Has the flat rate pension been delayed or killed?

zagfles

dunstonh wrote: »

It is important not to mix up what has happened with contracting out via money purchase schemes and what happens with contracting out via defined benefit schemes. Some phrase but different in what it does.

The S2P top-up is/was exactly the same for occupational schemes, whether money purchase or final salary. Anyone on below £33k (in today's money) in a contracted out occupational scheme will get some S2P.

It was different for personal pensions, where the rules changed to give a bigger rebate for earnings in the LEL-LET band, and anyone earning above the LET (£14700 in today's money) wouldn't get any S2P. But those earning below the LET did get a S2P top-up based on the difference between earnings and the LET.

zagfles

jem16 wrote: »

I'm well aware of that.

What did youmean by "As far as I know that is only true for contracted out (SERPS only) schemes."?

It certainly doesn't mention it and I certainly haven't been building up any although it would be a pretty small amount as I'm near that top amount.

The "secondary earnings thresholds" are here for all years back to 2002, if you earned below that amount in that year and were in an occupational scheme you will get some S2P.

http://www.scottishlife.co.uk/scotlife/Web/Site/Adviser/TechnicalCentralArea/Rates&FactorsArea/EarningsLimits&NIReb/Lowandsecondaryearningsthresholds.asp

hugheskevi

When S2P was introduced, my understanding is that it was considered too administratively difficult to change all the rebates to reflect the new benefit structure - not least as that may well have entailed changing the Reference Scheme Test (the test as to whether benefits from schemes are good enough to be contracted-out) and all contracted out DB schemes having to be re-assessed.

Therefore, the contracted-out rebates continued to be based on the old SERPS structure, with any extra S2P due paid as part of the State pension, as zagfles says.

jem16

zagfles wrote: »

What did youmean by "As far as I know that is only true for contracted out (SERPS only) schemes."?

Wikipedia suggested there were different types of contracted out occupational schemes and as the Teachers' Pension Scheme specifically mentioned contracted out of S2P, it seemed to suggest it was different.

The "secondary earnings thresholds" are here for all years back to 2002, if you earned below that amount in that year and were in an occupational scheme you will get some S2P.

http://www.scottishlife.co.uk/scotlife/Web/Site/Adviser/TechnicalCentralArea/Rates&FactorsArea/EarningsLimits&NIReb/Lowandsecondaryearningsthresholds.asp

In most cases I was just a little over those thresholds so won't be building up any S2P which my state pension forecast confirms.

However it is interesting that some teachers may still be getting some S2P ( although very little unless part-time and not at the top of the scale) which is not what the TPS or STSS says.

Thank you for the insight.

coastline

gadgetmind wrote: »

I notice that the DWP's state pension forecasting is now working again, with the previous message saying "ixnay 'cos it's all changing" now missing in action.

Do peeps think they have delayed this for a rethink or if it's now doomed?

a few links..

http://www.ft.com/cms/s/0/a8a41abc-00d4-11e2-9dfc-00144feabdc0.html#axzz2CnJTBuiS

http://www.engagedinvestor.co.uk/trustee-briefing-state-pension-reform/1469259.article

http://www.pensions-insight.co.uk/playing-party-games-with-pensions/1469370.article

zagfles

jem16 wrote: »

Wikipedia suggested there were different types of contracted out occupational schemes and as the Teachers' Pension Scheme specifically mentioned contracted out of S2P, it seemed to suggest it was different.

Yes the wiki entry is a bit confusing, I think it's trying to say occupational schemes can only contract out of the SERPS-equivalent part of S2P, whereas personal pensions could opt out of the whole lot (other than the top-up if earnings below the LET).

In most cases I was just a little over those thresholds so won't be building up any S2P which my state pension forecast confirms.

They seem to be giving even less information in the forecast than they did before - just a total for the additional pension with no clue at all how it's worked out. In the past they did at least show the contracted out deduction.

There should be an option to get a full calculation - I'm trying to understand why mine doesn't seem to have gone up at the same rate as earnings revaluation. I had a few years contracted in, then contracted out to a personal scheme, then to a final salary scheme. I think it might be to do with the mismatch between the contracted out deductions and SERPS pre 1997, don't think the COD necessarily matches the SERPS exactly...

jem16

zagfles wrote: »

I think it might be to do with the mismatch between the contracted out deductions and SERPS pre 1997, don't think the COD necessarily matches the SERPS exactly...

Well good luck with that!

My state pension forecast shows Additional Pension due of £0:00 so I don't think I'll worry about it.

gadgetmind

jem16 wrote: »

My state pension forecast shows Additional Pension due of £0:00 so I don't think I'll worry about it.

In 2009, my wife had "Payable Additional Pension" of 43p. By 2010, they'd decided to drop this to 0p.

How it can it backwards?

grey_gym_sock

perhaps they deduct the administrative costs of producing pension forecasts.

gadgetmind

grey_gym_sock wrote: »

perhaps they deduct the administrative costs of producing pension forecasts.

Knowing the civil service, that would be £000s per quote!