Andy Chadwick says he was not warned about the scheme
Former soldiers who fear their pensions have been lost are calling on the government to pay them back.
The group, who had all left the armed forces, were persuaded to transfer dormant pensions into a risky scheme by unregulated salesmen.
They said the Ministry of Defence (MOD) failed to check whether they were moving savings to an appropriate scheme.
The MOD said it wrote to those who had requested transfers to such schemes.
‘No contact’
One of the soldiers, called Robert, had served in Afghanistan and Iraq before leaving the army in 2011 at the age of 32 to start a family.
He had built up a military pension of about £40,000, but was approached and persuaded to transfer his dormant pension into something called Pinnacle Pension Scheme, which the unregulated salesman told him would make much more money. An estimated 150 people went into Pinnacle, but now fear their pension savings have been lost.
He told BBC Radio 4’s You and Yours that he was not contacted by the MOD to check this was an appropriate scheme.
“I think my pension should be reinstated,” he said. “If they did know that these companies were out there, they should protect their soldiers. I can’t put across the amount of stress and sleepless nights this has caused me.”
Another soldier – Andy Chadwick, a former light infantryman – also said he was never contacted by the MOD despite the fact he had not received any financial advice.
“I did not know anything about pensions. They should pay my money back. The way things are going I am going to have to work until I am 80 before I can retire,” he said.
If the MOD had checked, it would have discovered that Pinnacle had no employees and no money in the bank. Savers’ money was invested in another separate company which was shut down, and the trustee company responsible for Pinnacle was itself shut down by the government last year.
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In 2013, the government knew there were big problems associated with unregulated pension transfers, and was warning pension organisations to make sure people transferring were aware of the risks.
The soldiers claim the MOD were not following the government’s own advice at that time.
The MOD said: “Once scheme administrators were made aware of the risk to members in November 2013, transfers to schemes of this kind were placed on hold.”
‘Deeply troubling’
However, Mr Chadwick’s documents showed he was transferred in March 2014, some four months later.
The MOD also said the pension scheme “pro-actively wrote letters to members who had requested transfers to such schemes”, but none of the soldiers spoken to by You and Yours said they received such letters.
Files released by the MOD show one letter about Mr Chadwick but not to him, which says the MOD sent information to his “independent financial adviser”, but Mr Chadwick did not have one.
A freedom of information request has revealed between 2013 and 2015 about 3,600 former service personnel transferred their money out of the MOD scheme. It is not known how many put their pensions into high-risk schemes similar to Pinnacle.
Dan Jarvis, Labour MP for Barnsley and the mayor for the Sheffield City Region, served with the Parachute Regiment and, by coincidence was Robert’s company commander in Afghanistan. He said: “He has done a very good job on behalf of our country.
“It is deeply concerning that he now finds himself in a terribly difficult situation.”
He said he would raise the case with the relevant ministers.