GMP query.

henrycat95

I'm due to retire at the end of October 2017 and therefore come under the new flat rate scheme.

I've had a forecast and they say I have 40 qualifying years and that my starting pension will be £132-16 per week - I was contracted out for 6 years and 100 days between 1977 and 1983 when I worked for the then Gas Board (now National Grid).

I've also got a forecast from National Grid for this period and it states.

Final pension remuneration is £4983-16 which pays an index linked pension of £1620-92.
Current total GMP included in the above £2193-88.
Total GMP at exit is £189-80.
Post April 1988 GMP at exit is £nil.

It also pays a widows pension of £806-82 (I'm divorced anyway) and a lump sum of £1852-02 if I die before retirement.

The bit that confuses me is the current GMP figure is higher then the stated pension so I am unsure what I would actually get on these figures - and, although I will at the time tell them I'm not married, would that change anything?

xylophone

When you left the Gas Board you became a deferred pensioner of the Scheme.

On leaving, were you supplied with a statement showing your pension entitlement at that time?

This would have shown your GMP and the excess over GMP.


From the above it would appear that your GMP on leaving was £189.80
There seems to be no figure for the excess over GMP

Your pension would have been revalued in deferment - the GMP would have to have been revalued in deferment either by fixed rate or full rate - I would have thought full rate for this nationalised industry.

I am assuming that the excess revalued under scheme rules which may well have been more generous than the statutory basis.

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

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

One would expect a figure for your total annual pension split between GMP and excess over GMP.

The Scheme must pay you at least your revalued GMP at GMP age (65 for men).

https://www.nationalgridpensions.com/393/713

Once your pension comes into payment, the scheme is not bound to index link that part of your pension that relates to pre 88 GMP.



Looking at the figures provided, I am wondering whether the total annual pension is the revalued GMP plus what is referred to as the index linked pension.

I suggest you try the portal link above or ring the administrator for clarification.

henrycat95

Many thanks for your very helpful reply xylophone.

I shall read your links and then give the admin a ring to clarify.

Regards.

rosehip

@xylophone, the reason the scheme won't pay inflation increases on GMP is because the government was supposed to pay them but has reneged on that agreement under the new "flat rate" that isn't a flat rate pension. However, I see the government has backtracked and inflation increases on GMPs on public sector pensions will now be paid (by the taxpayer). But those of us in private pensions can go hang - not enough votes among us I suppose. I can't see this is fair at all.

xylophone

@xylophone, the reason the scheme won't pay inflation increases on GMP is because the government was supposed to pay them

The situation is rather more complicated than this (pre 88/post 88) and the situation for those (mostly private sector) who were deferred pensioners whose GMP increased by fixed, rather than full, rate so that their COD was greater than their pre 97 ASP.

https://www.gov.uk/government/news/government-one-step-closer-to-introducing-new-state-pension-this-year

The situation regarding GMP inflation proofing has been extensively debated on the forum, including whether the Government would require the public service employers to index link pre 88 GMP and the excess over 3% on post 88 GMP, if nothing else because of the promise under the last public service pension makeover that there would be no changes for 25 years.

It is already the case that the public service employers continue to index link the GMP up to state pension age where this is later than GMP age.

You will note that there is still no clarity about what will happen to the indexing of GMP for those who reach state pension age after 2018.

With regard to private sector workers, these pensioners will be dependent on what the Trustees decide.