mystery of pensions

pensionnovicehelp

So if I want to retire at 55, 6 years time I'll have enough NI years for my full SP at 67,
But L&G will not let me get my pension at 55, Scottish Widows will allow me at 55 to retire and so does my current pension also with SW.

xylophone

But L&G will not let me get my pension at 55,

Have you read post 5?

Have you checked with L&G whether or not you have "safeguarded benefits"?

pensionnovicehelp

xylophone

When I spoke to L&G yesterday they seemed to suggest if I transferred from them to
another pension "DC" I still would not be able to access the pension until I was 65

I understand "safeguarded benefits" and I may have access to FA through my current employer.

xylophone

When I spoke to L&G yesterday they seemed to suggest if I transferred from them to
another pension "DC" I still would not be able to access the pension until I was 65

I really can't quite make out what is going on here.

Is this L&G policy a S32 with GMP and L&G are saying that the transfer value is not sufficient to cover the GMP so that you can't transfer out?

Or that you can only transfer out to another S32 arrangement?

http://www.thisismoney.co.uk/money/pensions/article-3680749/I-want-pension-freedom-trapped-section-32-buyout-plan.html

If you have access to an adviser, you might consider consulting him just for an explanation.

agarnett

xylophone wrote: »

I really can't quite make out what is going on here.

Is this L&G policy a S32 with GMP ...

I agree, there's a lot of talk of SP and COPE and time to make up the gap in full SP, but if the L&G contract was mine, the first thing I would be doing would be to establish what happened to the mandatory(?) revaluations of GMP since 2000 and continuing to 2033.

From the CAG example discussion I found, I would suggest that GMP in an L&G S32 policy became all or a significant part of "SMP" in L&G parlance on the L&G policy schedule, and in the CAG case the revaluation at a fixed 6.25% was also quoted clearly, presumably also from the policy schedule wording.

Reading between lines I have guessed that pensionnovicehelp had been in an old contracted out FS scheme around 8 years when it was wound up in 2000 and I have guessed it was split into two S32 policies - one with L&G for the pre-1997 GMP liabilities and another with SW thereafter until retirement. I have further proposed that for a private pension scheme, a fixed 6.25%pa revaluation applying for pre-1997 GMP would be typical with a scheme "leaving date" in the year 2000.

Clearly L&G have been coy about this policy in the past, at first not even admitting it existed?

It looks like the OP needs to keep an eye on the most important ball first - or at least the one which could make the biggest difference to everything.

Forecast SP and COPE and extra NI contributions is not the most important ball in play for my money ...

If pensionnovicehelp has not asked L&G about what happened to typical fixed percentage revaluation of GMP (SMP), maybe now is the time, especially if my guess about number of years earned in the old scheme and the OP's salary as at 2000 were in the right ballparks.

I hesitate to raise the OP's expectation beyond the very low levels it currently appears to be, but +6.25%pa compound effect over 33 years on a year 2000 GMP of £3,187.56pa is not a low level matter if there is a chance it has been overlooked.

xylophone

OP - do you have the original Policy Document from L&G?

Do you have a letter from the ceding scheme confirming the arrangement?

xylophone

I hesitate to raise the OP's expectation beyond the very low levels it currently appears to be, but +6.25%pa compound effect over 33 years on a year 2000 GMP of £3,187.56pa is not a low level matter if there is a chance it has been overlooked.

I am wondering whether the L&G policy represents only the 88-97 GMP and the £3187.56 is the leaving GMP revalued at Fixed Rate to age 65.

Presumably the policy will also show that once in payment, the pension must be index linked up to 3%.

agarnett

xylophone wrote: »

I am wondering whether the L&G policy represents only the 88-97 GMP and the £3187.56 is the leaving GMP revalued at Fixed Rate to age 65.

Yes I wondered that too, and that's where years of service under the old FS scheme and an indication of the OP's salary in early 2000 might be a useful yardstick.

If the £3,187.56 has already been revalued then working it backwards using the multiplication factor (100/106.25)^33 would suggest the GMP as at year 2000 would only have been £431pa. I only have my own 88-97 GMP in a contracted out final salary scheme that ended up in a very questionable S32 to compare it with.

Would £431pa unrevalued 88-97 GMP be at all likely for any pension scheme member unless they only had one year service or something? I know normal state pension in early 2000 was about £70pw. £431pa = ~£8pw

Presumably the policy will also show that once in payment, the pension must be index linked up to 3%.

Presumably.

pensionnovicehelp

Contact L&G again,

This letter is further to your request for details of the early retirement value of your pension
benefits under the above arrangement.
As a member of the Sxxxxxxx Sxx UK Employee Benefits Plan you currently have the option to
elect an early retirement pension from your 55th birthday in line with current government
legislation. However at this present time this option is only available on the proviso that any
Secured Minimum Pension (SMP) is covered on attainment of your State Pension Age, i.e. 65th
birthday for males and (currently) 60th birthday for females.
You may not be familiar with the term Secured Minimum Pension (SMP) which was accrued
during your pensionable service with the above company. The Sxxxxxxx Sxx UK Employee
Benefits Plan was contracted-out of the State Earnings Related Pension Scheme (SERPS) and
this benefit is part of the overall State entitlement. It is the minimum level of pension that is
payable in respect of your contracted-out service.
Your pension benefit under this arrangement is predominantly made up, or entirely made up, of
SMP. This means that you are unfortunately not in a position to take early retirement and,
therefore, the earliest date that you may take your retirement benefits is at your Normal
Retirement Date of ??/??/2033. I know that this will be disappointing for you but, as you may
appreciate, the Legal & General is obliged by law to pay your SMP in full at your State
Pension Age
I hope this has helped to clarify the situation and should you have any questions I would be
happy to assist where possible.

pensionnovicehelp

benefits earned after April 1997 were transferred to a S32 Buy-Out policy with Scottish Widows on 30 June

remaining benefits (earned before April 1997 and equal to the value of your Guaranteed Minimum Pension) has been bought-out with Legal & General