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

SnowMan

SnowMan wrote: »

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%).

CPI for September is 2.7%.

So combining this with the 2012, 18 year statutory revaluation percentage gives us a minimum statutory increase for the excess to age 60 of

(1.027 x 1.647 - 1) x 100 = 69.2% (could be 69.1% depending on rounding).

The latest scheme figure at 60 is based on a slightly higher figure of 73.4% (= 9496.61/5476.71 - 1) see this post.

MikeFloutier

Thanks SnowMan.

For various reasons, including being self-employed, we will be using some lump sum for normal living expenses (temporarily).

We will keep this to a minimum and we will use the entire AVC portion as Cash.

It may be that we are able to re-invest any remaining Cash in due course.

My understanding of Recycling law is that, within the first two years I should restrict Recycling to 30% of the Lump Sum. Thereafter it seems a little hazy (see Xylophone's "Humpty Dumpty" quote).

Presumably it would not be unreasonable to contribute a similar amount in the following two years.

Since my wife may not be using all her allowances in retirement I would naturally follow your advice and make the pension investments in her name. Thanks for this tip!

I should be hearing from TW & TPAS in a day or two so I shall be in a position to go ahead and make the big decision.

xylophone

make the big decision.

We're all ears - or eyes perhaps.....:)

MikeFloutier

Ok, well TW got back to me with Example calculations (in line with expectations) for, a) Full PCLS, and b) £30k PCLS.

Their only caveats are, a) changes in pension law, and b) changes in Scheme Rules. They don't even mention RPI - somewhat of a moot point anyway since the RPI increases from Retirement to GMP date are Franked.

By the way, I remember the link about Partial-Franking but I don't recall there being any logic to it - ok well there is partial logic in that you can't expect part of your pension (ie. the GMP portion) to be increased by RPI AND 7%

Anyway, that said, my plan is now to accept the £30k PCLS quote. This gives a pension, at 65, of around £900 less than the zero PCLS quote.

Regarding Recycling, I guess Humpty Dumpty is having the last say on planned Recycling after 2 years.

TPAS have responded saying they've sent my papers to someone who will hope to look at them within a month, he will come back with more questions and will give me updates every 2 months.

In the circumstances I don't think I'll wait for that.

xylophone

In the circumstances I don't think I'll wait for that.

Now lettest thou thy pensioner depart in peace having seen thy salvation..:)

MikeFloutier

Aah, Shalom Simeon, I always thought that Xylophone couldn't be your real name

Ok well apart from feeding back TPAS's response in due course, I guess that just about wraps it up.

I would like to say a heart-felt Thank you! for all your technical help and guidance SnowMan and Xylophone, and thank you Mrs Chaucer for your encouragement.

You guys have enabled me to persevere with this important issue when, left to my own devices, I would have just taken the path of least resistance.

I guess we'll probably not know what would have happened by way of a Step-up at GMP date BUT we have obtained an assurance of how those calculations will take place.

I am indeed Blessed - Thank you !

mrschaucer

Excellent stuff, Mike. (Have been following your every move.) Hope you now have a very happy retirement, and thanks for a really informative thread.

SnowMan

Never again, in the history of mankind, will the subject of anti-franking be tackled with such determination on an internet forum.

Thank you to everyone who has contributed to the thread.
Have a long and happy retirement Mike :beer::j

MikeFloutier

The TPAS advisor has now looked things over and advises that both the NRD and Early retirement offers are broadly similar.

He points out that there is a small degree of safety on taking the early option as this would rule out the possible effects of possible law changes.