Revaluation of non-GMP accrued pension benefits

hyubh

agarnett wrote: »

I think I appreciate the subtle difference you are exploring with discretionary increases (or lack of), hyubh.

You saw the word 'revaluation' and immediately thought 'valuation'. Whoops!

However if we bear in mind most legacy DB schemes have been in deficit for years consecutively now, one would doubt that there would have been much by way of discretionary increases for remote deferred members for a very long time?

Exactly.

but is the absence of just discretionary increases really likely to be a plausible explanation?

I haven't said it is. My sole reference to 'discretionary increases' was with respect to your own claim that the OP's issue had a direct relation to transfer values.

Having had some interaction with the airline industry,

Is this of the same order as your involvement in local authority outsourcing...?

agarnett

hyubh wrote: »

You saw the word 'revaluation' and immediately thought 'valuation'. Whoops!

That is not my mistake. Scheme valuations and individual benefit revaluations and thence individual CETVs are very obviously linked via agreed (trustee and employer agreed) actuarially advised assumptions used in the tri-annual scheme valuations coupled with further actuarially advised assumptions placed upon the particular liabilities arising from individual members revaluations.

My understanding is that the methodology and assumptions are rarely agreed more frequently than triannually, unless the trustees decide they need to change something. If there is a motivation to arrive at the lowest possible resultant in any of the assumptions then who will be the final arbiter of reason for the next three or four years after a scheme valuation? I also fear that there may be other unique actuarial in-house preferred ways, innovations and initiatives which are not reviewed at scheme valuations/reviews, and not very closely regulated or bounded by scheme rules, legislation or anything else. All these things could result in benefit revaluations and CETVs which are highly questionable yet go unquestioned for years.

These may persist for as long as a particular employer FD, trustee, actuary or administrator or even a piece of software remains in the mix. E.g. Mercer may do things one way, whereas JLT or Towers Watson may do things another - even in the same given environmental circumstances - year after year.

My DB scheme have written and told me that the triannual valuations and my CETV are linked. They have told me that the trustee's view of my pension revaluation and of the CETV they quote will be dependent upon the 31st March 2015 triannual revaluation. They haven't said when they will start. I do know that they didn't agree the 2012 one until sometime in 2013.

Triannual valuation or not (in practice these can be more than four years apart with the 15 month permitted grace on publishing agreed findings) all of it constantly should be remodeled and has to add up - otherwise misrepresentation obviously occurs.

The individual pensions may be revalued behind the scenes annually, but I get very little other than a general newsletter for mine unless I ask for something. It would be interesting to know which tip of the melting iceberg the OP has spotted that brought he or she here. I.e. was it the perceived inconsistency between the OP's 1988 and 2007 scheme correspondence, which does indeed look inconsistent, or maybe it is more than that? For what it is worth, I again will say I have seen similar references in mine and I have been told that the lower figures and CPI do not apply to mine because I left the relevant employment in 1988. The reference to a post-1985 (not post-1988) component does confuse me though. Was there a relevant change in 1985 too, and then another in 1988? I haven't seen that in mine yet.

you wrote:

me wrote:

...but is the absence of just discretionary increases really likely to be a plausible explanation?

I haven't said it is. My sole reference to 'discretionary increases' was with respect to your own claim that the OP's issue had a direct relation to transfer values.

Please explain - you seem to be splitting hairs on whether the OP was disappointed at a transfer value or at a pension benefits revaluation. Most reasonable observers would expect there to be a transparent link, especially at this particular point in time with 6th April 2015 less than a month away. How else can they make a decision other than to sit tight and trust what happens next?

you wrote:

me wrote:

...Having had some interaction with the airline industry, ...

Is this of the same order as your involvement in local authority outsourcing...?

Well I was doing business with airline FDs and trained as a commercial pilot ... and I have had to deal with local authority outsourced fiascos almost weekly for the past 8 years, so do I qualify to post as a man on the Clapham Omnibus or is more required? I am slightly mystified in wondering what your point was in writing that, so no need to answer it!

Instead, please could you tell us more possible reasons why the OP and others should expect to see anything that obviously undervalues their DB pensions either via a recent CETV quote or via a recent summary of revalued benefits since becoming deferred members in 1988.

Thanks.