Barclays Final Salary pension GMP/Excess revaluation & Anti-franking

MikeFloutier

This sounds good SnowMan. Did you mention TPAS's involvement to your Scheme or was it that, armed with their support, you were able to convince your Scheme? Either way it's a result, you must be pleased; well done! It's very encouraging.

MikeFloutier

Over the weekend I have prepared my submission to TPAS; a six page covering letter plus a host of copy documents, letters, emails etc.

I was just ready to get it posted when TW belatedly phoned me back.

The chap had obviously studied my file but all he did was rehash all the confused, contradictory stuff they'd sent me before.

I patiently and slowly took him through the logical outcome of their position which culminated in him eventually agreeing that, according to them, I certainly was NOT going to get any Step-up at GMP date from the revaluation of my GMP (i.e.. 7% pa).

I then contrasted this with their statements that their Early Retirement quote was far higher than the NRD quote BECAUSE it was taking account (for an extra 5 years) of their estimated Step-up at GMP due to GMP revaluation.

I have to say it, was with some measure of relief that I audibly heard him stop and groan and finally utter the words, "I see what you mean".

This sensation was short-lived however:

1. He went on to say that they would now be re-assessing the position and would write to me with their response in due course. When pressed he said he had no idea how long this might take.

2. I made it clear that I was expecting, due to Anti-franking legislation, confirmation along the lines of their booklet Example (mentioned above). He responded by saying that the details of the person in the booklet were different to my own and a quite different set of calculations would apply. I'm not sure that's true as:

a) The booklet man retires in 2011; I retire in 2014
b) Booklet man left the Scheme in 1991, I left in 1994

Can this really make a big difference?

3. He also made it clear that, when they refer to the Excess, they actually mean the entire pension (i.e.. what we would refer to as GMP + Excess). I questioned him closely on this as I had noticed that their usage of the term had implied this. He did admit that it was strange but it was definitely how they did things. What can one say in the face of all this?

He did again promise to send me the Rules (after my 4th request).


I think it makes sense now to press on with writing to TPAS although obviously I will include this new information. I have mentioned the DWP and HMRC links regarding Anti-franking.

On the subject of links, I don't remember if this one has been mentioned - Pensions Management Institute - Pensions Terminology. This is their definition of Anti-franking -

ANTI FRANKING REQUIREMENTS
Anti franking legislation requires that statutory indexation of an individual's [Guaranteed Minimum Pension (GMP)] is paid in addition to any amount by which the scheme benefits exceed the GMP, and is not deemed to be covered or "franked" by other scheme benefits.

The requirements are covered in Chapter III of Part IV PSA93 and if brought into force Part II of Schedule 5 of the Child Support, Pensions and Social Security Act 2000.

Rather amusingly this edition of Pensions Terminology is sponsored by, guess who, Towers Watson

Finally, as an after-thought, I have noticed that the NRD quote of £11,025.62 that I have been offered consists of un-revalued GMP + revalued Excess. We've noted this before BUT what hasn't been mention is that this is actually LESS than my basic pension simply revalued at RPI/5%. This confirms what nonsense it all is.

Will wait to hear from:

1. TW, and

2. TPAS

SnowMan

MikeFloutier wrote: »

This sounds good SnowMan. Did you mention TPAS's involvement to your Scheme or was it that, armed with their support, you were able to convince your Scheme? Either way it's a result, you must be pleased; well done! It's very encouraging.

I didn't mention TPAS but the TPAS figures gave me the confidence to challenge what the scheme were saying.

It wasn't really a case of me convincing my scheme but of the scheme when asked about their earlier vague response, coming back with a very clear response about what will happen at age 60 and 65.

The scheme have given me a worked example using my figures which is crystal clear about the calculation method of my pension. It shows it can be done and is in complete contrast to what has happened to you when contacting your scheme administrators.

I would press ahead with getting the information over to TPAS. I think it is reasonable to assume that you won't get a sensible response from TW given their latest phone response. There is no obvious reason why the booklet example and its methodology wouldn't apply to you also, both you and the example being post 1/1/91 and pre 6/4/97 leavers (with not much happening revaluation legislation wise inbetween).

