How much is my Guaranteed Minimum Pension.

Judesman

I am trying to ascertain how much my GMP is. I have received an employer's pension for a number of years and I have just received my State Pension calculation as I will be 65 this month. Because some future increases in my employer's pension will be the responsibility of the state I need to ascertain what my GMP is. My State Pension calculation refers to "Additional State Pension" £64.01 and then "Less Contracted Out Deductions" of £113.51. that I earned from an employer's pension scheme from 6.4.78 to 5.4.97. ( I don't understand that as I left my employer in 1992)

The lady from the Department for Pensions tells me that the figure for CODs £113.51 is the GMP but I will not get an increase on that because my Additional Stae Pension is only £64.01. I have calculated that at a annual 3% increase it would take 20 years before the ASP equalled the GMP and I would be entitled to an in increase. Can that be right? Can anyone help please?

RichandJ

Ask your employer's pension administrator how much your GMP is. It should be roughly equivalent to the COD for the time you were in a contracted out (of SERPS) occupational pension scheme.

GMPs ran from 6/4/78 to 5/4/97 when they were scrapped. They are, as the name suggests, a guaranteed minimum that the scheme must pay you (from state pension age). They are not in addition to your occupational scheme pension but will be part of it.

Your pension in payment, depending on the scheme rules, may, now you have reached SPA, be split into three different elements - Pre 88 GMP, Post 88 GMP & 'excess'. The scheme is obliged to increase the Post 88 by inflation up to a max of 3%. Increases on the Pre 88 are provided by the state & the scheme is not legally obliged to increase the excess, although it may do. It is of course possible that your scheme may have more generous increases than these legal minima, as ever it depends on the rules.

Hope this helps.

Judesman

Thank you for your reply Richard. Iwill ask my pension provider for my GMP.

If it is equivalent to COD and that is what the Dept. for Pensions suggested then, because my Additional State Pension is so much less it looks as though I will never get an increase in my GMP. The notes that accompany my pension advice state: "In some cases the State will not provide an increase on your GMP until the level of Additional Pension has reached your GMP". This will make a very big difference to future increases.

When I mentioned this to the lady from the pensions dept. She said " You do get quite a good pension from your employer". I reminded her that I had contributed to my company pension for all of my working life and that I considered that I was entitled to it!