Serps - I wasn't told!!

Koicarp

gothnurse wrote: »

Thanks for the advice, it was 1971 when I joined the NHS, don't seem to remember getting a booklet when I was 18 to read about what I had signed up for!
I was not automatically opted back into Serps when I left in 1994 and went to the private sector. Without advice how can I take responsibility for this when I have only just found out about this through the media mostly. Any way I have been told by the pension agency that I along with many others will not be getting the 150 pound, or whatever it will be pension, and will only get a percentage as I did not pay Serps. So to late to do much about it now

You joined when I was still in nappies! I joined just as you were going into the private sector. The only things I really remember from the pensions talk was being told I could leave after the first month, but I'd be daft to do so as it was a great pension with 2/3rd final salary. The chap did tell us he couldn't and wouldn't give any advice. I knew about contracting out as I had already got a private pension which I transferred in.
They did give us leaflets but there was so much to read at the time, and so much to get your head around trying not to make mistakes on the wards. We didn't have the internet either.
Page 14 here explains: http://www.nhsbsa.nhs.uk/Documents/Pensions/Booklet_R_(V16)_online_-_08_2014_.pdf

xylophone

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/204604/single-tier-pension-transition-technical-note.pdf

Have a look at the above bearing in mind that the legislation has now been passed enabling the introduction of the STSP from 6 4 2016.

kangoora

The op does raise some good, general points. It's ok when you are financially trained or have the benefit of hindsight but for too many people pensions are something they need to think about when they hit 50 years old which is often too late.

Asking most (not all) 18-25 year olds to read a pension policy document and to understand the implications is like getting them to study Latin as a hobby. I know I'm going to batter it into my kids, but how many people (not on these forums) are going to do that?

I know myself I need to throw significant sums into my pension over the next 6-8 years to meet my aim of retiring before my 60th birthday and I wouldn't say I've been the worst at future planning - at least I've always made sure I was contributing enough into a pension to max out employer contributions and getting any employee share plans that were available. Plus, I can afford to do so, unlike a lot of people.

My wife and my sister both work in accounts for small companies just starting auto-enrolment and they both separately came to the conclusion from chats with people in the office that around 50% of the staff in their firms are going to opt out - purely because for a lot of people it's seen as a pay-cut.

I don't know what the answer is, the government is probably relying on inertia for people to remain involved but my personal, albeit small sample, is it may not be as rosy as the government hopes. Maybe there should be some information pack required as part of auto-enrolment (possibly this already exist?). Make teaching compound interest in school maths using 'real' financial figures and using pension projections as part of it to try to educate early?

Anyway, just a potential discussion point....

Thrugelmir

kangoora wrote: »

The op does raise some good, general points. It's ok when you are financially trained or have the benefit of hindsight but for too many people pensions are something they need to think about when they hit 50 years old which is often too late.

Asking most (not all) 18-25 year olds to read a pension policy document and to understand the implications is like getting them to study Latin as a hobby. I know I'm going to batter it into my kids, but how many people (not on these forums) are going to do that?

It's not as if retirement suddenly springs up. There's a lifetime to plan for it. As with many choices in life. It's a personal decision. Some people like to party some don't. There's been a cultural shift in my lifetime. My late father told me to start a pension when I first started work. That was at 17. £10 a month which equated to 10% of my take home salary. I've done likewise to my children.

brewerdave

Thrugelmir wrote: »

It's not as if retirement suddenly springs up. There's a lifetime to plan for it. As with many choices in life. It's a personal decision. Some people like to party some don't. There's been a cultural shift in my lifetime. My late father told me to start a pension when I first started work. That was at 17. £10 a month which equated to 10% of my take home salary. I've done likewise to my children.

...with respect, I have to agree with post prior to yours. Yes, there is a personal responsibility to plan for the future/retirement.......but the technicalities of opting out of SERPs?? I was opted out ~ 1980 ish by my Company -we were certainly told that it would improve our Company pension- but the implications for the State Pension were not really explained and as it happened at the same time as our scheme going from a non contributory scheme to a 4% contributions scheme with an associated cash "buy out", opting out got lost - I have been back thru' all the old leaflets I have from the Company,certainly going back into the 90s -and it's clear as mud!!:(

Your_Hero

brewerdave wrote: »

...with respect, I have to agree with post prior to yours. Yes, there is a personal responsibility to plan for the future/retirement.......but the technicalities of opting out of SERPs?? I was opted out ~ 1980 ish by my Company -we were certainly told that it would improve our Company pension- but the implications for the State Pension were not really explained and as it happened at the same time as our scheme going from a non contributory scheme to a 4% contributions scheme with an associated cash "buy out", opting out got lost - I have been back thru' all the old leaflets I have from the Company,certainly going back into the 90s -and it's clear as mud!!:(

I understand what you're saying and no one fully understands the technicalities of SERPS and you aren't expected to either. But it was a 'simple' decision right from the start. You either join the company scheme or you don't.

If your company scheme (like OPs) was a contracted-out scheme, then the one condition of joining it is that you would be opted of SERPS. You have no say in this matter. So your choices would have been, (1) stay in SERPS and forgo company pension or (2) join it, as you have done, and opt out which produces a far better outcome otherwise you would have no pension at all had you not joined, except a full SERPS pension which isn't a lot.

coyrls

Your_Hero wrote: »

I understand what you're saying and no one fully understands the technicalities of SERPS and you aren't expected to either. But it was a 'simple' decision right from the start. You either join the company scheme or you don't.

If your company scheme (like OPs) was a contracted-out scheme, then the one condition of joining it is that you would be opted of SERPS. You have no say in this matter. So your choices would have been, (1) stay in SERPS and forgo company pension or (2) join it, as you have done, and opt out which produces a far better outcome otherwise you would have no pension at all had you not joined, except a full SERPS pension which isn't a lot.

And not even a "full" SERPS pension in all probability, as to get the maximum possible SERPS pension you would have to be quite a high earner over a long period. As you say it's a "no brainer" choice and not worth retrospective anguish over a non-issue.

kidmugsy

coyrls wrote: »

not worth retrospective anguish over a non-issue.

Blow me down, a revolutionary suggestion. You'll be suggesting next that posters should refrain from childish hyperbole.

cb055

I opted out of SERPS when the options were first presented back in the 80's to a private company, what would be the best option now (i'm 51) continue or opt back in?

dunstonh

cb055 wrote: »

I opted out of SERPS when the options were first presented back in the 80's to a private company, what would be the best option now (i'm 51) continue or opt back in?

Assuming you were not contracted in previously, you automatically become contracted back in during 2012 when contracting out was abolished. Many insurers automatically contracted people back in during the early 2000s (mainly those sold by the old home service insurance companies). If you changed employer and joined a contracted out occupational pension, then those trumped individual personal pensions in the pecking order.

The optimal age for contracting back in was around 45.