still trying to understand

xylophone

The NRA for the scheme is the same as GMP age.

OP, what was the excess over GMP on your leaving statement?



Your GMP is revaluing at fixed rate

You left in 1996 so the GMP is revaluing at 7% per annum. See first link in my post above.

When do you reach 65?

How does the excess over GMP revalue in deferment - see the second link in my post above which gives the statutory position but your scheme may be more generous.

You can ask the administrators for the figure for revalued GMP at GMP age (65) which coincides with your scheme pension age.

You can ask for revaluation to date on the excess.

When do you reach state pension age? Have you obtained a new state pension statement?

assesser

Xyophone,
You seem to be very knowledgeable in pension verse, I am not
I reach pension age in 2025, last statement was last August quoted figures above.
I have read the links in your post, but still confused.
Can you put in real simple terms for a pension novice like myself

assesser

On leaving statement I see nothing regarding exceed over GMP when leaving

xylophone

What normally happened when a person left a Defined Benefits Scheme was that the Certificate of deferred benefits showed the pre 88 GMP, the post 88 GMP and the excess over the two.

For example, total pension at leaving £1000 pa of which £100 per annum pre 88 GMP, £80 per annum post 88 GMP, £820 excess.

The scheme Trustee would choose the formula for revaluation in deferment for the GMP portion of the pension - it might be fixed rate, full rate, or limited rate - this is explained in the first link.

The excess would revalue in deferment by scheme rules or at least by the statutory formula - see link.

Looking again at the figures you have provided, I am wondering whether
your excess on leaving was £3422 - £870.48) = £2551.42.

The Scheme must pay you at least your revalued GMP at 65.

They should also pay you the revalued excess at 65.

I suggest that you contact the Scheme Administrators and ask them to confirm your total GMP at leaving, the total excess at leaving, the total GMP revalued at 7% Fixed Rate to age 65, and the current value of the excess over GMP.

Ask too how the excess over GMP is revaluing in deferment.

assesser

Thank you for your response
Home now so looking at statements again, at bottom of statement it does say, the pension figures above include any relevant amounts relating to any GMP or PR pension accured as a result of being contracted out during scheme.

Now can I ask an impossible question,
Given the figures quoted as £10,706 PA, or lump tax free sum £ 45,185 plus £6777 PA, , depending on the figures they give when asking the questions to pension fund, can it make a big difference one way or the other in the value

xylophone

Have a look at this

http://www.thisismoney.co.uk/money/pensions/article-2319419/Why-lump-sums-dont-add-final-salary-pensions.html

In your case, the "commutation factor" is about 11.5 - that is to say, every £1 of pension given up buys £11.50 of lump sum.

This is not a brilliant commutation rate.

xylophone

Don't forget to get a new state pension statement.

https://www.gov.uk/government/publications/application-for-a-state-pension-statement

assesser

Thank you
Already got state pension forecast £149 , is there anything I can do to get a better commutation rate , need to take some as a lump to finish mortgage off

xylophone

Already got state pension forecast £149 , is there anything I can do to get a better commutation rate , need to take some as a lump to finish mortgage off

The commutation factor is set by the Scheme Actuary.

https://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/06/what-is-commutation/

jamesd

It's usually better not to take a higher lump sum to pay off a mortgage, but better instead to use the higher income to pay the mortgage, over a longer time if needed.

An alternative can be use of money transfer credit cards with use of repeat balance transfer deals to extend the cheap time. If for some reason that fails, an equity release mortgage can be used to get rid of the original mortgage and if you like you can repay the equity release mortgage on a relaxed schedule. With some mainstream lenders offering normal mortgages to age 85 that's probably a better buy than equity release, though.