GMP, COD and Single Tier Pension

hyubh

greenglide wrote: »

But presumably you can, incorrectly IMHO, stretch it to include indexing of the GMP?

Not sure taking a quote out of context from someone who's never been the Minister for Pensions (or more senior) is particularly enlightening really...

Does the government pension schemes not gave some sort of special relationship whereby the indexation of the GMP is done by the scheme rather than with the state pension?

Nearly a year old, but see p.6:

http://www.local.gov.uk/documents/10180/11913/LGPC+Update+-+July+2014.pdf/73bca442-fe1f-4e80-9c77-fc2245ba5ba6

Would appear still under discussion - see p.7:

http://www.lgpsregs.org/images/Bulletins/Bulletin127.pdf

xylophone

Does the government pension schemes not gave some sort of special relationship whereby the indexation of the GMP is done by the scheme rather than with the state pension?

Not exactly - it is simply that rather than indexing only up to GMP age, they index to state pension age - used to be the same thing of course, but no longer.

http://forums.moneysavingexpert.com/showthread.php?p=68475171#post68475171 post 24

What happens after SPA in single tier, who knows?

hyubh

Martin51 wrote: »

Well, the first was by Steve Webb, who became Pensions Minister!

And the second wasn't...

Not the subject of what's been discussed here,

Exactly...!

and to the once-again dismissive attitude by bureaucrats of accrued rights.

I thought your beef was with politicians...?

Martin51

Not the subject of what's been discussed here,

This was taken out of context. You omitted the text following that, which sought to establish the importance of the GMP in its own right.

I thought your beef was with politicians...?

My beef is with any bureaucrat! Bureaucrats can include politicians -- 'The definition of a bureaucrat is a person with an official position in the government'

zagfles

greenglide wrote: »

From 6/4/2016 you require ten years contributions to get anything irrespective of any Starting Amount based on either old rules or new rules. The MQP test is applied separately a bit like one of the old rules in the past - 20% or 25% to get anything?

This has been discussed before and there are some statistics around as to how many people are expected to fall foul of this in the early years.

So basically the white paper is wrong when it says "All the elements of an individual’s contribution history will be consolidated into a single amount – the foundation amount".

Clearly two amounts are needed from everyone's pre-change NI record, the foundation amount and the number of qualifying years.

zagfles

Martin51 wrote: »

Here's a comment from the late Pensions Minister:

"We are very clear that all accrued rights should be honoured: a pension promise made should be a pension promise kept. Therefore we would not make any changes to pension rights that have already been built up. I have confirmed that I regard accrued index-linked rights as protected.”

Steve Webb (LibDem), now Pensions Minister, in a letter dated 12 April 2010

Posted on the OPA's (opalliance) website

On the same website is posted:

“Indexation of pensions in payment is an established part of pensions legislation. The Conservative Party has no plans to change the current index-linking of public sector pensions in payment. We agree with the view that the right to indexation of pensions already accrued is part of the accrued pension rights and those rights will be protected.”

Philip Hammond, 27 April '10, (the then Conservative Shadow Chief Secretary to the Treasury)

The latter statement refers explicitly to PUBLIC sector pensions. You will note a reference to 'pensions in payment' and a reference to 'pensions already accrued'. These are not the same thing, but Hammond uses BOTH in the same statement.

Five years is a LONG time in politics!

Well the switch from RPI to CPI for indexation is probably of greater significance to more people, as that applies not just to the GMP, which for most people will be a small element of their pension, but also to the statutory requirements for indexation of the excess above GMP.

Some people are lucky enough to have RPI hard wired into their scheme rules. Though if the IFS get their way RPI will be history soon!

http://www.theguardian.com/business/2015/jan/08/scrap-flawed-rpi-says-ifs-boss

greenglide

zagfles wrote: »

So basically the white paper is wrong when it says "All the elements of an individual’s contribution history will be consolidated into a single amount – the foundation amount".

Clearly two amounts are needed from everyone's pre-change NI record, the foundation amount and the number of qualifying years.

You could interpret as meaning that but equally you could look upon it as meaning that the number of qualifying years continues to increase both before and after nSP while the Starting Amount is a one off calculation which draws the whole old system to a close (well sort of)

greenglide

Some people are lucky enough to have RPI hard wired into their scheme rules. Though if the IFS get their way RPI will be history soon!

My ongoing scheme is ongoing RPI!

What, exactly, they would do if the official statistic ceased to exist doesn't bear thinking about.

Martin51

Well the switch from RPI to CPI for indexation is probably of greater significance to more people, as that applies not just to the GMP, which for most people will be a small element of their pension, but also to the statutory requirements for indexation of the excess above GMP.

Probably, but those new pensioners under single tier will be denied ANY protection on their pre-88!

Though if the IFS get their way RPI will be history soon!

Yes -- they recommend CPIH, which includes housing costs (unlike CPI). Presumably CPIH likes between CPI and RPI?