GMP and deferred pension

MikeFloutier

I don't seem to be making this very clear.

1. Barclays agreed to provide my 2/3rd FS pension when I joined.

2. They then opted me out of SERPS, taking away my additional state pension. The deal was, as is generally known, that they were given a 3.4% NIC rebate and in return would provide a GMP.

Surely it can't be correct to expect me to give up my SERPS and get nothing in return. Apart from the 1.4% NIC rebate.

More importantly, surely it can't be correct that Barclays should simply be given the 3.4% from the public purse and not give a defined return to somebody. Surely that defined return is my GMP.

enthusiasticsaver

xylophone wrote: »

You are female?

Then your GMP age (60) aligns with Scheme Pension Age, also 60.

You are sure that your pension consists solely of pre 88 GMP?

The scheme has no obligation to pay any increase on pre 88 GMP in payment.



Have you obtained a new state pension statement?

Yes I am female and have been told my GMP Payment date is my 60th birthday. My scheme booklet confirms that and says the GMP portion of my pension is revalued at 8.5% for each complete tax year between the date I left the scheme (December 1985) and my GMP payment date which is early 2020. I have confirmation that my pension is made up solely of GMP and is receiving deferred increases of 8.5% per year. Once in payment it is not subject to increases.

Towers Watson have told me to write to administrators 6 months before my 60th birthday when they will provide me with a quote.

I received a state pension statement earlier on this year by using the HM gateway. It shows my forecast as being £164.35 per week however I retired at the end of last year so based on my NI record up until April it currently stands at £150.09. If I contribute a further 4 years contributions before April 2025 I will get the maximum £164.35. My COPE is £31.22 as my current pension scheme is also contracted out.

hyubh

MikeFloutier wrote: »

I don't seem to be making this very clear.

Indeed, you aren't - I honestly don't understand how this thread keeps going round in circles.

1. Barclays agreed to provide my 2/3rd FS pension when I joined.

1/60 final salary.

2. They then opted me out of SERPS

Contracted out, not opted out.

taking away my additional state pension

It's paid as part of your occupational pension as a GMP, not 'taken away'.

Surely it can't be correct to expect me to give up my SERPS and get nothing in return.

What 'nothing'? You are due your revalued GMP at GMP age, together with any applicable excess. Without knowing much about your particular circumstances, I'm pretty confident things have turned out to be a rather better 'deal' than if you had contracted-in.

More importantly, surely it can't be correct that Barclays should simply be given the 3.4% from the public purse and not give a defined return to somebody. Surely that defined return is my GMP.

How are you not getting the GMP due...? Imagine you have a doppelgänger who was, however, always contracted-in. He hasn't benefitted from fixed rate revaluation (i.e. your revalued GMP is much larger than the equivalent revalued SERPS), and anti-franking legislation has meant that Barclays haven't been able to claw back any of that advantage. Also, the doppelgänger couldn't draw their state-only pension early, whereas (it seems) you could, with Barclays then treating the whole pension as excess. If they hadn't had done that and instead had reflected your belief in GMP and excess being 'independent entities', then the statutory minimum GMP in payment before age 65 would have been nil, ultimately for the simple reason that there is no concept of an early SERPS pension in payment.

MikeFloutier

Do you blame me for trying to make sense of this:

1. On the one hand it is made incredibly complicated, and

2. On the other Barclays/WTW are consistently trying to avoid their contractual obligations.

I accept all you say and I'm so glad this forum is here to help us all in our understanding of a subject so complex that the industry itself admits it's own difficulties in understanding it.

However, I believe, at present, that I have a point.

Pension law and Barclays 1964 scheme rules provide for a generous pension, something that was always part of the employment package.

Clearly as the industry became more competitive they began to look for ways to reduce costs - e.g. My voluntary redundancy.

At every turn they are trying to avoid their contractual obligations. Pension law had to be changed to rein this in - Anti-franking.

Even after this they still keep on trying to squeeze the best "deal" out of every single isolated pensioner - just like an old fashioned double glazing salesman.

By the way, I just noticed, by going back to the year dot in my pension file, that, although Franking has not (after a long fight) been applied to my GMP increases (in deferment), it WAS applied to the base GMP figure, thus reducing my "1/60" FS pension by that same base GMP figure. (This is NOT the partial-franking that we've previously discussed btw)

You may feel that the Scheme plus GMP is too generous. You may be right. But I reserve the right to see exactly where this is stated in the Scheme Rules or Pension Law.

MikeFloutier

hyubh wrote: »

anti-franking legislation has meant that Barclays haven't been able to claw back any of that advantage.

There may be one or two who might take issue with that...

DT2001

How do you get part of a previous post in the highlighted box?

xylophone

You may feel that the Scheme plus GMP i

But it is not Scheme plus GMP - the GMP is part of the Scheme Pension - indeed it may be the whole of the Scheme pension.

See post 63 above.

xylophone

See

https://www.plsa.co.uk/Policy-and-Research-Defined-Benefit-GMPs



Where an employer “contracted out” of the State Earning Related Pension Scheme (SERPS, later, the state second pension), it agreed to provide certain minimum benefits under its own scheme,

From the Shell fact sheet

As a contracted-out scheme, the SCPF had to ensure that member’s pensions were at least equal to the amount that you would otherwise have received if you had not been contracted-out.
WHEN IS MY GMP PAYABLE?
Your GMP forms part of your SCPF pension

From NHS

https://www.nhsbsa.nhs.uk/pensioner-hub/guaranteed-minimum-pension-gmp

Your GMP forms part of your pension from the date you become eligible to receive your state retirement pension.

Your GMP amount
Your GMP amount is broadly equivalent to what you would have received if you had been in the State Earnings Related Pension Scheme for that period of service.

Your pension will:

usually be larger than the guaranteed minimum
include your GMP amount, it is not an extra amount to be paid
be increased up to the GMP amount if it is smaller than the GMP amount

DT2001

Enthusiasticsaver - You have drawndown your pension?
Do you have the figure for your GMP portion as I did the calculation to my GMP age and got it checked by TPAS.
WTW will not commit because legislation may change or the Trust Rules could be altered. Not sure how likely but that is the reason given.
As you say once in payment no increases but at SPA I think you’ll not have a deduction as the Trust Rules state that the GMP figure will be the minimum paid. Mike F sent me the rules and variations up to 1995 and I cannot see any variation to that commitment. Additionally the GMP figure will have been agreed by HMRC reconciliation (?) so cannot hopefully be altered.

xylophone

Enthusiasticsaver - You have drawndown your pension?

No - the pension (which consists solely of GMP) is still in deferment. See post 63.

In these circumstances, if Enthusiastic saver has her statement of deferred benefits at leaving, presumably she can estimate the pension at age 60 as it is revaluing at fixed rate of 8.5%.