Gmp

Zookat

Hi all , can anyone help me understand this table from my pension provider .

I can not post links , but I saw another user did this method to get his link across

Type in http://

Tinypic.


com/r/ohohup/9

hyubh

Zookat wrote: »

Hi all , can anyone help me understand this table from my pension provider .

What particular aspects are you interested in? Tricky to guess what you're actually interested in. Also would be useful to have a bit of background - on the face of it, the latest element of your pension is already in payment, but the earlier parts are still 'preserved' (i.e. not taken)...?

Zookat

Hi hyubh , sorry I did not post more , was not sure if the thread was going to be allowed .

I have tried contacting my provider , but had no reply .

As you say the top part shows preserved and it is this I do not understand . And they also show a few different amounts of GMP ?

I will be 65 in May , I started taking this pension in 2004 . I left that job in 1994 .

xylophone

Are you male?

Are you shortly to draw a state pension and if so have you obtained a state pension statement?

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

I did manage to pick up your link but managed to lose it and cannot get it again.

If you add together the GMP elements and the excess, does it come to the total annual value of your pension?

With regard to GMP, see

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/

Assuming that you are male, you are just about to reach GMP age.

After that, your pension provider has no obligation to increase the pre 88 GMP element of your pension, and the post 88 element only up to 3% CPI- the excess will increase by scheme rules.

Does the above help at all?

hyubh

Zookat wrote: »

As you say the top part shows preserved and it is this I do not understand. And they also show a few different amounts of GMP?

The only material split for the GMP is between pre- and post-88, and only then once the GMP formally comes into payment, which assuming your male will be at 65 (GMP age for women is 60). From that point, the pre-88 GMP won't increase but the post-88 GMP will (CPI capped to 3%). Until then, all your GMP will likely 'revalue' (i.e. increase while waiting to be formally due) by the same method, probably by so-called 'fixed rate' (7% per year, given when you left). The table doesn't explicitly state the GMP revaluation method though. Also, the fact the GMP is technically still 'preserved' and so 'revaluing' rather than 'increasing' doesn't mean your current pension doesn't include it as excess (see below).

In contrast to the pre- and post-88 split, the pre-90/90-equ/equ-97 ones aren't about the GMP elements themselves, but about what excess element they relate to. In the early 90s there was a European ruling that banned different normal pension ages for men and women. Schemes were allowed to adopt a transitional accrual method for a few years, so I'd imagine that the 'pre-90' excess has different NPAs for men and women (likely 65 vs. 60), the 90-equ[alisation date] excess has the transitional accrual pattern, and equ[alisation date]-97 is when normal pension ages were fully equalised (probably to 65 for both men and women).

Lastly, the relevance of 1997 is because that year there were big changes in how contracting out worked - GMP accrual stopped, and excess pensions earned from that date now had a statutory minimum increase level in payment (RPI capped to 5%). However, it looks the scheme granted pension increases on excess at that level already. Moreover, the different NPAs are all irrelevant because you started drawing the pension well before any of them.

As for the basic question of why preserved data is shown in the first place... until you reach GMP age, the scheme doesn't have to pay the GMP. It could be that you have effectively been getting the GMP anyway though, as excess in payment - that's what schemes tend to do (correspondingly, if the GMP wouldn't be covered at 65, then schemes would frequently prevent early retirement in the first place). However, even then there's still usually an adjustment of sorts at GMP age, if only to ensure the pre- and post-88 GMP gets the proper (lower) increases actually now due.

Zookat

Thanks guys , a lot to take in , I will have a good read , thank you both .

I am male , live in Cyprus , although that will not affect anything . My state pension claim has been approved by DWP , payable in May . I have not lived in the uk since 2006 and also not been employed since 2006 .

Zookat

Well I have finally heard from my pension provider . As xylophone suggested , adding all the GMP amounts together does count for something , not sure what but it is not as much as I am already getting . They have stated that what affect it will have on my pension can not be calculated until they hear from the DWP .
They also said the pension I have been getting for over 10 years includes being contracted out , so there will be no extra for that .
This brings me to something I do not understand , someone who paid SERPS can not claim it until they reach SPA , so have I benefitted taking my works pension early ?
Only a few months to go now , so I will let you all know what comes of it all .

Silvertabby

Zookat wrote: »

Well I have finally heard from my pension provider . As xylophone suggested , adding all the GMP amounts together does count for something , not sure what but it is not as much as I am already getting . They have stated that what affect it will have on my pension can not be calculated until they hear from the DWP .
They also said the pension I have been getting for over 10 years includes being contracted out , so there will be no extra for that .
This brings me to something I do not understand , someone who paid SERPS can not claim it until they reach SPA , so have I benefitted taking my works pension early ?
Only a few months to go now , so I will let you all know what comes of it all .

That was indeed one of the benefits of contracting out.