Final Salary Pension - value/transfer etc

Froggitt

Mrs Frog asked for and received info about her pension from company she left in 1996. Looking for a translation into English please!!!

GMP to Apr 88 £4
GMP to 1996 £378
Excess over GMP to 1996 £1099
Total deferred pension at date of leaving £1482.

Benefit details, revaluation rate:
Pre/post 88 GMP - S148 or Limited
Excess pens to 2 May 2006 Higher of S148 or RPI/CPI max 5%
Excess pens from 1 May 2006 RPI/CPI max 5%

Retirement increases:
RPI min 3%, max 5%

Transfer value £126,087.

Then, totally separately, on the website portal, it says

The value of your pension as at 5th April is £3004pa payable at your normal retirement age of 62.

So, what does all that first lot of stuff mean? Has the deferred pension risen from £1482pa to £3004pa in the 20 years since she left? Will it go up further in the 10 years left till she is 62?

Is the transfer value one of these 40x lump sums we read about in the papers?

xylophone

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

https://www.barnett-waddingham.co.uk/comment-insight/blog/2012/07/24/revaluation-for-early-leavers/

The pension will be index linked in deferment ("revalued") to scheme pension age.


Once in payment, the scheme has no obligation to index link (increase/escalate) the pre 88 GMP or the post 88 GMP beyond 3% RPI.

(They could have chosen CPI for this but appear to have stuck with RPI.)

They will index link (increase/escalate) the excess over GMP to RPI max 5%.


The transfer value is what they would pay should your wife choose to transfer out to another Scheme.

https://www.ftadviser.com/pensions/2017/05/04/calculating-pension-transfer-values/

If your wife wishes to transfer out, she will need the advice of a Pension Transfer Specialist.

http://www.pruadviser.co.uk/content/knowledge/technical-centre/pension_transfer_conversion/

Has your wife obtained a new state pension statement?

https://www.gov.uk/check-state-pension

Froggitt

Yes she has thanks. She now knows why her contracted out pension is worth less than an uncontracted out one (ie this pension worth £3k pa), and has bought a couple of cheap years.

Money_Help

From what you are saying, to keep things really simple, the only thing you really need to know is that the pension due at 62 is £3,004 per annum. This will increase as your wife approaches 62.

Alternatively if you didn't need the income and following professional advice it was appropriate you could give up the income and transfer the £126,067 to a personal pension and drawdown what you like. There are pros and cons of a transfer so professional advice is absolutely essential. A transfer may not be appropriate.