GMP – Have I Been Short-Changed?

wary

In brief … I changed job late 1989 and my accrued benefits were transferred from my employer’s DB scheme into the new DB scheme … and the latter was transferred into a Section 32 in 1994. I was contracted out of SERPS throughout.

I’ve been wading through the mound of documentation just received from the insurance company (S32 providers), and it includes the application/transfer form as completed by my employer’s financial advisers (the brokers). The specified pre & post 06-04-1988 GMP weekly figures seem roughly proportional to the length of service for the respective periods, and the insurer’s calculations show they revalued these to SPA to derive a GMP which is more than double the figure they’ve quoted me throughout …

... A few months after commencement, Social Security notified them (as I believe is the norm) of the GMP figure, but was based solely on the time spent in Scheme B without taking into account the transfer into it from Scheme A. In the documentation provided, there’s no evidence that the insurers ever requested details of Scheme A, either as part of the original application/transfer or as part of an investigation into the discrepancy. It seems that they simply discarded the original figures and just went with the HMRC one without verifying the reason for this discrepancy.

1) Surely that’s not correct? Surely their GMP calculations should also take into account the GMP that Scheme B inherited from Scheme A?

2) Who would ordinarily request the GMP figure from HRMC? I’m guessing that in this instance, it would have been the insurers and that it should have been requested for both schemes?

3) If I have indeed been short-changed with the GMP value, how should I proceed? I’ll contact the insurers in the first instance but I’m wondering how feasible it will now be to prove the true GMP figure. Will HMRC still hold all the necessary contracting-out details including the schemes into which contributions were paid? Proving that my Scheme A benefits were transferred into Scheme B may be more problematic, especially as Scheme B is closed … although the 1994 application form would support it.

xylophone

https://forums.moneysavingexpert.com/discussion/5529455 post 8 may be of interest.

Have you obtained a new state pension statement?

agarnett

Your concern is one I share in relation to a later Section 32 policy I was landed with where the employer's financial adviser looks to have taken shortcuts over individual members' GMP considerations, in the haste to wind up a DB scheme to satisfy the financial directors at their employer masters.

My recollection was that HMRC were to cease being in a position to provide recalculated GMP entitlements to scheme administrators sometime in 2017 or possibly early 2018. I think there was more written about it a year or so ago than now.

However, this may give a current clue:
https://www.gov.uk/guidance/nispi-pension-schemes-reconciliation-services
but I am not sure whether the so-called Scheme Reconciliation Service was ever available for members queries, and it looks as if the shutters have gone down already for any scheme who did not pre-register their intention to use the service.

The Barnett Waddington briefing paper linked to in the other thread post#8 xylophone mentions is interesting in that it says

"Following this, from December 2018 HMRC is planning to send individuals information about
their contracting-out history"

So if an obsolete scheme hasn't bothered to reconcile their idea of proper entitlement to GMP with HMRC's own records, I wonder what recourse we'll be given if there is an anomaly uncovered after December 2018?

The link I found may give a little hope in the planned timelines of further HMRC service:

December 2018 to April 2020 - HMRC support for queries generated by statements to individuals
April 2016 to April 2046 - GMP Checker (limited HMRC Support)

wary

Thanks guys for the responses. I've looked through the references but as someone who is not pension/finance savvy, it has gone over my head somewhat. It does appear that HMRC has a record of the schemes for which each contracted out person was a member, although I've subsequently been transferred out of both ... and lost GMP from the first along the way. Also appreciate that rules have changed somewhat with the abolition of SERPS.

What I really need to know in simplistic terms is:
a) Did someone f**k up in 1994 when the calculated GMP of my Section 32 policy excluded the GMP of the transfer into Scheme B from Scheme A back in 1989?
b) If so, who will likely be liable? Would it be the employer/broker for not adequately informing the S32 provider? The S32 provider for not requesting this info and for not investigating the discrepancy? Or HMRC … that’s if they would have had a record of the transfer of my benefits/GMP from Scheme A to Scheme B?
c) What action I can now take to rectify this?

I’ve just checked my Online State Pension Forecast. Should it tell me anything more about my contracting out other than provide a COFE figure? Again I don’t really understand it but is COFE supposed to represent the amount of GMP I can expect? Hopefully not as the figure showing is considerably less than even the figure currently being quoted by the S32 provided!

xylophone

See Page 13 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/512799/your-state-pension-statement-explained-dwp042.pdf

The GMP liability will have been transferred from Scheme A COSR Scheme to Scheme B COSR and thence to the S32.

http://www.financialadvice.net/s32_buy_out_plan/zone/1288

wary

xylophone wrote: »

See Page 13 The GMP liability will have been transferred from Scheme A COSR Scheme to Scheme B COSR and thence to the S32.http://www.financialadvice.net/s32_buy_out_plan/zone/1288

Alas it didn't in my case. Although the application form included weekly figures for the pre-1988 & post-1988 GMP, the figure provided by HMRC was zero for pre-1988 and a pro-rata of the post-1988 figure, basically to align to when I was actually in Scheme B only. It is HMRC's figures that the S32 provider is using, hence excluding Scheme A GMP altogether.

xylophone

Alas it didn't in my case.

Are you absolutely sure of this?

The receiving scheme B would have accepted responsibility for the GMP in Scheme A - as I understand it, full details would have had to be provided by the ceding scheme at the time of transfer.

Records were kept by NICO/HMRC https://www.gov.uk/guidance/nispi-pension-schemes-reconciliation-services

I wonder if a PM to PensionTech might help?

http://forums.moneysavingexpert.com/member.php?u=2275126

wary

Thanks for the link. I tried logging into the GMP checker but it said I'm not authorised, so I guess it must be for companies only.

When benefits are transferred from Scheme A to Scheme B as in my case, should HMRC have been formally notified that the latter had inherited GMP liability from the former? In other words, for a provider later accepting a transfer from Scheme B, should they only need to know of and request details for Scheme B ... and HMRC would know to automatically include the transfer in from Scheme A in its figures?

If so, who should have notified HMRC of the transfer? The owners of Scheme A or of Scheme B?

xylophone

Have a look at this transfer of COSR to COSR form - you will note the details requested regarding the Scheme and HMRC. (Part

http://www.spfo.org.uk/CHttpHandler.ashx?id=17551&p=0

In particular

"'The Scheme' will accept any transferred EPB and/or GMP and/or section 9(2B) rights
• The rate of revaluation 'the Scheme' applies to transferred in GMPs is ***Limited Rate/Fixed
Rate/Section 148 Orders"

I assume that there would have been something similar when your transferred from one scheme to another and then presumably the appropriate documentation when you transferred to S32 with GMP.

Did you try PensionTech?

wary

Thanks again Xylophone. Yeah, I sent PensionTech an PM in the early hours (couldn't sleep due to pension worries!) ... not heard back as yet.

wary

agarnett wrote: »

Your concern is one I share in relation to a later Section 32 policy I was landed with where the employer's financial adviser looks to have taken shortcuts over individual members' GMP considerations, in the haste to wind up a DB scheme to satisfy the financial directors at their employer masters.

Did you manage to get it resolved? If so, how? Thanks