Boots Pension Scheme query

Imnoexpert_2

Relative has preserved benefit in the scheme.

The scheme has been a poor communicator over the years and has now sent out information after being 'aware that it is a number of years since you heard from us' Have the rules changed to make them do this I wonder?

Anyway the specific queryb is that they claim the scheme investment performance is as follows
1yr Bonds,cash and Swaps and Pension Funding Partnerships=25.5%
3 yr for same 12.8%

If true this seems like a very good year. Is it true? How have they done it?

I've googled but can't find much about the scheme and it's investments. Anyone care to comment or know how to check out the scheme?

dunstonh

The scheme has been a poor communicator over the years

Once one of the great pension schemes of the country. You mentioned he isnt currently employed by them. So, there wouldnt be any communication from them after the final benefit statement after leaving employment. This is not like a personal pension where you get at least annual statements.

If true this seems like a very good year. Is it true? How have they done it?

It is irrelevant as it has no direct impact on your relative's pension. It is just information on the underlying fund. Your relative is not invested in the underlying fund. It is more a statement of health of the fund.

hyubh

Imnoexpert wrote: »

The scheme has been a poor communicator over the years and has now sent out information after being 'aware that it is a number of years since you heard from us'

Like dunstonh says, it is unusual for a DB scheme (LGPS is an exception) to produce deferred annual benefit statements.

Have the rules changed to make them do this I wonder?

Not that I'm aware, though there might be some miscellaneous information requirements knocking around.

Anyway the specific query is that they claim the scheme investment performance is as follows
1yr Bonds,cash and Swaps and Pension Funding Partnerships=25.5%
3 yr for same 12.8%

Bit vague, though insofar as there genuinely is a wonderful return, that's possibly a bad thing (given the Boots scheme is closed) as it implies the trustees are getting a bit desperate and gambling. (Context: the Boots scheme got a bit of fame 15 years ago when it did the opposite and moved everything into bonds; lasted only for a few years before they went back into equities.)

Keep in mind that with a DB scheme, from the individual member's point of view the 'ideal' situation is for the sponsoring employer(s) to be putting in a lot of money and investments to be conservative, given the amount of pension due has already been determined. With DC, in contrast, the individual member typically has a choice of their own investments with the amount of pension 'due' being dependant on how those investments perform.

Imnoexpert_2

Thanks.

I know that my knowing stuff is irrelevant and all this is controlled by others, and that some areas of the financial services industry are too secret or too difficult for we mere punters to understand.

I suppose my reason for asking is because I was a bit intrigued by the lack of transparency. I am an ex Equitable Life customer and I now try and understand as much as I can about such things -as they say if you don't understand it don't invest in it.

So where do you find out about schemes like this? Is there a trustees report?

secondly the performance seems too good to be true. and you also know what they say about that. also if I knew the investment strategy maybe I could copy it.

xylophone

Does the relative not have a scheme booklet? This normally gives details of how deferred pensions are treated.

https://www.barnett-waddingham.co.uk/comment-insight/blog/2012/07/24/revaluation-for-early-leavers/

https://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/18/what-is-a-gmp/

http://www.ahb-ukpensionportal.co.uk/boots-pension-scheme/benefits-summary/

Imnoexpert_2

Thanks again

No there is no scheme booklet available to me. Relative unlike you and I (and probably like many if not most others) doesn't keep paperwork for years.

If I didn't understand defined benefit before, and I think I did, I have no excuse now.

Actually statements are still useful because there is a cost of living uplift each year, with a maximum, based on RPI. It is good to know the amount of pension in money rather than the percentage of final salary and then have to calculate the effect of the rpi for yourself. Any reader of the index linked bonds thread will appreciate that this concept is not well understood:-). Relative can't even remember what the final salary was!

Perhaps I need to contact Boots and request information.

mgdavid

Imnoexpert wrote: »

......

Perhaps I need to contact Boots and request information.

unless you have a lasting power of attorney the relative will need to do that themselves....