Guaranteed Minimum Pension/early retirement

Derek.Sloan

Hi Mike,
I have a similar problem but when I asked my pension administrator I am told the the RPI add on is only applicable if you left the scheme after 1986. In my case ,I left the scheme in 1980 none of the additional RPI percentage increases would be added to my deferred GMP. I am able to take my pension a bit earlier (age 62 and 3 months, I'm now 60 ) but the sum is slightly reduced from the amount stated on my deferred Pension Certificate. Do you happen to know if there is any prospects to have the RPI add ons applied to earlier than 1986 scheme leavers ?
Your information was truly excellent and the example you gave came very close indeed to my own situation. At this stage it is all a bit of a minefield to work out but expertise like yours makes it much easier.Many thanks
Cheers Derek

MikeJones_2

Hi Derek,

Derek.Sloan wrote: »

Do you happen to know if there is any prospects to have the RPI add ons applied to earlier than 1986 scheme leavers ?

As far as I know there are no plans to improve the lot of earlier preserved pensions. The reasoning would be simply because the cost to sponsoring employers would be prohibitive.

From the mid 1980's successive governments decided to introduce legislation to counter the effect of inflation for people with preserved pensions. Over a period of time improvements helped in a variety of ways.

There were a number of changes introduced over a period of years, but I can only think of one which provided retrospective assistance to preserved members. That was the introduction of new legislation with effect from 6th April 1997 which gave the ability to be able to transfer preserved benefits for people with a preserved pension who had left pensionable service before 1st January 1986 (with certain exceptions).

Derek.Sloan wrote: »

At this stage it is all a bit of a minefield to work out but expertise like yours makes it much easier.

Don't be frightened to ask further questions or post specfic figures if you want something worked out. As the boards say, there's no such thing as a daft question and it's better to be wise before the event (and never moreso than in retirement planning).

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.

hemmed58

Hi,
I am new to this site and am not sure how to start a new thread. My reply is for advice to do with this thread.
I have paid into the NHS pension fund for 26 years. I am a 54yr old female and am thinking of taking early retirement. My NHS Pension age is 60, state pension age 65. I have a pension forcast for early retirement but do not know where I am with the Guarenteed Minimum Pension part of it. I assumed I would be able to retire early but I'm having doubts now.
My 26 years are between 1973 and now.

Thanks for any advice--Viv

bloaty

hemmed58 wrote: »

Hi,
I am new to this site and am not sure how to start a new thread. My reply is for advice to do with this thread.
I have paid into the NHS pension fund for 26 years. I am a 54yr old female and am thinking of taking early retirement. My NHS Pension age is 60, state pension age 65. I have a pension forcast for early retirement but do not know where I am with the Guarenteed Minimum Pension part of it. I assumed I would be able to retire early but I'm having doubts now.
My 26 years are between 1973 and now.

Thanks for any advice--Viv

You don't say what field you are in, as some professions have special class status and can retire at 55 without penalty, whereas if you are in administration you would forfeit some of your pension according to your age on retirement.

Scheme fact
If you have Special Class Status and you retire voluntarily before age 55 your benefits will be reduced as if your normal retirement age was 60.
The following table shows how much your pension and lump sum is reduced by if you choose to retire early. If you retire between the ages shown the benefits payable will vary.

Go to this link.


http://www.nhsbsa.nhs.uk/Pensions/2682.aspx

Age Age

59

58
57
56
55
54
53
52

hemmed58

Hi,
I am not a special class member. The pension quote I have takes into account retiring early.

I'm just worried that I won't have enough in my GMP fund.

daviday

I wonder how GMP will affect my situation. I'm nearly 55 years old and am thinking of taking early payment of a deferred pension. I was opted out of SERPS and in the company scheme from 1979 to 1992, starting with a gross salary of around 5,000 pounds/year and finishing at 30,000. The retirement age for scheme members is 60 and, if I wait the remaining five years until I reach that age, and based on today's money (it is index-linked without limit) would be worth around 11,000 pounds, so with a six per cent/year reduction for early payment would now be payable at something like 7,700/year (increasing with RPI in subsequent years). Does it look likely that I'll be able to take an early pension?

sawutdee1

We are having the same situation at my company at the moment.
There are about 60 of us being made redundant this year.
We are all getting pension quotes for our final plan salary at the moment.
Some people are in the same position.
They are being allowed to take their pension early, after the actuaries reduced their pension further, paying the amount they have taken off them now, back to them when they reach 65.

dunstonh

GMP doesnt stop you taking the pension early. It just stops you on that particular plan. You can transfer it to a personal pension with immediate commencement. However, you will lose all the guarantees that exist and in many cases, the loss of those will be significant.

However, you can only look at each case on an individual basis as there is no rule of thumb.

maggieann155

hi
what an excellent forum this is!
it's the only place thats explained gmp and early retirement options that i can even begin to understand !

if we wanted individual pensions advice, do we need an IFA or specialist pensions adviser?

many thanks

dunstonh

if we wanted individual pensions advice, do we need an IFA or specialist pensions adviser?

An IFA. Some of whom may be specialist pension advisers. Although in most cases, that would be overkill. Most IFAs have some form of networking where if its a transaction that is outside of their scope or chosen speciality, they will have access to an IFA that can do it. However, most people will be fine with a non specialist. (no point paying a surgeon to apply a plaster)