GMP age for women

parcival

My wife was a member of a company money purchase pension scheme for about 6 years in the early 1990's. The scheme was contracted out.
In 1996 the company was sold and she elected to leave the pension where it was.

On her preserved benefits statement it has the following:
State Pension Age 60 (although now her state pension age is 65 and a bit)
Normal Retirement Date - 31/8/2020 (Age 65)
Guaranteed Minimum Pension at 31/8/2020 - £3700pa
Annual rate of increase in payment: 3% on £3700 from 6/4/2016 for life.

On her latest annual statement it simply provides a figure for the money purchase fund value together with an estimate of how much pension the fund might provide at age 65 - a figure of about £1700pa.

We have written to the administrators to clarify how all these figures and dates work in practice. They have said:

Because you were contracted out, the plan is obliged to pay a GMP at your GMP payment age which for a woman is aged 60.

They also say that if she is not in employment after the age of 60 the plan will be obliged, even though your normal retirement age is 65, under current legislation to being paying you your GMP.

They have said that they are liasing with HMRC to confirm the GMP payable at age 60.

Can anyone help unravel this and confirm the gist of it is correct. I must say we had not thought she would get anything at all until age 65.

xylophone

See http://www.pitmans.com/news/guaranteed-minimum-pensions-consultation-update
There is also this https://www.maturetimes.co.uk/campaigns/pensions-benefits/3439-steve-webb-confirms-women-to-lose-gmp-increase-on-pension.html

mania112

My understanding is that GMP age does not move in line with State Pension Age - The GMP age is based on State Pension age at the time the company pension was set up and does not move.

Seems curious though, how your statement shows a normal retirement age of 65.

xylophone

There is also this from Capita although it was written before the switch from RPI to CPI http://www.pensions-express.co.uk/pex.chi/news.html?id=241

Mrs_Mum99

Just curious, I too am affected by the GMP ruling as I have a section 32 buyout policy. From reading the above links, it appears that because my entitlement accrued before April 88 my index linking is paid by the state at my state pension age. I had no idea that the GMP pension was index linked and wondered how the state knows that I will have a GMP and how it pays the index linked element to me?
Thanks for any help!

xylophone

http://www.mycompanypension.co.uk/index.php?area=forumviewthread&zs=1&ft=149 might be of interest.

The DWP know about your gmp because of your national insurance record.

See also http://dl.dropbox.com/u/452108/20110217094333898.pdf

Mrs_Mum99

Thank you so much for that - it's a lot clearer now!