Government to inflation proof GMP of public sector ...

greenglide

The reasoning behind the choice of the Dec 2018 date seems a bit strange.

It is until the pension ages are equalised in 2018 (brought forward from 2020).

I assume it is in case there are complaints about discrimination against women who would have got the SP under the old rules with the GMP indexed but the equalising meant they now get nSP with no GMP indexing.

GunJack

rosehip wrote: »

I'm glad the public sector is being looked after. I'm in a private scheme so my gmp won't be uprated but of course I'm only too pleased to work until I'm 90 to pay for the public sector increases.

at least you'll have been paid more than an equivalent-level Civil Service job through your career...

...not sure about local govt, can't comment...

zagfles

greenglide wrote: »

It is until the pension ages are equalised in 2018 (brought forward from 2020).

I assume it is in case there are complaints about discrimination against women who would have got the SP under the old rules with the GMP indexed but the equalising meant they now get nSP with no GMP indexing.

That doesn't really makes sense. A man of the same age would also be in nSP, so would be in the same position. If it's the equalisation process that's causing the problem it would apply after Dec 2018 too.

I suppose there might be a very slight element of difference because the GMP non-indexation would start a bit earlier for a woman, but there again for a woman it's still based on age 60, so would be increased by 1/7% a week from 60 to SPA as I understand it. Mind you I think that's franked if still a contributing member so probably doesn't make a difference.

So yes there might be a slight element of difference but I can't believe that's the real reason. If it was they could correct it in a much cheaper way than indexing the GMP in the occ scheme for both men and women who retire Apr 16 - Dec 18.

greenglide

On the Web site it does say "This will ensure public service pension payments to these individuals continue to be equal between men and women.".

This and the choice of dates, ending in December 2018 indicates that it is something to do with equalisation but not entirely sure what. There was some detail on the pensions expert website but it wants me to register to read it, something it didn't ask before.

woolly_wombat

rosehip wrote: »

I'm glad the public sector is being looked after. I'm in a private scheme so my gmp won't be uprated but of course I'm only too pleased to work until I'm 90 to pay for the public sector increases.

To be fair, gmps in deferred private schemes for leavers between 6 April 1978 and 5 April 1988 subject to 'fixed rate' revaluation have increased by 8.5% pa. That looks generous in today's financial climate.

Gmps in deferred public sector schemes have tended to use a different form of revaluation based on national average earnings, which has turned out to be less generous in today's financial climate.

xylophone

To be fair, gmps in deferred private schemes for leavers between 6 April 1978 and 5 April 1988 subject to 'fixed rate' revaluation have increased by 8.5% pa. That looks generous in today's financial climate.

Gmps in deferred public sector schemes have tended to use a different form of revaluation based on national average earnings, which has turned out to be less generous in today's financial climate.

This is not quite as clear cut as it seems.

Under the old system, at state pension age, when the COD was calculated, those who had been subject to FiRR tended to find that their COD was so high in relation to the pre 97 ASP, that their chance of receiving any increase on pre 88 GMP (scheme not liable), or anything above 3% on post 88 GMP (scheme not liable) was postponed, often for a very long time.

Those with FuRR were not similarly affected because at SRA the ASP and COD would be virtually equal (or ASP could be higher than COD) so that their GMP would be inflation linked through the state scheme.

greenglide

To be fair, gmps in deferred private schemes for leavers between 6 April 1978 and 5 April 1988 subject to 'fixed rate' revaluation have increased by 8.5% pa. That looks generous in today's financial climate.

Gmps in deferred public sector schemes have tended to use a different form of revaluation based on national average earnings, which has turned out to be less generous in today's financial climate.

Which matters to the scheme (higher GMP = less to inflation proof) but the pensioner would generally not know that (or really care) and would assume that it was inflation proofed in their State Pension.

Whether they would realise that this was the "Uprating of Contracted-Out Deduction Increments" on the SP uprating notification is debatable and the single figure given would not give the slightest clue as to how it was arrived at - multiple schemes, pre or post 88, how much is actually payable after the AP / COD had equalised itself.

It is complicated!

molerat

There is only one real choice for them otherwise in a few years I can see the headlines - "War heroes denied pension increase by uncaring government".