Aegon Section 32 GMP problem

Your_Hero

Narfie wrote: »

I have now had a reply from Aegon who say that because the policy commenced after November 1996 the conditions state that any shortfall in providing the GMP must be met by the reference test scheme and non reserved unit funds
However as this policy was set up under a Section 32 buyout and the original policy was pre 1996 should not the full GMP be paid?

Narfie, I'd suggest you sit down with a qualified IFA in this field to help you. You will have to pay him/her for his time, but it does sound like it would be worth your while to find out what's going on here.

You do not appear to be giving us the full facts or answering questions other users have posted. You will need to give all the statement details and other relevant information to your chosen adviser if you want proper advice. Little bits here and there will not do.

Narfie

The COD amount for the period I was in the scheme that was subject to the Section 32 buyout was £46.79 per week , similar to the figure the Aegon are offering however the policy schedule clearly states the GMP figure and the fixed annual revaluation

SeekTruth

Have you read https://forums.moneysavingexpert.com/discussion/4532605
as xylophone references in post 14?

There seem to be 3 different updated values of GMP floating around in your case: £120.68 (assuming 8.5% increases); £51.45 (provided by Aegon) and £46.79 (your COD from DWP).

As I understand it, HMRC are responsible for calculating the definitive updated GMP value (although, as covered in the referenced thread, they sometimes make mistakes). I'm guessing that the Aegon figure (£51.45) has come from HMRC. I'm also guessing that the DWP figure (£46.79) has also come from HMRC, though presumably at a different time.

Perhaps you could get Aegon to state whether they or HMRC have calculated the £51.45 figure. If Aegon calculated the figure then it is them you need to persuade that fixed rate should be used. If HMRC calculated the figure then presumably it is HMRC you need to persuade; they would then presumably advise Aegon the corrected figure.

Incidentally, do you understand the impact on your state pension should your COD be acknowledged to be £120.68 rather than £46.79? You will definitely be better off overall with the higher figure, but perhaps not by as much as you hoped!

xylophone

I have been trying to get back to basics on this.

The OP was a member of an occupational pension scheme.

That scheme was contracted out and subject to GMP rules.

Had the OP remained a deferred pensioner of his scheme, it would have had to provide him with at least his GMP revalued to age 65 by whatever method was chosen by the Trustees. (It would seem to have been Fixed Rate in this case.)

All the GMP for this employment was pre 1988.

The OP did not remain with the Scheme - he transferred out to a S32 with Scottish Equitable.

As I understand it, the S32 policy had to guarantee to pay at least the GMP from the ceding scheme, (revalued by Fixed Rate), at GMP age, (65 for a man).

If the OP's scheme would have paid him a GMP of £120.68 a week, must not Aegon (SE's successor) do likewise?

Aegon are not required to increase this pre 88 GMP in payment and if the OP's COD for all his contracted out pre 97 employment exceeds his pre 97 ASP shown on his State Pension benefit letter, then he will not receive any increase on the ASP until it matches or exceeds the COD.

The OP might try a call to the Pensions Advisory Service?

http://www.pensionsadvisoryservice.org.uk/about-us/tpas-and-the-pensions-ombudsman

Narfie

I will contact the PAS for advice

I have had my state pension statement and details of my COD from HMRC however despite anything else I have a policy with Aegon which clearly states that them reserved contributions are reserved for a GMP of £752.44 revalued to State Pension Age of £6,275.45 with no caveats or qualifications. Aegon have confirmed this in writing several times since the policy was arranged by the Trustees for the original final salary scheme after the company folded and furthermore Aegon stated that they would make up any shortfall in funds to meet this, therefore I can see no reason other for them to dispute this.

xylophone

I will contact the PAS for advice

I hope that you will let us know the outcome.

Narfie

Yes of course

Narfie

I contacted tha PAS who could not understand why the GMP was now different, they advised me to write to Aegon requesting documentary evidence of the reason and then forward them all of the relevant documents for their advice.
I wrote to Aegon but only got a reply stating that "HMRC informed them that the limited rate revaluation should have applied. In this case on the full 5% revaluation the GMP at state pension age would be £2,675.52 pa"
I will now forward everything to the PAS - I do not understand why the GMP should change. The section 32 buyout policy clearly states what the GMP would be together with the revaluation rate @ 8.5%, there were no qualifications or caveats to the contrary and no reference to HMRC. The GMP was for a contracted out period between 1977 and 1987, the rate of 8.5% applies to this period and although the Section 32 buyout did not start until 1997 it covers GMP previously accrued

xylophone

although the Section 32 buyout did not start until 1997 it covers GMP previously accrued

Was your pension previously deferred within your company scheme?

Which method of revaluation was being used by your scheme?

http://www.pruadviser.co.uk/content/nav/about/26674/pghome/49880/53732/53816/53822/53825/

I hope you will advise us of the outcome after the PAS investigation.

Narfie

The policy schedule issued with the Section 32 policy clearly states that the rate of revaluation is 8.5%