Totally confused by Contracted Out Deduction Letter

SeekTruth

howy22 wrote: »

Have just spoken with my pension provider who have confirmed that the GMP element is revalued using Section 148.

Does this suggest DWP are using the wrong COD figure?

Yes, it sounds to me as though the DWP have the wrong figure - and it is possibly making a difference to your pension.

I think the HMRC are responsible for calculating the 'official' GMP/COD figure. It sounds as though in 2012, for whatever reason, HMRC calculated the wrong figure, and so, presumably, advised DWP the wrong figure. In 2013, HMRC have corrected their calculation - I've no idea why they got it wrong in the first place and what caused them to recalculate in the second place. I don't know whether HMRC will automatically give DWP the new figure and it will all sort itself out, or whether you need to do anything to prompt HMRC to give DWP the information.

Can I show my ignorance here? You refer to receiving a HMRC (NI Contributions) statement in both 2012 and 2013. Are these statements that you explicitly requested? I'd be surprised if you received one a year automatically, so is there any indication on the 2013 statement as to why it has been issued?

xylophone

When you became eligible for state pension did you receive a letter from your Occupational Pension Administrator along the following lines:-

Dear Mr Howy,

Anyco Pension Fund

We refer to your pension paid by Anyco Pension Fund.

We have now received confirmation from HMRC of the amount of GMP that is payable from your 65th birthday.

The GMP elements of your pension increase in payment at different rates to your main fund pension. We therefore detail below the revised split of your pension and the future increases that you will receive from the Fund.

Pre 1988 GMP £ xxx per annum No Increase from the Fund. Increase may be provided by the State and paid with your State pension.

Post 1988 GMP £yyy per annum Increase in line with CPI up to a maximum of 3% each year. Any increase in excess of 3% will be provided and paid by the State

Fund Excess Pension £zzz per annum In line with the (whichever index applies to your fund)

If so, this should give you your position at SPA as far as your OPA is concerned.

If you add together xxx and yyy and divide by 52 what figure do you come up with?

Is it £98.82?

howy22

Hi SeekTruth,

I've not requested either of the HMR valuations, but this years appeared not long after I had queried an annual pension increase with my occupational pension provider. I'm now wondering whether my query prompted a discussion with HMR and the outcome was a revaluation downwards.

I've spoken with HMR and DWP on at least 3 occasions but they say their figures are correct and tell me to query it with the other agency. They say they don't need to communicate with the other party as they have common IT systems !!!

Armed with more informed information I may have another go.

howy22

Hi xlophone,
I had requested a breakdown of my occupational pension for this year and received such a statement showing Pre 88 GMP and Post 88 GMP.

The summation of the 2 elements gives £98.82/wk.

xylophone

I think that you are going to have to write (recorded delivery) to DWP enclosing a copy of the HMRC letter you have recently received and requesting an explanation of the COD discrepancy.

howy22

Success :T

Had one final attempt with DWP after your comments. They have now admitted they are using the wrong figure and will issue a new statement.Apparently the new figure had been input by HMR back in February.

Thank you all once more, without your advice I would probably have walked away in frustration.

xylophone

Success

Had one final attempt with DWP after your comments. They have now admitted they are using the wrong figure and will issue a new statement.Apparently the new figure had been input by HMR back in February.

Deep joy - as Stanley Unwin would have said....:beer:

joyce341

At last found someone else with this,I joined the contracted out scheme which Margaret thatcher brought in,then a few years ago ,about 2006 everyone in contracted out recieved a letter,saying if they wish to remain contracted out,they must write a letter stating this,if they did not,they would automaticaly be contracted back into the government scheme,I wrote saying i wished to stay in the opting out scheme,I only get a one of payment each year of £230 equal to about £4.40 pw,then i noticed that my breakdown for state pension for at least four years,say i get over £9 a week private pension,so i phoned,pension service,pension credit,inland revenue after a morning going around in circles,the inland revenue gave me this answer,if i had not opted out,i would be receiving over £9 a week and this is the figure they use in calculating my pension,not my real figure of £4,40 so lose about £5 a week which brings me below pension credit level and get about £2 just over pension credit,I am 65 this year,at least my false figure is only just over £9 not £130 something a week,how can they get away with this.

xylophone

below pension credit level and get about £2 just over pension credit,

But ironically, being eligible for guaranteed pension credit gives you automatic entitlement to housing benefit and council tax benefit which is probably worth rather more than £4.60 a week?
https://forums.moneysavingexpert.com/discussion/4117291 post 21

howy22

I have another query relating to COD.
After attaining state pension age does the COD get revalued each tax year, along with ASP.