Pension Forecast Confusion

xylophone

Although she was contacted out for 2 years, she has never received a statement from whoever she was contacted out with,

Try here

https://www.gov.uk/find-pension-contact-details

xylophone

With regard to not receiving a statement from the pension provider, deferred pensioners of one scheme I know were simply told to contact the administrator of the pension at Scheme Pension Age - no annual statements were provided.

Your wife may have a statement of deferred benefits provided to her at the time she left the employment in question.

Silvertabby

DailyDaz wrote: »

Although she was contacted out for 2 years, she has never received a statement from whoever she was contacted out with, neither aware of any other private pension, hence the confusion. The Gov statement says she needs to pay a voluntary of £733.20 by 5 April 2023 but may increase after 5 April 2019. I need to find where these contracted out payments went !!!!!

When was this 2 years? If it was before 1988, then she may have needed 5 years service to be entitled to actual pension rights. If after 1988, then she may have needed a minimum of 2 years - 'almost 2 years' won't do it.

Hopefully, she will have a pension tucked away somewhere - but at the very least she should be due a refund of her contributions (and a pension fund payment of her CEP to HMRC).

Who did she work for?

DailyDaz

Things have taken a bit of a sinister turn. It appears in 1992 - 1994 she worked for an employer who saw fit to deduct tax and NI from their wages, but not actually pay this money to the government. This resulted in an inspectorate from the tax office turning up at the door and placing the company into liquidation to obtain missing funds. Not sure what the result was.
Could this be the resultant hole in the funds? I'll still pursue the contracted out part.
The statement for these years reads :-

1993-94 Full year
You have contributions from

Paid employment: £542.53

National Insurance credits: 1 week

This week may have been added to your record if you were ill/disabled, unemployed, caring for someone full-time or on jury service.

1992-93 Full year
You have contributions from

Paid employment: £434.65

National Insurance credits: 4 weeks

These may have been added to your record if you were ill/disabled, unemployed, caring for someone full-time or on jury service.

1991-92 Full year
You have contributions from

Paid employment: £24.43

Voluntary: 43 weeks



All other years read as this:-

1990-91 Full year
You have contributions from

Paid employment: £425.73

Except for 1975 - 1977

1976-77 Full year
You have contributions from

Paid employment: £29.68

National Insurance credits: 83 weeks

These may have been added to your record if you were ill/disabled, unemployed, caring for someone full-time or on jury service.

1975-76 Full year
You have contributions from

Paid employment: £65.06

National Insurance credits: 50 weeks

These may have been added to your record if you were ill/disabled, unemployed, caring for someone full-time or on jury service.

xylophone

When was this 2 years? If it was before 1988, then she may have needed 5 years service to be entitled to actual pension rights. If after 1988, then she may have needed a minimum of 2 years - 'almost 2 years' won't do it.

The OP's wife has a COPE on her state pension statement.

https://www.gov.uk/government/publications/state-pension-fact-sheets/contracting-out-and-why-we-may-have-included-a-contracted-out-pension-equivalent-cope-amount-when-you-used-the-online-service


The pension you get from your workplace or personal pension scheme for the periods you were contracted out, should include an amount that, in most cases, will be the equivalent of the additional State Pension you would have got if you had not been contracted out. This is your Contracted Out Pension Equivalent (COPE) amount.

An estimate of your COPE will be shown if you use the online Check your State Pension service or if you request a State Pension Statement through the post. The COPE amount is based on your National Insurance contribution record up to 5 April 2016 used to calculate your Starting Amount for the new State Pension. The COPE estimate shown in your statement is based on April 2016 State Pension rates.

If you were a member of 2 or more contracted out schemes, the COPE amount shown is based on all your schemes and covers all the years you were contracted out.

We will not know the exact amount your scheme will pay you as a result of contracting-out as it will depend on the actual rules of your private scheme, and possibly any investment choices you may make.

If you are unsure when you will be paid your workplace or personal pension, please contact your scheme to find out. If you are unsure of their contact details, you can use the Pension Tracing Service.