Incidentally when September CPI comes out on 15th October it should be possible to work out accurately the revaluation increase that applies to your excess pension under the statutory revaluation requirement, but the implied estimate figure the scheme have been using of around 68.4% won't be far off (I would currently estimate it will be around 69.0%).

MikeFloutier

Thanks SnowMan, I'll do that.

I did try reading through Chapters II & III of Part IV PSA93 in preparation for getting my copy of my Scheme Rules BUT, to be honest, I couldn't make much sense of it. It's a bit like trying to understand the Maths questions on University Challenge

The bit I did understand however was that found on on page 70, being Chapter II, section 86 (2) which says "The same money may not be treated as providing both the increase in benefit required by this Chapter (ie. the Excess portion) and the benefit required by Chapter III. (i.e.. the GMP portion)"

This seems to be fairly clear regarding anti-franking.

Anyway, I'll report again when I get replies from TW or TPAS.

SnowMan

MikeFloutier wrote: »

I did try reading through Chapters II & III of Part IV PSA93 in preparation for getting my copy of my Scheme Rules BUT, to be honest, I couldn't make much sense of it. It's a bit like trying to understand the Maths questions on University Challenge

The bit I did understand however was that found on on page 70, being Chapter II, section 86 (2) which says "The same money may not be treated as providing both the increase in benefit required by this Chapter (ie. the Excess portion) and the benefit required by Chapter III. (i.e.. the GMP portion)"

This seems to be fairly clear regarding anti-franking.

That's a great find. I missed that when I was looking through PSA93 earlier.

However I did know that a dodecahedron had pentagonal faces, unlike the students, including one studying maths, on yesterday's University Challenge.

xylophone

Over the weekend I have prepared my submission to TPAS; a six page covering letter plus a host of copy documents, letters, emails etc.

Mike, under the circumstances, is it worth advising the Scheme Trustee of what is going on?

The Trustee (Barclays Pension Funds Trustees Limited) is ultimately responsible for the UKRF. The Trustee has a duty to run the UKRF in accordance with the Trust Deed and Rules, abide by all relevant legislation, act prudently and protect the benefits members have built up. The Trustee acts independently from, but usually with the support of, Barclays.

The Trustee uses committees, made up of Trustee Directors, to focus on the key areas of Investment, Operations, defined contribution, Communications, Disputes and Governance.

You can contact the Trustee at:

Barclays Pensions
Barclays Pension Funds Trustees Limited
Level 8, 1 Churchill Place
London E14 5HP
UK

MikeFloutier

Thanks Xylophone, I hadn't considered that the Trustees and the Administrators weren't one and the same.

I guess, if that's the case, then the Trustees will get involved at IDRP stage.

To be honest I think I've got enough balls in the air at the moment but it's a good point. There could be some confusion going on with both having their own ideas of how things should work. Goodness knows its all confusing enough:)

xylophone

I know what you mean about "balls in the air" but do you not think that considering the quality of the information you have had from TW, the Trustee should be brought into the loop?

The Trustee uses committees, made up of Trustee Directors, to focus on the key areas of Investment, Operations, defined contribution, Communications, Disputes and Governance.

You are not really in dispute - you are simply in the dark and cannot make an informed decision about how and when to take your pension benefits because of the poor quality of the communication from TW?

Their comments about the example in the 2011 booklet not applying to your case are simply baffling, but if this is the case, then what example is appropriate to your situation and why do they not supply it?

MikeFloutier

Thanks Xylophone, I understand what you're saying.

The nub of the matter for me is that I want to take my NRD pension and I believe I am entitled to a Step-up at GMP date and I would be happy to accept the calculation method outlined in their booklet.

TW have clearly (well maybe not that clearly ) stated that they are offering me a pension that EVEN falls short of 2/3 final salary + RPI/5%, WITHOUT any Step-up.

In my eyes we have a significant dispute. The Trustees are surely going to be involved in IDRP. In any case I'm fairly sure they would simply advise me to start IDRP; something I will do anyway subject to the responses from TW and TPAS.

xylophone

(well maybe not that clearly

This is exactly my point - you can't even know the precise nature of any dispute until you know precisely what is (or is not) on the table?

And ( I hope I am not labouring the point) where is the example, or better, a tailored illustration, appropriate to your circumstances?