Whose paying for my GMP?

hyubh

paul_hannah wrote: »

"Surely you aren't expecting to have the pre-88 GMP 'for free'? "
honestly, i wouldnt know?

Indeed, which is why you posted here. Basic point: if you had not transferred, the GMP would still be due, only as part of your final salary pension benefits.

what benefit is it anyway?

It's a defined benefit pension.

But i honestly didn't see why im footing the bill for my company opting out of the SERPS

You aren't 'footing the bill'. The company pension scheme was contracted out to help fund it; the funding involved for your own pension, including that for the GMP, was then transferred into this money purchase-with-GMP account, whatever it was/is exactly. If you hadn't contracted-out in the first place, there would have been no GMP, and therefore your money purchase account would have been much smaller.

it wasn't a choice offered to me

Right, because providing a GMP was a statutory requirement for a scheme to be contracted-out back in the 80s.

and now the GMP is being funded by my investments.

Where did the money come from in the first place...?

Other guys i work with have exactly the same pension as me, except they were not in the old pension scheme for the required 5 years to obtain the Special transfer credit ( they were apprentices that had no previous pension)

You've got the additional money purchase benefits! If they weren't in the scheme back in the early 80s, then presumably they've also got a much lower/no pre-88 GMP. (I doubt any excess [i.e. DB pension beyond the GMP] from early 80s they have will be much.)

xylophone

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

Looking at the transcript from Portland, I think that your original pension was transferred into a Money Purchase with Defined Benefit underpin - part of the DB underpin is the GMP.

http://www.mycompanypension.co.uk/What-is-a-Money-Purchase-Scheme-with-a-Defined-Benefit-Underpin-Pensioner-Members-DB

JLT will be the pension administrators - they should be in a position to provide a full explanation of your benefits under the scheme but a couple of other posters have experienced some difficulties with administrators in this respect.

paul_hannah

This is my first time on any such forum.
ive spent weeks with JLT asking questions and never fully understanding the answers.
Pensions for the average guy like me are so complicated, and not until you are in a position to take early retirement do all these facts land in your lap, and you have to try and make sense of it all, so thanks to you all for taking the time to explain things in simpler terms.
i have three options on my pension estimates,
Option 1 is Combined tax free lump sum and a reduced annual pension.(Includes pension savings)
Option 2 is defined benefit tax free lump sum,a reduced annual pension and pension savings in addition.
Option 3 full defined benefit pension and pension savings in addition.
Im not sure its wise to put actual figures up online, so its difficult to ask for an opinion as to what seems the best of the three options, but the "Pension savings" part if taken in addition is available as 25% tax free, not sure what you would do with the rest? no investment options on my papaerwork.

xylophone

If you are completely at sea, you might benefit from taking qualified, independent financial advice.

https://directory.moneyadviceservice.org.uk/en

You will pay a fee ( ring round several to establish) but it would assist you to understand your options and choose the most appropriate option for your circumstances.

If you are giving up paid work, you may wish to consider voluntary NI so as to bring your state pension up to NSP.