Deferred pension advise needed!

mumsiemum

I have a question which I hope someone can help me with.
I paid into a works pension from 1976 to 1998. Normal retirement age was 60 but the pension could be taken anytime after age 50. At age 50 (2010) I was asked if I would like to take my pension early or defer it to age 55. The illustartion of 2 options open to me if I deferred were as follows:
Option 1
Lump sum £26898.06
Annual pension £10149.39
Option 2
Lump sum £57433.97
Annual Pension £8614.97

On this basis I decided to defer taking my pension until 2015 (age 55) and then would opt for option 2.
When I approached the pension administrator to apply for the pension I was told that the options had been reduced (see below)
Option 1
Lump sum £27884.13
Annual pension £8667.69
Option 2
Lump sum £50281.35
Annual Pension £7542.20

As you can see option 2 is now less than the original illustration - had I known this I may well have decided to take the pension at 50 as there would not have been much point in delaying it for 5 years.
I contacted the scheme administrators (who have changed since my original illustration) and they say
‘. . . I can advise that the Trustee has requested that claculation practice inherited from previous Scheme Administrators be altered so that it more clodely reflects that specified by the scheme rules. This means that during the period of deferment, only the pension in excess of your Guaranteed Minimum Pension (GMP) is subject to revaluation.’

It appears that my original illustration included GMP and so overstated.

Is there anything I can do about this as I made my decision to defer based on figures I was given in 2010, the fact they were incorrect is not my problem? I have written several letters and they just keep quoting the same paragraph back to me.

Any advise or help on what to do next would be greatly appreciated.

MM

PeacefulWaters

I suspect the quote you got 5 years ago was for an active member and as such incorrect.

pandakins99

So when would you get the GMP revaluations?


Years ago I used to do the pensions admin on a scheme that did not include GMP revaluations in the calculation of early retirement of a deferred pensioner. Instead they would give a 'step up' at GMP Age.


They used fixed rate GMP revaluations, so at 60 or 65, if you had been in that scheme, you would get all the 6.25% increases since 1998 added on to your pension, which would probably be quite a lot of extra pension.


It was an oddity at the time as the employer had several schemes and only one had that practice. Members did not seem to like it or understand it!


Maybe it works that way?