GMP and COPE

Snot

I have a deferred DB pension (all post 1988 service), should the GMP value be the same as the COPE ? Using the latest statements from both the present COPE is ~ 5 times the GMP.

I’ve tried asking the scheme admins, but no response.

Many thanks.

Dox

If the scheme uses something called 'fixed rate revaluation' for your GMP, then it will be higher than the COPE amount.

Ring (ensures you get a response) the administrators and ask them how the GMP is revalued.

xylophone

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

Do you have a scheme booklet? It may specify how the pension (GMP/excess) revalues in deferment.

Otherwise you will need to get the information from the administrator.


See page 5 for example of FR revaluation and COPE
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf

Snot

So the scheme booklet says Section 148 revaluations which are assumed to be 3.5%. But if I take the GMP figure and increase by 3.5% pa until aged 65, it leaves the GMP ~ half of the COPE number.

Getting more confused the more I think about it.

Dox

When did you leave active membership of the scheme?

Snot

May 2017, the DB statemement is dated 31st may 17. The COPE has been the same throughout as expected.

xylophone

Do you have any other contracted out pensions in addition to the deferred pension?

Read in full link in my post above.

Tom99

[FONT=Verdana, sans-serif]I thought GMP only related to pre 1997 employment whereas COPE would be up to 2016?[/FONT]

Snot

Xylophone, no other contracted out schemes. I’ve read both links, but sorry I’m clearly missing your point.

xylophone

I've read both links,

You will note that the second link refers to all periods of contracted out service - the question was just a check on this.

In your post 6 you mention leaving the scheme several years after 1997 when the GMP system ended.

The link explains the deduction for GMP (pre 97) and how contracting out in DB schemes post 1997 is treated.


Section A: How contracted-out amounts are treated in the new State
Pension
5. In determining a person's new State Pension their National Insurance
record will be calculated under the old and new scheme rules when the new State Pension starts in April 2016. The higher amount becomes a person's Starting Amount.

6. Both these calculations will take into account periods when people
were contracted-out of the additional State Pension (State Earnings-Related Pension Scheme or SERPS between 1978 and 2001/02 and State Second Pension or S2P from 2002/03). This reflects the fact that when people were contracted-out they either paid National Insurance contributions at a lower rate, or some of the National Insurance contributions they paid were used to contribute to a private pension instead of their additional State Pension. In other words they did not pay the State for SERPS or S2P while they were contracted-out.

7. To ensure these periods are reflected fairly, different methods are used
to record contracting-out in the two calculations. This section is intended to explain why.


To reflect all periods of contracting out
a Rebate Derived Amount is introduced into the new State Pension
calculation and comprises the following:
1. Contracted-out Deduction from 1978-1996/97;
2. A new notional deduction in respect of being contracted-out between
1997/98 and 2001/02 - this amount will be the amount of SERPS the
person would have had if they had been contracted-in;
3. The deduction made from gross S2P in respect of being contracted-out
from 2002/03 to 2015/16.

For "Rebate Derived Amount" read COPE. For " Contracted out Deduction" read GMP.

You can ring the DWP to check.

xylophone

I thought GMP only related to pre 1997 employment whereas COPE would be up to 2016?

Yes - see second link in post 3 above.