State Pension - 'Additional Pension' Query

datostar

My SRP commenced on 17 December 2011 and as well as the basic pension and a small Graduated Pension element from contributions made in the 1960's, it includes £0.01 per week (yes, 1p!) Additional Pension. This is calculated as follows:- Additional Pension of £91.15 on earnings from 6/4/78 to 5/4/97 less Contracted-Out deduction of £91.14 from employer's pension scheme.

The Pension Service has advised me that w/e/f 17/4/12 my Additional Pension will be £3.84 instead of £0.01. This is an unexpected little bonus. Am I right in thinking that the £91.15 quoted has been uprated to reflect the general increase in pension payments (5.2% next tax year) but the Contracted-Out deduction of £91.14 remains the same indefinitely?

xylophone

http://www.opalliance.org.uk/increases.htm
For GMP read COD.
For RPI read CPI.

datostar

xylophone wrote: »

http://www.opalliance.org.uk/increases.htm
For GMP read COD.
For RPI read CPI.

Aaargh! Not at all straightforward. My occupational pension already suffered a slight reduction (approx.£39 p.a.) on my 65th birthday due to the 'National Insurance Modifications Regulations' which I presume was a one-off. I'll have to trust the respective parties to get it right, I fear. Thanks for the link.

xylophone

http://www.cspa.co.uk/
See under outstanding CS pension issues....

Also a reply to someone who queried the deduction:



"MINISTRY OF DEFENCE
FLOOR 5 ZONE B MAIN BUILDING
WHITEHALL LONDON SW1A 2HB
Telephone: 020 7218 9000 (Switchboard)

THE RT HON ANDREW ROBATHAN MP
MINISTER FOR DEFENCE PERSONNEL WELFARE AND VETERANS
Our ref: xxxxxxxxxxxxxxxx 11 August 2011

Thank you for your recent letter, signed by a member of your staff, enclosing correspondence from your constituent, Mr xxxxx xxxxxx xxxxxxxx xxxxxxxxx xxxxxx, about the reduction in his Armed Forces Pension under the National Insurance Modification rules.


The reason for the abatement to Mr xxxxxxxx pension goes back to 1948 when the National Insurance (NI) Scheme was made compulsory for all employed personnel.

When flat rate benefits were introduced, the Government took the view that, to avoid over-provision of pension benefits, account should be taken of other benefits payable at the State Retirement Age (SRA).

All employers with occupational pension schemes were required to modify their schemes to take account of the contributions and benefits payable under the NI Scheme.

As a result, on reaching SRA, the Armed Forces Pension Scheme (AFPS) pension of Service personnel who enlisted on or after 1 July 1949 is reduced by £0.8708 per annum for each complete year of reckonable Service between 30 June 1949 and 1 April 1980. This reduction is referred to as the NI Modification rules.

In addition pensioners, like. Mr xxxxxxx, who also contributed to the Graduated Pension Scheme (GPS) whilst in the Service during the period 3 April 1961 to 5 April 1975, have their Armed. Forces pension reduced by the amount of the basic graduated pension (also payable at SRA as State benefits) earned by their graduated contributions. This reduction is known as a GPS abatement.

Officials have confirmed that Mr xxxxxx AFPS pension has been correctly reduced in line with the rules governing both the NI and GPS Schemes at the time of his Service. I can assure both you and Mr xxxxxxx that the reductions applied are not as consequence of him having paid insufficient NI contributions during his Armed Forces Service. However, it is also the case that the State pension Mr xxxxxx has been receiving since attaining SRA on 10 July 2011 will have been enhanced by the contributions he made to the NI and GP Schemes.

************

I hope this reply is helpful and explains the position"


As I understand it, these rules apply to a number of what you might term "State" pensions.

datostar

Thanks again - that seems to cover it exactly. Looks like they got me for 15 years of abatement but miss out on the Graduated Pension element as I wasn't in their scheme for my first 3 years of working life. Thankfully, for younger people, this all stopped for service after 1980. It seems an awful lot of work for pensions administrators over quite trivial amounts.