CETV worth transferring?

xylophone

I also have a Midland Bank DB pension

Hm.....

https://forums.moneysavingexpert.com/discussion/3886143

Have you kept you scheme booklet and statement of deferred benefits on leaving employment?

Parking_Trouble

Thanks Xylophone. Been away for a few days, hence the delay.

The only scheme documentation I have is what I recently downloaded from the Willis Towers Watson website.

I was employed by Midland Bank from 08/74 - 10/81

I had very little contact with them but recently got access to the WTW site.

Normal Retirement age was 60 but increased to 65 in 2010 however it look like I can take it at 60.

Extract from booklet:

If you joined the Midland Section after 1974, your pension will be calculated to take into account a single person’s basic state pension. When you reach State Pension age, your pension is reduced
by an equivalent amount. The State deduction does not apply to benefits
built up after 30 June 2009.

Normal retirement age is the age that you would normally retire from the Scheme. Currently it is age 60, but from 1 April 2010 it will increase to age 65. This increase in normal retirement age only affects your pension rights that relate to your pensionable service from 1 April 2010. This means that you can still retire at age 60, but the proportion of your pension that has built up after 1 April 2010 will be subject to an early retirement reduction (unless you choose to contribute an additional 3% of pensionable salary – see page 11 for more details).

I assume I can take my revalued entitlement from age 60 even though they have my NRA as 65?

GMP and Pension at date of leaving is the same - £153.92
It seems there is no excess.

I assume It will be revalued at 8.5% pa for 37 years ?? Assume NRD in 2018
There is nothing about revaluation calculations in the booklet.

Can I therefore expect around £3,000 pa ? They are only offering £15,300 transfer value.

I have spoken to Equiniti about the revalued figure for the SKF pension and also challenging their error where they think I worked for Beechams.
That should bring NRA to 62 rather than 65.

I may work for a year or so after age 60.

My aim is to take AVCs as lump sum to pay off remaining mortgage and other smallish debt and take my main DB pension non-reduced, plus the Midland bank pension.

I know I will pay a lot in tax but I really want to raise my disposable income for a year or so.

xylophone

I'd contact TW and ask the questions.

It seems that your NRA would be 60 - check.

It is likely that Fixed Rate would be used to revalue the GMP.

Note what is said about reduction at SPA - check what this will mean in your case.

xylophone

And another thought, if this is all pre 88 GMP, there is no obligation on the scheme to inflation link the pension in payment after GMP age.

Check this with TW.

Parking_Trouble

Thanks. The questions have been asked so let's see what they come back with.

jamesd

When you get the numbers it's worth comparing those pensions to how much state pension increase you could get by deferring claiming that. It's increased by 5.6% per year of deferral, pro-rated for parts of a year.

Parking_Trouble

jamesd wrote: »

When you get the numbers it's worth comparing those pensions to how much state pension increase you could get by deferring claiming that. It's increased by 5.6% per year of deferral, pro-rated for parts of a year.

Thanks, I will look into that.

Parking_Trouble

Update from Glaxo pension administrator . My retirement age is indeed 62 not 65. Waiting for revaluation figures.

Update from Midland Bank administrator.

1. I can confirm that as you have GMP only benefits which are payable from age 65, you are unable to retire earlier than the GMP entitlement age of 65.
2. I can confirm that GMP is increased using the Section 148 factors set by the government. Your GMP is payable from age 65 and will be calculated when you reach this age.
3. Your pension in payment will not receive increases from the scheme.
4. No reduction will be applied to your GMP benefit from the scheme when you start drawing your state pension.

Silvertabby

Update from Midland Bank administrator.

1. I can confirm that as you have GMP only benefits which are payable from age 65, you are unable to retire earlier than the GMP entitlement age of 65.
2. I can confirm that GMP is increased using the Section 148 factors set by the government. Your GMP is payable from age 65 and will be calculated when you reach this age.
3. Your pension in payment will not receive increases from the scheme.
4. No reduction will be applied to your GMP benefit from the scheme when you start drawing your state pension.

That's normal for any pension scheme when the total pension equals/is less than the GMP. You'll not be able to commute (ie, take 25% tax free cash in lieu of pension) for the same reason.

xylophone

S148 Orders = Full Rate revaluation not Fixed Rate ( unusual in non - public service type schemes).

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