mystery of pensions

And you have facts mgdavid? The one truth? You must tell us how you created that. For the moment, because I haven't yet been given answers to the question of what my £60K SERPs policy is supposed to provide as a pension, either by HMRC NICO who are operating under a backlog which has increased by 3 weeks in the last 3 weeks (yes a standstill), and because the insurance company is Aviva, I have to say "I dunno". Fact.

Exactly, it seems a bit corny to say so, but "am I bovvered?" is perhaps the real question when it comes to deciding whether in later working life it should be an aim to try to fill in NI contributions by working or by qualifying some other way e.g. as a carer, or of course by paying HMG for any contracted in incomplete years which are still possible to pay for at £700 a pop or similar ...

As for the general comment of the subject having "being done to death" I disagree. It remains an unholy muddle. The new State Pension forecasts are assuming a full NI contribution record for everyone, right up to SPA. That isn't at all realistic. So hundreds of thousands of late baby boomers are clutching bits of paper with a headline SP forecast figure which they actually are not going to get near because they will not actually work continuously until 66 or 67 or at all! There are an unpublished number of economically inactive pre-pensioners in the age 50 to 65 bracket. They are living off of savings and equity release and rising offset mortgages and Lamborghini release pensions.

Even my father, a normal manual worker, retired early at 57 in good health. He wasn't well off, but his 1970s £3,000 mortgage was all paid off

He only ever bought one new car in his life and then only in retirement. A mini for about £5,000 I think!

He'd simply had enough of the typical hassles of modern working life as of 30 years ago and took a reduced pension in order to explore the meaning of life in a little more detail whilst he still had time! I am not sure he discovered the secret, but he was fairly high up on the happiness index without working till he dropped, and he improved his already fairly good snooker prowess - in later days mostly from what he picked up on the telly!

Exactly.

If I recall correctly that incorrect current forecasting style even put the (overly rosey) forecasted amount in very large font?

The tone of the thing is not of a caring government, but of a corporate which is trying to put customers off the scent of low performance and misleading their expectation.

Is it deliberately that way to minimise political awareness and protest I wonder?

It's all spin.

If the forecast said something like "Your current new SP forecast is £Xpw but you could increase it by £Y pw for every extra year of full NI contributions you manage to squeeze in between the date of this forecast and your State Pension Age birthday (i.e. you could work continuously to top up to an absolute maximum State Pension of £Zpw - but only if you succeed in putting in ___ {(Z-X)/Y} extra full years of NI contributions before SPA)", then the so called New State Pension Forecast might result in spin-free communication.

Or if each forecast contained a warning to those not in work at the point of the forecast, to the same effect as the above, then it might mean a bit more to large numbers of economically inactive in our age group.

pensionnovicehelp wrote: »

Legal & General call my pension policy a,

"Bulk Buyout Group Deferred Annuity (Defined Benefit Scheme)
Normal Retirement Age 65

Searching on line a "Defined Benefit Scheme" is also called a "Final Salary"

Legal & General says this is NOT a Final Salary pension?????

Reading on-line some Defined Benefit Schemes can only be transferred to another Defined Benefit Scheme, but other Defined Benefit Schemes can be transferred to a Defined Contribution pension,
something to do with Funded or Unfunded scheme.

I saw your latest post earlier today, and I am a bit surprised none of the IFA or FA types have jumped in this afternoon/evening and tried to explain the confusion you've highlighted quite reasonably in your last post.

Ah but wait, while I've been crafting this post, I see now that our ever constant xylophone has also been working on some angles again for you.

One thing that xylophone may not have picked up on, and which I may be wrong about - were these two (L&G and SW) plans part of the same wind up solution by the trustees of one original DB scheme. I'm guessing they were.

Your dual arrangement(?) arising from same original DB scheme i.e. with L&G and SW seemingly having been approached separately by trustees to split the buy out liability for deferred members at April 1997, sounds quite novel, and it may have been the very best hard-pressed but resourceful trustees and advisers could do under financial pressure (scheme deficit?) when they wound up your old Defined Benefit Scheme in 2000.

They will no doubt first have secured existing retirees benefits by bulk buy out of immediate annuities for them, perhaps with the Pru or ANOther annuity provider (maybe even L&G or SW). I think they will have been obliged to do that first, but then came the challenge of protecting all you deferred members with what limited scheme assets they had left after sorting the retirees first.

That's when it looks like they managed to chunk it up, with pre April 1997 liabilities agreed with L&G, and the 4/97 to 9/2000 liabilities picked up by SW?


I did find one possibly similar L&G policy being discussed in an old thread on the Consumer Action Group website.

It may help xylophone decipher the L&G phrase "Secured Minimum Pension" (as opposed to "Guaranteed Minimum Pension" from Contracted Out parlance) That CAG example L&G buy out policy covered the post 1997 rights as well as pre 1997 all in the one plan, and it used the same policy schedule phraseology as yours. That one also very interestingly made it clear what the annual pension was as at the date of leaving service, and then it went on a bit about annual revaluation percentages. Does yours mention annual revaluation percentages?

So reading between the lines, sounds to me that with that particular L&G policy, there may not be a DC pot of money with your name on it in the normal DC sense - maybe why they don't issue annual statements. But L&G might well respond and quote a transfer value now if they see opportunity to discount some future liability to you by doing so - trouble is, as xylophone pointed out some posts back, before any accepting scheme or SIPP provider can accept a transfer from the L&G policy they almost certainly need to see that you have taken advice from a Pension Transfer Specialist because of its size which would be definitely well over the £30,000 max that might be transferred without advice, and that advice may well show you that whatever L&G quote as a transfer value is not enough!

So I think it would be very interesting what what else it says in the schedule?

A less than cautious transfer would certainly be against your interests, especially with a deal as interesting as yours I think - accepting a too low transfer quote without ever quite knowing what super benefits you might be giving up inadvertently, could be a big mistake.

By the way, the Secured Minimum Pension Transfer Value £58,124.82 you quoted in your first post I think would have been the price L&G accepted as a transfer from the old DB scheme to them as consideration in taking over cover for your £3,187.56 pa pension date of leaving services liabilities calculated as at 5.4.1997 and using that as a notional "date of leaving service", and is the exact sum the trustees agreed to pay to L&G to buy you that policy? One would anticipate if that was effectively the premium the trustees paid for the policy/plan in 2000, then it might be worth a whole lot more now as a 2017 transfer value? Even in 2000 it was quite a significant transfer value for a 31/32 year old at the time.

A £ 3,187.56 p.a.pension at a "leaving date" of April 2000 could be very valuable if it is to be revalued at a typical fixed rate of 6.25% pa for 33 years or maybe even 36 years (if calculated from 5.4.1997! That'd increase it by a factor of 7.4 i.e. around £23,500pa. If the 36 years comes into it, that'd make it nearer £28, 200pa! Is that how your L&G plan works, do you think?

Others will soon tell you how much you might otherwise have to pay on the open market for a guaranteed deferred annuity that'd pay that much from 5.4.2033, but before you get too excited, as xylophone said earlier, perhaps best to have some serious words and check with L&G.