FAS/PPF Pension

casey_junior

I have a small pension coming from the FAS shortly, they tell me that only the part of this which was paid into after April 97 (about 3 years) will be indexed linked, the other 10-11 years not increasing. Is there a good reason for this?
Also, is it possible to get a transfer value from the FAS to increase the value of my pension pot to take out an annuity or drawdown?

hugheskevi

I have a small pension coming from the FAS shortly, they tell me that only the part of this which was paid into after April 97 (about 3 years) will be indexed linked, the other 10-11 years not increasing. Is there a good reason for this?

Indexation is only a statutory requirement on post 1997 accruals in Defined Benefit pensions - many schemes index pre-1997 accruals either on a discretionary basis, or as part of scheme rules, but there was no statutory requirement. FAS matches the statutory minimum requirements with regard to indexation.

Also, is it possible to get a transfer value from the FAS to increase the value of my pension pot to take out an annuity or drawdown?

No.

casey_junior

Further to this post, the FAS informed me in July that they would be paying this pension from my NRD in late December (28th), namely £1972 gross with payments after April 97 increasing with inflation up to 2,5%, those before with no indexation.
Today I've received a correspondence from the Trustees of the scheme telling me that I'll be getting a pension from them of £1709 pa, approx 30% of which is indexed linked to RPI max 5%, the rest to max 3% RPI,as well as a lump sum of £2810.
Can anyone explain what's going on here?, someone's got it wrong?

hugheskevi

Do you know if your scheme is one of the ones which have secured annuities with an insurer for the members, or whether they will be sending all the scheme assets to FAS (administered by the PPF)?

My take on what is going on:

If the scheme is going to purchase annuities, then you will get two pensions, one from the scheme based on what can be afforded from the remaining scheme assets and one from the FAS topping up the scheme payment to the FAS guarantee levels.

Initially the payment will come from the scheme whilst it winds-up, then from an insurer once annuities are bought.

If the scheme is transferring assets to the FAS/PPF you will initially get the pension from the scheme and also from the FAS/PPF, and later it will become a single payment from the FAS/PPF.

The scheme pension will be based on scheme rules, any annuities bought should closely match scheme rules but might be a bit different. Meanwhile, the FAS payment is based on FAS rules.

casey_junior

Sorry for the delay as its been difficult to get any information from either the Trustees or FAS, due to holidays (not mine).

hugheskevi wrote: »

Do you know if your scheme is one of the ones which have secured annuities with an insurer for the members, or whether they will be sending all the scheme assets to FAS (administered by the PPF)?

There has never been any mention of annuities in any correspondence, so I'd imagine it's a transfer of funds.


My take on what is going on:

If the scheme is transferring assets to the FAS/PPF you will initially get the pension from the scheme and also from the FAS/PPF, and later it will become a single payment from the FAS/PPF.

The scheme pension will be based on scheme rules, any annuities bought should closely match scheme rules but might be a bit different. Meanwhile, the FAS payment is based on FAS rules.

This is what I think the Trustees were implying in December, but when I told them about the letter from the FAS dated June they didn't seem to know what was going on.I contacted FAS and was told a payment has been authorised but were unable to say how much.
I've now been told by the trustees that they haven't contacted FAS yet,but

baring in mind that FAS may already be paying your full entitlement (therefore nothing would be payable from the Plan) please complete and return your documents

I would have thought that as the scheme hasn't been wound up yet, the trustees would have responsibility to pay their share to be topped up by FAS, but it seems like right hand doesn't know what left hand is doing.
I'm waiting in hope, hope that they'll both pay me! :rotfl:

casey_junior

If I may come back to this with the salient points.
I have a small pension for an employment between 1988 and 2001 which has been in windup since 2001 and which was to commence payout at the end of December 2011.
In July 2011 the FAS/PPF told me that they would be paying me a pension of £1970 pa, contributions pre 1997 not indexed, post 1997 indexed at max 2.5%, full stop, which would mean a max annual increase of about 0.8% on the total pension.
In mid December, I was told by the pension administrators/trustees that they would be paying a pension (in respect of an estimated capital value of £37000) of £1709 pa, indexed at max 5% on c30% and max 3% on 70%. There would also be a cash sum of £2800 and a spouses pension of 50%.
When I eventually was able to contact the trustees, they couldn't tell me who would be paying my pension.
This week I got a pay advice from FAS/PPF, so now I know that the administrators won't be paying, which disappointed me because on a rough calculation I found that the admin pension was by far a better deal than FAS/PPF.
I also got an email from the admins. saying they hadn't contacted FAS/PPF, but if FAS/PPI were paying, then the admins wouldn't be.
This is from a company "the worlds best pension plan administration provider".
I think this only reinforces my belief that pensions are only for the benefit of pension companies, financial advisors and the state.
Comments welcome.

jamesd

Mercer seems to have a decent enough reputation in general but don't seem to be excelling in customer service in your case.

Your root problem was undoubtedly the employer and perhaps the trustees in not paying in enough money, not the FAS, PPF, pension companies, financial advisors or state. Those are mostly trying to pick up the pieces for the employer's failing.

Though the state can be blamed for helping to increase life expectancies and make it harder for employers to keep up - a frozen fund for a bankrupt employer that was properly funded could have been made insufficiently funded just by life expectancy changes.

Zelazny

casey_junior wrote: »

If I may come back to this with the salient points.
I have a small pension for an employment between 1988 and 2001 which has been in windup since 2001 and which was to commence payout at the end of December 2011.
In July 2011 the FAS/PPF told me that they would be paying me a pension of £1970 pa, contributions pre 1997 not indexed, post 1997 indexed at max 2.5%, full stop, which would mean a max annual increase of about 0.8% on the total pension.
In mid December, I was told by the pension administrators/trustees that they would be paying a pension (in respect of an estimated capital value of £37000) of £1709 pa, indexed at max 5% on c30% and max 3% on 70%. There would also be a cash sum of £2800 and a spouses pension of 50%.
When I eventually was able to contact the trustees, they couldn't tell me who would be paying my pension.
This week I got a pay advice from FAS/PPF, so now I know that the administrators won't be paying, which disappointed me because on a rough calculation I found that the admin pension was by far a better deal than FAS/PPF.
I also got an email from the admins. saying they hadn't contacted FAS/PPF, but if FAS/PPI were paying, then the admins wouldn't be.
This is from a company "the worlds best pension plan administration provider".
I think this only reinforces my belief that pensions are only for the benefit of pension companies, financial advisors and the state.
Comments welcome.

How much pension were you expecting if the scheme did not go into wind up?

casey_junior

Zelazny wrote: »

How much pension were you expecting if the scheme did not go into wind up?

The Preserved Benefit Statement at date of leaving (May 2000) was
Basic Pension preserved £1544 pa (inc GMP £599)
Widows Pension £772 pa
Basic Cash Sum Preserved £2072

What I was expecting was something transparent and straightforward, instead I get told by the admins to expect from them the reduced interim level of benefit as in the above post, with additional benefit maybe being paid by FAS.
To be then paid by FAS their projected amount which falls short of the admins figure, I find myself thing that I've been shortchanged.