s32 buyout - GMP value questions

bruin_bear

Hello
In July 1999 my old contracted out company scheme was wound up and my pension fund was transferred to a s32 buyout with Scot. Eq. (now Aegon). I am 55, so I think my State Pension Age ("SPA") is now 66 rather than 65 when I took out the policy. I am married.

According to the Schedule, the transfer value at 1999 was £62,563.91 with reserved contributions of £16,084.47 which "are reserved for a GMP of £850.20 revalued to SPA of £4,312.52 plus a spouse's GMP of £425.10 revalued to SPA of £2,156.26. The rate of revaluation on GMP is 7.00%."

I enquired about the transfer value recently and was told that the current value is £45,436.43 (non reserved unit funds) and £26,537.27 (reserved unit funds). I was also told that I couldn't transfer the pension to another scheme as "the transfer value calculated does not meet the cash equivalent of the GMP".

My questions are:
1. Is the GMP of £4,313.52 fixed, or was that just an estimate (at 1999).
2. Will my GMP be payable at age 65 or 66?
3. Will I get any pension over and above the GMP (i.e. from the non-reserved funds)?
4. Is the spouse pension only payable on my death (i.e. we don't get both).

Sorry for the dumpty questions but I hope someone can explain it for me!

Thanks

xylophone

http://www.pensionsadvisoryservice.org.uk/workplace-pension-schemes/sections-32s
"A transfer cannot proceed if there is a Guaranteed Minimum Pension (GMP) and the transfer value is not sufficient to meet the cost of the GMP, unless the new provider is willing to meet the shortfall".Post 14 on this thread https://forums.moneysavingexpert.com/discussion/3663731 might be of interest.
http://www.pensions-express.co.uk/pex.chi/news.html?id=241
With regard to age at which gmp is payable, this article is from two years ago but as far as I know, the gmp payment age is still 60 for women and 65 for men- however I understand that the government has recently published a consultation document.

bruin_bear

Thanks for the links. Having read through them, I am still very unclear as to how much (if any) of the non-reserved funds will be left after paying the GMP (and how much extra pension that would buy). Is there are way to find out? If, when I am 65, Aegon say "sorry we needed all of the non-reserved units to pay the GMP", how would I be able to check that? Presumably there must be rules in place, otherwise pension companies wouldn't bother doing anything other than paying the GMP.

xylophone

http://www.jameshay.co.uk/DocumentView.aspx?DocumentID=196
This might clarify although the rpi reference might now need to be cpi depending on the particular terms of your policy?
Why not put your questions in writing to Aegon?

Zelazny

bruin_bear wrote: »

My questions are:
1. Is the GMP of £4,313.52 fixed, or was that just an estimate (at 1999).

Fixed.

bruin_bear wrote: »

2. Will my GMP be payable at age 65 or 66?

65 based on the current rules. I don't think it's likely to change, but you never know.

bruin_bear wrote: »

3. Will I get any pension over and above the GMP (i.e. from the non-reserved funds)?

I'm afraid I don't know how these things work. From what I've read, I suspect that the funds will be used to provide GMP first, and anything left over would provide additional benefits. This means that if the funds are not sufficient to provide the GMP, you still get the GMP, but no extra. Do please bear in mind that I'm no expert though, and might be wrong.

bruin_bear wrote: »

4. Is the spouse pension only payable on my death (i.e. we don't get both).

Correct - the spouse pension is paid after you die.