Survivor's pension - define "half"?

yabbadoo

My Company pension scheme will provide half my pension to my widow when I pop my clogs. But, it's unclear to me what my Company pension actually is, and a further complication is that as of next April, the scheme rules change.

I retired early. My pension was straightforward until I reached the age of 65, increased annually in line with RPI, capped at 5%.

In my 65th year, they told me that approx 1/3rd of my pension was GMP, and capped at 3% (GMP increases paid each April) and the remainder was Co pension, increased annually each November in line with RPI. (The Co pays the entire sum less tax, there's no breakdown on my payslips).

First question - when I die, will my widow get half of the total currently in payment, or will the GMP element be deducted before halving?

As I said - as of next April the scheme rules change. Currently a "final salary" scheme, it's being closed to new members. Further, new pensions will only rise in line with CPI (BUT pensions already in payment will continue to rise in line with RPI).

Second question - re the half pension payable to my widow. Would that be classified as a "new" pension (even though it's half of an existing pension)? - if new, it would only get CPI rises. I can make a good case for both "old" and "new" but what's the correct one, legally?

Supplementary - is all or any part of the GMP element tranferable to my widow on my death? I joined the scheme over 40 years ago, long before the qualifying date for GMP.

Questions I SHOULD ask of our pension trustees, but as they involve two people they're not known for responding factually (data protection!)

Andy_L

Depends on the scheme rules. Consult a copy, ask the trustees, the pension administrators & your HR people

Debt_Free_Chick

yabbadoo wrote: »

My Company pension scheme will provide half my pension to my widow when I pop my clogs. But, it's unclear to me what my Company pension actually is, and a further complication is that as of next April, the scheme rules change.

I retired early. My pension was straightforward until I reached the age of 65, increased annually in line with RPI, capped at 5%.

In my 65th year, they told me that approx 1/3rd of my pension was GMP, and capped at 3% (GMP increases paid each April) and the remainder was Co pension, increased annually each November in line with RPI. (The Co pays the entire sum less tax, there's no breakdown on my payslips).

First question - when I die, will my widow get half of the total currently in payment, or will the GMP element be deducted before halving?

It's normally half of your pension at retirement date, then increased in the same way your own pension has increased. If you took cash at retirement, the pension exchanged is usually your own pension only i.e. taking cash did not reduce the widow's pension.

The widow's pension will include her GMP, which is half of your GMP.

As I said - as of next April the scheme rules change. Currently a "final salary" scheme, it's being closed to new members. Further, new pensions will only rise in line with CPI (BUT pensions already in payment will continue to rise in line with RPI).

Second question - re the half pension payable to my widow. Would that be classified as a "new" pension (even though it's half of an existing pension)? - if new, it would only get CPI rises. I can make a good case for both "old" and "new" but what's the correct one, legally?

Depends on the Rules of the scheme and how the change to CPI has impacted existing "contingent" pensions. Widows' pensions are contingent as they're dependent on you dying.

Supplementary - is all or any part of the GMP element tranferable to my widow on my death? I joined the scheme over 40 years ago, long before the qualifying date for GMP.

Half of your GMP goes to your widow - but it's included in her widow's pension, not in addition

Questions I SHOULD ask of our pension trustees, but as they involve two people they're not known for responding factually (data protection!)

These are questions that should go the administrators. Trustees don't have the skills & experience to undertake benefit calculations, so they delegate that role to those that do.

HTH