BT pension

StevieJ
StevieJ Posts: 20,174 Forumite
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in Pensions, annuities & retirement planning
I was talking to someone the other day about pensions (and the increase to age 55) he worked for BT and said it didn't apply to him as his pension had protected status. I found this odd so I did a little research and found this.

Under current legislation, an individual can begin to receive their pension from any age after 50. Under the current rules of the pension scheme, any benefits taken before age 60 would be reduced for early, and therefore longer, payment. From 6 April 2010, legislation will increase the minimum retirement age to 55, however, for most members of the BTPS, the current minimum retirement age is protected at age 50. The adjustment for early and therefore longer payment is calculated to ensure that it does not have an impact on scheme funding levels.
Members of the SLFPP and the BTRP, are currently able to receive their pension benefits from age 50. However, with effect from 6 April 2010, the minimum age will be 55 as per the change in legislation.


Why are some BT pension members exempted from the legislation, is this a more general exemption that covers other companies in certain circumstances :confused:
'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher

Comments

  • kennyboy66_2
    kennyboy66_2 Posts: 2,598 Forumite
    StevieJ wrote: »
    I was talking to someone the other day about pensions (and the increase to age 55) he worked for BT and said it didn't apply to him as his pension had protected status. I found this odd so I did a little research and found this.

    Under current legislation, an individual can begin to receive their pension from any age after 50. Under the current rules of the pension scheme, any benefits taken before age 60 would be reduced for early, and therefore longer, payment. From 6 April 2010, legislation will increase the minimum retirement age to 55, however, for most members of the BTPS, the current minimum retirement age is protected at age 50. The adjustment for early and therefore longer payment is calculated to ensure that it does not have an impact on scheme funding levels.
    Members of the SLFPP and the BTRP, are currently able to receive their pension benefits from age 50. However, with effect from 6 April 2010, the minimum age will be 55 as per the change in legislation.


    Why are some BT pension members exempted from the legislation, is this a more general exemption that covers other companies in certain circumstances :confused:


    Happy new year Stevie !,

    I had thought that the legislation from April 2010 to increase the pension age to 55 trumps all scheme rules including BT. (although you may be able to retire earlier through ill health)

    However I have seem somewhere else that if you were in the BT pension scheme before 2003 that you can still retire anytime after 50.

    What does change is that you can't draw your pension and continue to work for BT until 55 (after April 2010).

    Probably applies to Police pensions as well.

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  • StevieJ
    StevieJ Posts: 20,174 Forumite
    First Anniversary First Post Combo Breaker
    Happy New Year Kenny, hope you will return to posting regularly soon.
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • chris_m
    chris_m Posts: 8,250 Forumite
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    I emailed the BT Pensions people about this last week, so I can prepare my long-term plans,
    kennyboy66 wrote: »
    However I have seem somewhere else that if you were in the BT pension scheme before 2003 that you can still retire anytime after 50.

    Unfortunately, they didn't confirm this in their reply. I've asked them again, maybe my original question wasn't clear enough for them, the followup one is ;-)
    kennyboy66 wrote: »
    What does change is that you can't draw your pension and continue to work for BT until 55 (after April 2010).

    But they did confirm this bit. All their first reply covered was about drawing pension and continuing to work for the company, which is not what I want to do.
  • MikeJones_2
    MikeJones_2 Posts: 778 Forumite
    First Post
    edited 4 January 2010 at 6:54PM
    Hi all,

    There's a simple explanation of the new minimum retirement age regulations and 'protected lower retirement age' here:

    - Statutory minimum retirement age (TPAS)

    Hope that helps?

    Mike

    I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.
  • Andy_L
    Andy_L Posts: 12,786 Forumite
    Name Dropper First Post First Anniversary
    StevieJ wrote: »
    however, for most members of the BTPS, the current minimum retirement age is protected at age 50....
    Why are some BT pension members exempted from the legislation, is this a more general exemption that covers other companies in certain circumstances :confused:

    I suspect that the scheme changed recently and thus new entrants did not have the "unconditional right" (as per MikeJones' post) to retire at 50. Since that was only a few years ago most members (of the BTPS) would still have a protected retirement age
  • chris_m
    chris_m Posts: 8,250 Forumite
    First Anniversary Name Dropper First Post
    edited 5 January 2010 at 7:51PM
    That is correct - the scheme was altered last April to improve sustainability. The Final Salary benefits earned before April 2009 are protected and future benefits are built up on a new CARE basis, split between a pension and a lump sum. Also, normal retirement age was moved from 60 to 65. There were a few other tweaks the details of which I cannot immediately recall. A date in 2006 relating to the protected retirement age does ring a bell and sounds like that mentioned in Mike's link.

    However, before finalising my plans I'm awaiting the word "from the horse's mouth" to be absolutely sure. I have a few years to go anyway, so there's no desperate hurry apart from ascertaining what I can plan/dream for and what further economies/savings I can/should do to help it along ;-)


    Edit - received confirmation today that the scheme does allow me ( and others in the scheme before 2006) to retire at any time from age 50 and draw pension immediately if desired. Obviously, it would be actuarily reduced to reflect the early payment. One more variable pinned down in the plans ;-)
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