Silvertabby

Things have taken a bit of a sinister turn. It appears in 1992 - 1994 she worked for an employer who saw fit to deduct tax and NI from their wages, but not actually pay this money to the government. This resulted in an inspectorate from the tax office turning up at the door and placing the company into liquidation to obtain missing funds. Not sure what the result was.
Could this be the resultant hole in the funds? I'll still pursue the contracted out part.

If the employer didn't pay anything to the government, then her HMRC records wouldn't show that she had been contracted out.

Is it possible that her contracted out period relates to another employer? HMRC should be able to tell her the dates and give her a rough idea of which pension scheme holds her GMP liability.

ADD: Unless your partner was on a very high salary at the time, £18 COPE sounds too high for just 2 years. Are you sure that she didn't have another contracted out job, and didn't realise that she had been entered into the pension scheme? Anything in the public sector, for example?

xylophone - as far as the LGPS goes, if anyone left with less than pensionable service then their benefits would be 'frozen' rather then deferred. As far as HMRC were concerned, they were still contracted out for this period. If the pension fund member returned to the LGPS fold or transferred their benefits to another pension fund, then no action was needed. However, if the member opted to take a refund of their contributions then the CEP amount would be paid to HMRC thereby putting the ex-member back into SERPS/SP2 for that period.

DailyDaz

Thanks to all that replied to this thread. You certainly explained things more clearer the HMRC's pension adviser did to the wife on the phone. She's looking into the contracted out part. HMRC want £733 a year for the next six years from her. Seeing as she's not working, we'll take the hit on that.

xylophone

HMRC want £733 a year for the next six years from her. Seeing as she's not working, we'll take the hit on that.

https://www.gov.uk/voluntary-national-insurance-contributions/deadlines

You can usually pay voluntary contributions for the past 6 years. The deadline is 5 April each year.

She may want to save the money at the best interest rate she can get and pay in a lump sum nearer the time?

Do let us know what she finds out about the private pension.

hyubh

Silvertabby wrote: »

as far as the LGPS goes, if anyone left with less than pensionable service then their benefits would be 'frozen' rather then deferred. As far as HMRC were concerned, they were still contracted out for this period. If the pension fund member returned to the LGPS fold or transferred their benefits to another pension fund, then no action was needed. However, if the member opted to take a refund of their contributions then the CEP amount would be paid to HMRC thereby putting the ex-member back into SERPS/SP2 for that period.

Hmm, you are misremembering slightly... if a refund went unclaimed, then I would expect the case to get processed as a frozen refund (status 9 if you were an AXISe'r - other systems use different terminology), at which point a CEP would have been paid. On the member rejoining, the administrator would then reclaim the CEP from HMRC as part of the auto-aggregation process.

Put another way, if an LGPS administrator is currently doing a GMP reconciliation and a frozen refund case appears in the data from HMRC, then someone down the line has made an error, as HMRC should not be showing the period as contracted-out.

DailyDaz - my first thought on reading your 'two years' line was that HMRC have no record of a CEP having been paid, even when it should have been. On the other hand, I agree with Silvertabby that £18 p/w is a non-trivial amount for two years, in fact it seems high to me even if it relates to a pre-88 period when schemes could (and usually did) wait 5 years before granting early leavers a preserved benefit. Your wife definitely needs to track this down.

kidmugsy

DailyDaz wrote: »

HMRC want £733 a year for the next six years from her. Seeing as she's not working, we'll take the hit on that.

Why? Get her to contribute £2880 (net) to a pension - say a SIPP at Hargreaves Lansdown - and in due course, once HMRC has paid the provider the £720 tax rebate, withdraw the £3600. Profit = £720, thus defraying her costs.

If I were you I'd bung £2,880 into HL before this tax year ends, and draw nothing out, because it'll take some weeks for the HMRC cash to arrive. And then another £2,880 after April 6th. To keep charges down be sure to leave behind £1,000 when she firsts draws down income. Check the provider's list of charges to make sure that my knowledge about them is not out of date.