pension calculation error

renege

The quoted pension at age 60 was £17,509 pa with £700 extra on the lump sum.

xylophone

renege wrote: »

The quoted pension at age 60 was £17,509 pa with £700 extra on the lump sum.

Presumably it is possible that this too was a miscalculation?

Zelazny

renege wrote: »

The quoted pension at age 60 was £17,509 pa with £700 extra on the lump sum.

That's a heck of a drop - from £17.5k to under £2k. Iirc, FAS aims to pay 90% of the benefits that you were due, so something really isn't right here.

renege

Yes - the final pension amount for aged 60 could also be a miscalculation. I am still waiting for calculation details and a response to my query from the trustees....it takes them a long time to respond ....but my pension payment has already been reduced.....very quickly.

agrinnall

Zelazny wrote: »

That's a heck of a drop - from £17.5k to under £2k. Iirc, FAS aims to pay 90% of the benefits that you were due, so something really isn't right here.

Not sure where you got under £2K from.

OP, just so we get the figures right:

£17,509 had you waited until 60 to retire

£17,442 is what you were originally told you would get for retiring 4 months early

£16,638 is what they are now saying you will get for retiring 4 months early

The original reduction of £67 a year seems like a pretty low figure for 4 months, the revised reduction of £871 a year seems on the high side but I'm not sure how the calculations are done so it could be right.

Zelazny

agrinnall wrote: »

Not sure where you got under £2K from.

OP, just so we get the figures right:

£17,509 had you waited until 60 to retire

£17,442 is what you were originally told you would get for retiring 4 months early

£16,638 is what they are now saying you will get for retiring 4 months early

The original reduction of £67 a year seems like a pretty low figure for 4 months, the revised reduction of £871 a year seems on the high side but I'm not sure how the calculations are done so it could be right.

Arg - that's what I get for posting early in the morning. I got confused.

Looking at the PPF early retirement tables as an example (and probably not a very good one - the PPF has very generous early retirement provisions), we see that for 1 year early, the factor would be 0.980. So for 4 months early, it would be around 0.993. This would make your pension at 4 months early: 17509 x 0.993 = £17,386.44, so £17,442 definitely looks too high.

For most scheme, the reduction is more like 6% per year early, so would be 2% for 4 months early, giving: £17,158.82.

They've given you a reduction of (1 - 16638/17442) = 4.61%, which would equate to 13.83% per year early, which definitely sounds too high.

In short, I'm not sure what's happening here - the only thing that makes sense is that the original calc was wrong :S

xylophone

http://www.pensionsadvisoryservice.org.uk/media/82768/mistakesandoverpayments.pdf

renege

I would like to give an update on my dispute with my pension scheme who provided me with incorrect pension information which I used to make my decision to retire early:

• 12 weeks after my letter requesting the details of the calculation error and my appeal to the trustees to reconsider the decision to reduce my pension I received a response from the trustees telling me they have a legal right to make such mistakes and are not required to 'stand by them' or be held responsible. They asked me to provide evidence that I was disadvantaged by the reduced pension. There was no apology and no explanation of the error. I replied, with the help of The Pension Advisory Service, with a letter stating that I had made a life changing decision based on the information from the pension scheme and that the reduction will effect me for the rest of my life. I have no other income.
• 4 weeks later I received a request for my Income and Expenditure to show my decision to take the pension early based on the figures quoted at the time and the subsequent hardships created by the reduction. I have sent the letter with details this weekend. I am flabbergasted that the trustees are now going to 'means test' the pension provision which is in fact a final salary scheme. The Scheme is that of a worldwide bank - it is their mistake and yet their 'clever' lawyers and bankers are seemingly changing the rules to suit their game.
• I am surprised given the current level of bad feeling towards bankers that they are choosing to 'bully' their pensioners in this way. I wait again for a response. This has been going on for 4 months and is still not resolved.

xylophone

Have the figures been provided to show how the mistake occurred?

robmatic

renege wrote: »

I would like to give an update on my dispute with my pension scheme who provided me with incorrect pension information which I used to make my decision to retire early:

• 12 weeks after my letter requesting the details of the calculation error and my appeal to the trustees to reconsider the decision to reduce my pension I received a response from the trustees telling me they have a legal right to make such mistakes and are not required to 'stand by them' or be held responsible. They asked me to provide evidence that I was disadvantaged by the reduced pension. There was no apology and no explanation of the error. I replied, with the help of The Pension Advisory Service, with a letter stating that I had made a life changing decision based on the information from the pension scheme and that the reduction will effect me for the rest of my life. I have no other income.
• 4 weeks later I received a request for my Income and Expenditure to show my decision to take the pension early based on the figures quoted at the time and the subsequent hardships created by the reduction. I have sent the letter with details this weekend. I am flabbergasted that the trustees are now going to 'means test' the pension provision which is in fact a final salary scheme. The Scheme is that of a worldwide bank - it is their mistake and yet their 'clever' lawyers and bankers are seemingly changing the rules to suit their game.
• I am surprised given the current level of bad feeling towards bankers that they are choosing to 'bully' their pensioners in this way. I wait again for a response. This has been going on for 4 months and is still not resolved.

Would a difference of £800 really make any odds in your decision to retire?