout provides the funds needed to clear the inheritance tax bill without needing to take out a loan or dig into their own savings.
This is reliant on the policy being written in trust, though. Find out more in our guide to how to write life insurance in trust.
Whole-of-life cover may also appeal if you are determined to leave some form of inheritance to your loved ones, or if you want to help with your funeral costs.
Who is whole-of-life insurance unsuitable for?
Life insurance is really important if you have financial dependents, whether that’s a spouse or children who would be left worse off financially if you were to pass away.
However, as you get older, those loved ones may no longer be so reliant on the money you bring in. Once you’re in your seventies, for example, you may have cleared your mortgage, while your children have long since left the home to start families of their own.
As a result, you might prefer to stick to a term life insurance policy to cover you throughout the period on which your family is most likely to need financial help should you die.
Can I cash in my whole-of-life insurance policy early?
Some whole-of-life insurance policies will allow you to cash them in, and get some level of payout before you actually die. If you are tempted to do this, be sure to check the terms of your policy as the surrender value of your policy may work out as significantly less than what you have paid in premiums over the years. There may also be charges associated with doing so….(Taken from Which?)
Read more: https://www.which.co.uk/money/insurance/life-insurance/whole-of-life-insurance-explained-anxck1z1266d – Which?
http://www.which.co.uk/money/insurance/life-insurance/whole-…
cut and paste…..
@WB
@HA
I like you both.
WB, you are not going to win with HA.
HA takes the ‘last word’s as a sign of victory. He will have the second last, the last, and one after the last (as a victory lap).
@ Theo
I am glad you like me. I like you too. It is not a matter of the last word, whatever that means. I appreciate Walter’s extensive knowledge and education. But, in the process, do you expect me to abandon mine?
Critical Analyzer August 22, 2020 1:26 PM
“@Walter Blackman August 22, 2020 1:09 PM
What tax implications are you referring to? Is there some tax payable on the dividends if they cash-in?”
Critical Analyzer,
I am not the one referring to tax implications. The excerpt was written by Mr. Michael Kitces.
Generally speaking, you and I know that the proceeds from a life insurance policy are tax-free. However, there are some situations where the amount received in insurance payouts might be greater than the promised policy benefit. Some governments view such “excess payout” as taxable income.
One situation that easily comes to mind is the accumulation of dividends by policyowners under par policies. Cashing in those dividends can amount to “excess payout” and can also lead me to tell you, “yes, there might be some tax payable on the dividends if they cash-in?”