"clawback"

nboatee

Hello all, does anyone have any info about pension clawback?

I took early retirement from a bank 6 years ago and now work part time, I have looked without success for full time work.

I have been drawing my pension and realised that I would have "clawback" deducted when I recieved the state pension.

However, now I have reached 60, I have had "clawback" deducted. They sent me an explanation, which is not in plain English, but the upshot of it is that they are not interested in when I get the State Pension, (in my case aged 66), but to add insult to injury, men are not deducted "clawback" until they reach the age of 65.

Surely this is both sex and age descrimination!

It is a struggle to live on my current earnings, and now I'm going to loose over £30 a month.

Thank you for reading.

brewerdave

Are you sure its only £30 per month ?? I took a "levelling" option with my final salary pension a few years ago -when my state pension date arrives, my pension drops by ~ £500 per month !!

hyubh

They sent me an explanation, which is not in plain English, but the upshot of it is that they are not interested in when I get the State Pension, (in my case aged 66), but to add insult to injury, men are not deducted "clawback" until they reach the age of 65.

Surely this is both sex and age descrimination!

The scheme would have been costed for the state pension ages of men and women at the time its rules were written. If there's 'sex discrimination', it was with historic stage pension ages being higher for men.

jamesd

Some defined benefit pensions offer their members the option to boost their pension payout in the years between the scheme's normal retirement age and state pension age. Clawback is a term that can be used to describe what happens when this boosting of income ends but it's misleading because it's just the end of a temporary boost.

The boost costs a pension scheme money. That cost is built in to the pension payout after the state pension starts, making it lower than it would otherwise be. When state pension ages change a scheme has three main choices, it can start to reduce the pension payouts, it can stick to the original state pension age that applied when the contribution levels were set or it can require extra large payments from the employer and scheme members. The scheme can't normally just go ahead and reduce the long term income payment because defined benefit schemes relate that to salary and years worked. Demanding extra payments would be unpopular. So sticking with the original terms is the option that is likely to be least disruptive.

You're right that the clawback age is discriminatory. That is because state pension ages are discriminatory and have the state system paying out more to women than to men for the same NI contribution levels during their working years. To eliminate most of this discrimination it would be necessary for the state pension age for women to be about one to one and a half years older than that for men. This still leaves the women living longer than the men by two or three years and it's impractical to reduce that in the pension system because it takes measures to improve health care for men, perhaps by diverting funding from measures aimed at only women.

You might ask your pension provider whether they offer you the option of a lower payment from your state pension age in exchange for an increase in the number of years for which the boost is paid.

If they don't offer such an option and you own your own home you might consider using an equity release mortgage of the type that allows drawing as needed and repaying s desired. You could use this money source to top up your income now with the intention of repaying the mortgage over say two or three times as long as the borrowing duration.

xylophone

https://forums.moneysavingexpert.com/discussion/3886143


http://hansard.millbanksystems.com/commons/2001/oct/16/pensions-clawback

xylophone

If the OP's scheme is indeed the Midland Bank section of HSBC,

the pension booklet says

"State deduction
If you joined the Midland Section after 1974, your pension will be calculated to take into account a single person’s basic state pension. When you reach State Pension age, your pension is reduced by an equivalent amount. The State deduction does not apply to benefits built up after 30 June 2009.
State Pension age
Currently it is 65 for men and 60 for women, but is to be equalised at 65 over a 10-year phasing-in period starting in 2010. Subject to the note below, it is the age from which the State deduction
is applied.
Please note: for women the pension built up before 17 May 1990 will have the deduction applied at age 60, and the pension built up after 17 May 1990 but before 30 June 2009 will have the deduction applied at your new State Pension age."

xylophone

And Barclays also have clawback/abatement.

https://forums.moneysavingexpert.com/discussion/4736856 post 43.

xylophone

It is a struggle to live on my current earnings, and now I'm going to loose over £30 a month.

Are you entitled to any benefits?

http://benefits-calculator.turn2us.org.uk/AboutYou

Have you obtained a new state pension statement?

https://www.gov.uk/state-pension-statement

nboatee

Thank you for your replies. I realise that my pension provider is still working under the old ages for State Pension, however the government harmonised the S.P. ages for male and female to equal, in part due to the Europian Equality Act, i.e. men and woment now recieve their S.P. at the same age, therefore why are women penilised by some pensions such as mine. Surely they are acting unlawfully by not treating men and women equal.

jamesd

It appears that you will have a second boost removed when you reach your state pension age, the one for service from 17 May 1990. depending on when you worked for the bank this removal could be higher or lower than the one that's just happened. They can probably tell you what your final pension level will be in today's money if you ask.

The drop is presumably surprising for you but it isn't illegal because the scheme was having members accrue benefits to the correct state pension age at the times when the contributions to the scheme were made. When the state pension age change was announced, the scheme changed to allow for that for new accruals after the change was announced.

It is discriminatory. The female members of the scheme and of the state pension are the beneficiaries of the discrimination. It is not in your immediate financial interest to have the discriminations removed because that would mean less income for you. You're not asking for removal of discrimination, you're asking for increased discrimination in your favour.