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Guaranteed Minimum Pension/early retirement
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If your COEs are below the UEL I'd need to know exact figures I'm afraid before I could calculate.
The Fixed Rate reval figure was 6.25% for leavers between 6/4/97 and 5/4/2002 so that might be throwing your calcs out slightly if you're using 6.5%.
Once you know actual GMP at leaving it's revalued by 6.25% pa compound for each complete tax year between date of leaving and GPA, so 25 tax years in your case between Mar 02 and your GPA of June 2027.
Tip, to reval GMP first divide it by 52 to get a weekly figure then apply the compounding then scale back up to an annual figure. This will get closer to the actual figure HMRC will calculate rather than just applying the compounding to the annual amount.
I don't know your scheme rules, but normally IME the element of your pension earned before 6/4/97 has to be greater at early retirement (or be projected to be higher at GPA) than the revalued GMP at GPA, so even if your Pre & Post 97 elements put together covered it, retirement may still be disallowed if the Pre 97 didn't cover GMP on its own. As I say, you'd need to check with BT as to how they'd proceed in that situation.
Sorry, I'm just trying to understand your last paragraph. You mean they take the pension value at 6/4/97 and add cost of living increases up to early retirement and compare that to the revalued GMP at 65?0 -
Sorry, I'm just trying to understand your last paragraph. You mean they take the pension value at 6/4/97 and add cost of living increases up to early retirement and compare that to the revalued GMP at 65?
Don't worry, quite a few pension administrators of my acquaintance seem to have trouble with it as well. Here's what should happen, you were in the scheme from 87 to 02 so your deferred pension will have at least 4 sub elements to it:
Pre 88 GMP
Post 88 GMP
Pre 97 excess (over GMP)
Post 97
GMP revalues by 6.25% pa compound, the other elements probably by Section 52a Orders (Government inflation instructions to occupational pension schemes). If you take early retirement the revalued Pre 97 excess amount at early retirement is normally the figure that is compared to the revalued GMP at GPA.
However, before GPA, the Pre 97 excess will also normally include your GMP revalued to date of early retirement so the comparison is:
(GMP & Pre 97 excess revalued to early ret date less early retirement reduction plus guaranteed or assumed increases to GPA) must equal or exceed GMP revalued to GPA.
If you manage to get exact figures for the different elements post them up & I can do some rough estimates although you'd also need to get the early retirement factors and exact dates of service. PM me if you'd rather not put them on an open forum.It only takes one tree to make a thousand matches, it only takes one match to burn a thousand trees. As well, the cars are all passing me, bright lights are flashing me.
Johnny Was. Once.
Why did he think "systolic" ?0 -
Hi, I'm new to this forum so please bear with me...
What I don't understand is had I stayed contracted into SERPS/S2P I would now be receiving and Additional State Pension of £97 per week on top of my Basic State Pension.
However I was contracted out and have just been informed by my pension provider that my basic Occupational Pension will increase by £34 per week as a result of a COD/GMP accrual of £7,330.00 per year. I make this £140 per week!!!!!
Can any one explain to me what is going on as I was led to believe that an additional Occupational Pension would be at least equal to the Additional State Pension?0 -
basic Occupational Pension will increase
Are you sure you have this right?
Are you about to draw your state pension?
You will have received a statement of benefits from the Pensions Service?
What is shown for
Basic State Pension
Pre 97 Additional State Pension
Contracted Out Deduction
Post 97 Additional State Pension
Graduated Retirement benefit.0 -
Thanks xylophone for you interest.
Yes, I am about to receive my Basic State Pension.
My occupational pension provider has given me two figures one equates to my basic occupational pension payable at retirement date and the other to the amount my basic occupational pension will increase by when GMP, resulting from COD, is added at my retirement date. The increase is £34 per week or £1768 over the year. I am therefore comparing this sum of £34 per week to the Addtional State Pension figure of £97 per week had I not contacted out.
Basic State Pension is £110.15
Pre 97 Addition Stae Pension £97.53
COD deduction £104.98
Post 97 Additional State Pension £2.41
GRB £ 4.35
There is also a figure of £22.62 for post 2002.
Trust this makes sense.
I see that the: SSPA Act 1975 guarantees that at State pension age the benefits from the scheme will be at least as much as the additional pension they would have received from the State had they remained within S2P and not been contracted out.0 -
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See also post 33 in the above thread - have you had such a letter from the Administrator of your Occupational Pension?0
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Thank you for directing me to Post 12 and to the thread contained in the link.
I note from the linked thread that 'SeekTruth' (in Post 7) is implying that an occupational pension will, in addtion, pay the COD amount of (in my case) £140.98 per week.
So, just to make sure my understanding is beyond doubt, if my occupational pension is say £1500 per month at retirement age it will be supplemented by an addtional £563 per month (being the COD of £140.98 x 4) equating to a gross figure of £2063 per month and that this amount will be paid by my occupational pension provider.
Is this also your understanding?
Many thanks for humouring me!0 -
Your occupational pension [B]includes the guaranteed minimum pension - it is not in addition to it.
You have a statement from your Occupational Pension administrator that shows your pre 88 GMP, post 88 GMP and the excess?
See post 23 - does this cover your situation?0 -
Thanks for putting me straight on this. In a nutshell and in hindsight it would have been better not to have opted out as £34 per week compared to £97 per week is a no brainer!!
Had I not have opted out my basic occupational pension would still be £1500 per month and my NIC would have bought me the Additional State Pension.
How on earth do companies get away with this...
Let others be warned!0
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