HSBC UK STAFF PENSION CLAW BACK on retirement

xylophone

It looks as though you are in a Final Salary Defined Benefit Scheme - you might find it difficult to get an IFA to sign off a transfer if so. Apart from that, it is not normally a good idea to give up a DB scheme with its inflation linked annual increases. http://www.icl-ifa.co.uk/2012/03/bad-advice-pension-transfers/

I must say that I was surprised to learn that HSBC still imposes abatement- it ended in our scheme years and years ago and in others too I suspect - I think the Police lost their version of it around 1980.

If you started work for HSBC back in 1982 and your scheme was contracted out, you will also need to have regard to the GMP rules once you reach State Pension Age.

http://www.opalliance.org.uk/increases.htm - your scheme pension may be linked to RPI but any govt. increases are now linked to CPI.

dunstonh

you might find it difficult to get an IFA to sign off a transfer if so

Pretty near impossible I would think given that the issue is not a problem but just the way it works. Plus, when you look at annuity vs defined benefit, you cannot imagine annuity coming anywhere near close.

Grumps52

Dear all
I have requested information regarding the Claw Back or abatement HSBC are imposing on my pension from the trustees but do not hold out much hope. It seems HSBC is one of only a few companies who still impose this penalty on the staffs pension, ok if your pension is £50K to lose £2k but my planned pension of £8k to be reduced in favour of HSBC by £2k to £6k in anticipation of me receiving a state pension in the future (which I have of course also contributed to)is quite frankly immoral-If there is anyone reading this who works for HSBC in the retail banking area and on a salary of £15k-£25K and is coming up to retirement you may receive a shock and a severe blow to your retire plans particularly in these highly uncertain times, please contact the trustees of the HSBC fund and also your union-we may be able to shame HSBC into doing something.

SMENI

Hi have just come across this, and found it interesting. I am ex HSBC and receive a pension. I took early retirement at 50, and when I reached 60, my pension payment was reduced with no explanation whatsoever (I paid married womans contribution NI so small amount only awarded at 60). I wrote to the Trustees and received a letter that was such gobbledegook,neither I nor my husband could understand it. Wrote back again, and managed eventually to ascertain that reduction was due to receipt of state pension and my HSBC pension had merely been "enhanced" for 10 years by the "goodness of their hearts!" at HSBC. So, whatever I had planned to do with my pension after 60, I had to take into account I was receiving slightly less than expected - I do not remember signing anything in connection with this, neither was I advised at anytime that this would happen - small print? When I speak to people about this, it seems I'm the only one it has happened to!! Did you get anywhere with your query?

xylophone

https://forums.moneysavingexpert.com/discussion/4085527
post 11

kidmugsy

Obviously HSBC would have been wiser to scrap the abatement and bunged up the employees' contribution to pay for it.

15weeksleft

I am also retiring from the DBS HSBC pension scheme in March 2013 after 26 years service and I am shocked to find that I too will have clawback on my pension immediatelty as I reach the age of 60 in February 2013 and then another reduction when I receive my state pension in January 2016. My initial forecast on the intranet stated my annual pension would be £5823 with a clawback of ££1106 at State Pension age but on receiving the paperwork to start the claim procedures it states that the clawback is taken straight away as it is a design feature of the old Midland Bank Pension Scheme and applies to all members who joined after 1/1/75.
I am not sure by how much it will be reduced further in 2016.
I think the intranet quotations are very misleading and even a member of staff at the administrators said it was badly worded. I don't think we have much hope in changing any of this but think it is disgusting.

CRH272727

Grumps and fifteen weeks left. I am retired Midland/HSBC. I came across this thread when looking for another pensions issue for a fellow pensioner who may re-marry. The clawback has been part of the rules since legal changes in 1975 and is mentioned in old Pension booklets and staff handouts. It would have been part of the terms and conditions when you joined and I believe it is so as it is a non contributory pension. I have staff pensions documents/handouts from 1983 and 1994 that cover it quite clearly. The 1983 one says "Our scheme provides pensions greater than the states additional earnings related pension and is accordingly contracted out of the earnings related part of the state scheme. The effect of this is that you pay lower National Insurance contributions and do not qualify for the state's additional pension." So the scheme you joined was contracted out you did not do anything specifically. I hope this helps you.

hyubh

CRH272727 wrote: »

I have staff pensions documents/handouts from 1983 and 1994 that cover it quite clearly. The 1983 one says "Our scheme provides pensions greater than the states additional earnings related pension and is accordingly contracted out of the earnings related part of the state scheme. The effect of this is that you pay lower National Insurance contributions and do not qualify for the state's additional pension." So the scheme you joined was contracted out you did not do anything specifically.

That's not saying anything about abatement though, which was the point at issue (i.e., a reduction in the Midland/HSBC pension corresponding to the basic - not second - state pension applicable).

jamesd

The abatement case is where a scheme deliberately pays out at a higher rate before state pension age, then drops to a lower rate once the state pensions could start (or could have at the time the rules were written). This good idea would let people retire before state pension age without having a lower income until the state pensions started. But many who don't know the reason for it end up thinking of it as a reduction rather than the initial short term boost it really is.