CARE Pension enhancement

taktikback

Not sure where the issue is here?. The enhancement is the additional years you would have worked to normal retirement. The basis of the calculation is the final salary at retirement. In your case, the last three years have been accrued under CARE. The CARE years have been averaged out for the calculation as you would expect. It's not clear to me why you think there should be a further enhancement beyond the scheme making up the years you would have worked?

Sofia123

Hi Taktikbak,
Thanks for your input. It's just that the scheme rules I have in a booklet from 2011 (which is after the switch to CARE occurred), it states that early ill-health retirement in my tier:
"includes allowances for those you would have earned had you remained in Pension scheme until my Normal Pension Date".
Basically, it doesn't seem that my pension has included this 'enhancement'. Theysay they have added the remaining years (20) to my NRD, but it doesn't reflect in my actual pension quote, they are around £5500 p.a short in their quote. i.e if my final (CARE) pensionable salary was say £22,000, my pensionable salary would be £22,000/ (80) accrual rate which equals £275. Times this by the number of years remaining (20) to get £5500 p.a. But what they are saying is that now it is a CARE pension, the money I would have accrued during my remaining pensionable service is irrelevant, and there is no way to calculate it, as they could have with a final salary pension. As such, the quote I have received seems only to include the final salary up to 2010, added to 3 years of accrued CARE benefits. I'm no expert here, just what i've spent the few days Googling. I would have thought they would multiply my final pensionable CARE salary by years remaining (20) years, which would increase my annual pension by £5500.
Hope this makes sense,
Kind Regards,
Sofia.

taktikback

I think you are double counting here. What they are doing is making up the years you cannot work up to your normal retirement date. That's a fixed number of years. The basis for the calculation has to be a mixture of your final salary figure (up to 2010), and then the average of your CARE salary over the three years of your CARE period. The enhancement is the 20 years you could have worked. They are correct in that the CARE accrual is irrelevant because they are just covering the pension you could have earned over 20 years (based on the three year average)

Sofia123

Thanks Taktikback,

I understand what you say. It's just that the extra 20 years enhancement hasn't been added to my pension. It seems they have just added together my pension derived from my final salay to the last 3 years of accrued CARE pension, but haven't done anything to the 20 years enhancement. This is what it seems, but until they inform me how it was calculated, I can't prove this, hence my FOI request.
Kind Regards,
Sofia.

taktikback

As I understand it, the NUVOS scheme was a 60ths scheme, so if you approximate the CARE portion to being the same as what went before, then you would be looking at your 15 years plus 20 enhancement, which gives 35 years. So for your quoted example of £22,000 -that would be 35/60 * £22000 = £12833

Is that somewhere near what you have been quoted?

Sofia123

Hi Taktikbak,
Thanks again for your reply. No, I haven’t been quoted £12833, I have been quoted £7538. Also the accrual is 80th. I know that my ‘opening CARE balance’ (pension built up from Final salary period) was around £6500. The other £1038 I guess they took from adding to the £6500 my CARE built up over 3 years, which would tally up. Does this make sense, or am I missing something obvious? Shouldn’t they also add £22000/80 * 20 (years) = £5500, making a total of £12000?


Kind Regards,
Sofia.

taktikback

Are you sure about the accrual rate because the NUVOS was 60ths. Also that figure you have been quoted looks like about 20/60 *22000 (plus a little adjustment up for the CARE bit). That could mean that the quote is just for the 20 year enhancement and doesn't include your pension already earned? Maybe that's the confusion?

Sofia123

Hi Taktikbak,

It's not a NUVOS scheme, sorry, I should have stipulated this.The accrual was 60th quite a few years ago, then changed to 70th, then in 2009 changed to 80th. It is also stayed at an 80th when the pension changed to the CARE scheme in 2010, otherwise your calculation would be spot on and seem to be the confusion, only the administrators clearly told me over the phone the it included my pension accrued from my Final Salary period, but were very vague, (and baffling) when it came to the CARE enhancement. Perhaps it is correct, but the more I look into it, the smell of a rat gets stronger.
I just want to get it resolved, there's enough stress involved with ill-health retirement. (even though I should get a decent pension).
Kind Regards,
Sofia.

Sofia123

Hi All,
Just want to say thank you for your input, especially Andy L & Taktikbak, I had confirmation today of my revised pension quote which is what it should be, phew! Seems they didn't enhance the CARE part of my pension after all, all sorted now though thankfully.

Many thanks again,
Sofia.