Frozen final salary pension.

zagfles

Linton wrote: »

I dont understand why the pension is dropping between your two most recent quotes - I would have expected it to rise both because of inflation and because you are taking the pension for a shorter period. That ties in with the figures for the first and middle quotes.

The reason is probably inflation and the statutory way deferred pensions are increased.

Deferred pensions are increased by inflation for every whole year of deferment. However, the years used depends on exactly when you take the pension. It uses the inflation figures in Sept the previous calendar year back the number of complete years of deferment.

For instance, say you left May 1990. If you retired now, Jan 2014, you'd have 23 complete years of deferment and it'd use inflation figures for the 23 years Sept 1991 to Sept 2013 inclusive.

But if you had retired in Dec 2013, you still have 23 complete years, but it'd use the inflation figures 23 years back from Sept 2012, ie Sept 1990 to Sept 2012.

Sept 1990 inflation was high, whereas Sept 2013 was low. This means that your quote in Jan would be lower than your quote in Dec.

OP - what month did you leave the scheme? You may be better off waiting till after that month before taking the pension so you get another complete year and the 1990 inflation included. Ask for a quote for that month.

let_it_be

Thank you all for your input.
I did leave in May 1990 so it looks like I should have retired in Dec. Damn. Seems to me it's all in the hands of the Gods, which I wasn't expectin. I retire in April so I can expect this figure to change once again then. I would have thought being so important, this information should be made more available to employees and ex employees when getting nearer to retirement as it can make a huge difference in the outcome of their pension

kidmugsy

[QUOTE=let_it_be;64524477_I_would_have_thought_being_so_important,_this_information_should_be_made_more_available_to_employees_and_ex_employees_when_getting_nearer_to_retirement_as_it_can_make_a_huge_difference_in_the_outcome_of_their_pension[/QUOTE]

Defined benefit pensions bring with them rules that are tricky for the layman - or for the pension scheme employees themselves I suspect.

xylophone

http://www.providentsolutions.co.uk/Documents/Deferred%20Company%20Pension%20Scheme%20Guide%20from%20Provident%20Solut%E2%80%A6.pdf
The above might be worth a read for some general information.

http://www.barnett-waddingham.co.uk/news/2012/07/what-is-a-gmp/

http://www.barnett-waddingham.co.uk/news/2012/07/revaluation-for-early-leavers/

The above might also be worth a look.

When do you become eligible to draw your state pension?

let_it_be

I'm 65 in April next year but the pension I've been talking about, I can now take it at 64. It was 65 but the rules changed a couple of years ago and they reduced it to 64.

zagfles

let_it_be wrote: »

Thank you all for your input.
I did leave in May 1990 so it looks like I should have retired in Dec. Damn. Seems to me it's all in the hands of the Gods, which I wasn't expectin. I retire in April so I can expect this figure to change once again then. I would have thought being so important, this information should be made more available to employees and ex employees when getting nearer to retirement as it can make a huge difference in the outcome of their pension

Are you able to delay taking this deferred pension until May so you have another complete year?

xylophone

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

https://forums.moneysavingexpert.com/discussion/4509161
might be worth a look.

zagfles

xylophone wrote: »

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

https://forums.moneysavingexpert.com/discussion/4509161
might be worth a look.

Single tier won't affect the OP as he reaches SPA before April 2016.

let_it_be

I don't know. I will have to find out. If I can I will ask for a quote to June 1st and see what the difference is.

let_it_be

Id like to thank everyone for their great knowledge and putting me in the picture. It's the things I didn't know I didn't know. I thought you just build up a fund that wouldn't reduce and your pension was calculated from this. It turns out to be more complex than I ever thought. Bit of hit and miss.