Pension coming up - advice please

xylophone

I am no expert but know a bit about DB schemes.

Don't forget to get the questions about index linking/increase in payment/widow's benefits clarified!

xylophone

One thing xylophone has diplomatically not said is that if you had asked the same question two years ago you almost certainly would have received a very different answer.

The OP becomes eligible for his state pension in August therefore is not affected by the new state pension.

With regard to his deferred defined benefits pension, had his GMP (which is all pre 88) revalued by full rate in deferment, then it is likely that his pre 97 ASP would have been roughly equal to his COD and that he would be receiving index linking on this from April next.

However, his GMP has been revalued by fixed rate (8.5%) so it is probable that his COD is much higher than his pre 97 ASP - if this is the case then he will receive no index linking through the state pension until the one is greater than the other.

He'll know his situation when he has received his letter from the DWP.

See https://forums.moneysavingexpert.com/discussion/4532605 post 12

This thread is also of interest because the poster (howy22) was given erroneous information about his COD.

It transpired that his scheme used full rate revaluation but the DWP had been advised that fixed rate had been used. See post 26 onwards.

agarnett

xylophone wrote:

me wrote:

One thing xylophone has diplomatically not said is that if you had asked the same question two years ago you almost certainly would have received a very different answer.

The OP becomes eligible for his state pension in August therefore is not affected by the new state pension.

True, but is it not also true that all state-funded index-linking of pre 1988 earned GMP from within private sector DB schemes will cease with effect from April 2016 which is only 9½ months away now?

I really appreciate, as do many here on MSE, your clear insights into these things, xylophone, but I still feel there is still a great public consciousness to be awakened on much of what is in the reforms that affects those who have been contracted out for significant periods, and who have complex GMP calculations driving significant parts of their private sector DB scheme pension entitlements.

xylophone wrote:

However, his GMP has been revalued by fixed rate (8.5%) so it is probable that his COD is much higher than his pre 97 ASP - if this is the case then he will receive no index linking through the state pension until the one is greater than the other.

I also appreciate that you have urged previously that any post retirement private sector DB scheme GMP index-linking has normally been paid along with the State Pension, not as part of the private scheme pension payments.

I also am beginning to understand the pre-condition that triggers the post-retirement index-linking i.e. pre-97 ASP needing to be greater than COD, which will take time if GMP fixed revaluations prior to retirement have been done at the generous 8.5% as opposed to lower fixed rates or NAE rates.

Are you able to tell us if, once it is triggered and starts, the post retirement index-linking will continue ad infinitum for someone like the OP retiring before April 2016, or will it stop as with post April 2016 retirees?

xylophone

Are you able to tell us if, once it is triggered and starts, the post retirement index-linking will continue ad infinitum for someone like the OP retiring before April 2016, or will it stop as with post April 2016 retirees?

As far as I know, if your date of birth puts you into the current state pension arrangement, then you will continue to receive your pension under the rules relating to that arrangement.

greenglide

xylophone wrote: »

As far as I know, if your date of birth puts you into the current state pension arrangement, then you will continue to receive your pension under the rules relating to that arrangement.

Yes - they categorically do continue unchanged for anyone with an SPa date before 6/4/2016 like the rest of the nSP changes.