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frozen pension advise please

24 replies 3.2K views
2

Replies

  • steveh6874steveh6874 Forumite
    16 posts
    Seventh Anniversary 10 Posts
    hi everybody ive received some more imformation about my plan

    the GMP at date of leaving plan was £59.28 and post 88 was £105.04 and the revauation is fixed at 7.5%
    the GMP at state pension age would be pre 88 £861.12 and post 88 £1,525.68 totalling £2,386.80
    the NRA for the scheme is 65 however the member pension age is 62 allowing members to take scheme benefits from this point unreduced , if the pension is lower than the GMP the pension will increase to the GMP payable from 65th birthday , for benefits to be taken prior to age 62 the scheme pension payable must be higher than the GMP payable

    the spouses pension is payable in retirement as 50% of full pension in deferment a widows GMP is payable with excess payable as a discretionary lump sum , this does not have an affect on the member pension

    we are unable to project pension benefits more than 6 months in advance so are unable to provide a quotation for your 62nd birthday



    by the way i am 54 and i am forecast to receive the full state pension

    i am now very confused

    thank you
  • xylophonexylophone Forumite
    34K posts
    Part of the Furniture 10,000 Posts Name Dropper
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    As far as I (no expert) can see, the pension payable at age 65(?) is the higher of the DC pension or the GMP.

    The administrator refers to State Pension Age but GMP age is 65 which is no longer SPA for you. You might like to clarify this with the administrator.


    The scheme must pay you at least £2386.60 per annum from GMP age.

    The scheme must escalate the post 88 GMP in payment post age 65 by up to 3% CPI (or just possibly RPI depending on scheme rules). You might wish to clarify with the administrator.

    There is provision for your widow (if you leave one).

    To be permitted to take benefits before age 62 your scheme pension to date would need to be higher than the value of the GMP. The pension would be actuarially reduced for early payment.

    If you take your pension at age 62, if the value of the Scheme Pension at that point is not as high as the GMP then you would receive an increase at GMP age.

    Presumably there is provision to index link the pension in payment between Scheme Pension Age and age 65 (or possibly State Pension Age- check with administrator) - it is likely that any such increases would be set against the value of the GMP when it comes into payment. You can check this with the administrator.


    It really comes down to whether you wish to keep the guarantee of a pension partially index linked for your/ spouse's lifetime or transfer out into a personal pension or your current workplace pension.

    Be aware that despite the £30,000 rule to which reference is made above, there are pension schemes which will refuse to accept a transfer of safeguarded benefits without advice no matter the value.
  • xylophonexylophone Forumite
    34K posts
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    PS Although this pension has the DB underpin, it may be that a Pension Wise appointment (or even a discussion with an Adviser at TPAS could assist?

    You could check.

    https://www.pensionwise.gov.uk/en
  • steveh6874steveh6874 Forumite
    16 posts
    Seventh Anniversary 10 Posts
    thank you xylophone very helpful and very much appreciated thank you again
  • steveh6874steveh6874 Forumite
    16 posts
    Seventh Anniversary 10 Posts
    thank you luckyfool151 much appreciated i have made futher enquires with the scheme admin and waiting for the details

    basically i need need to know is is that figure i received of £2386.60 the least pension i can expect to receive per annum at age 65 and how many years in retirement is it paid out is it lifetime or for a certain amount of years

    thanks again
  • woolly_wombatwoolly_wombat Forumite
    710 posts
    Part of the Furniture 500 Posts
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    Brynsam wrote: »
    £23,500 is lower than £30,000 so advice not needed.

    £23,500 looks like dreadful value considering the stated benefits due at age 65.
  • edited 13 October 2018 at 12:32AM
    luckyfool151luckyfool151 Forumite
    21 posts
    edited 13 October 2018 at 12:32AM
    steveh6874 wrote: »
    thank you luckyfool151 much appreciated i have made futher enquires with the scheme admin and waiting for the details

    basically i need need to know is is that figure i received of £2386.60 the least pension i can expect to receive per annum at age 65 and how many years in retirement is it paid out is it lifetime or for a certain amount of years

    thanks again


    They have to pay you this figure at 65 and it would be the least figure.

    Again I think it depends on the provider. We provide a 5 year guarantee as standard on GMP but I think this could exceed the statutory requirement (not sure on this). This means that if you die within the first 5 years we guarantee to make this payment to your estate until the end of the 5 year period and then your spouse pension worth 50% of the figures you have quoted at SPA would kick in - her pension would then continue until death. Alternatively, your provider could give overlap which means if you die within the 5 YG payments continue to be made to your estate until the end of that period but your spouse payments would be made concurrently during this period until the death of your spouse. Based on current life expectancy the difference between no guarantee period and 10 years etc means there isn't a huge difference in the annuity rate applied so doesn't matter hugely. Outside of the guarantee period, payment obviously continues until your death and then the spouse pension starts.


    If you live for 30 years then you are absolutely quids in especially if you have escalation provided on the post-88 GMP. I understand that the state will also pay the pre-88 escalation as well (not the provider). It really is a good benefit if you consider the revaluation rates and escalation that has to be provided.

    But there are no poor Pension providers though:rotfl:
  • steveh6874steveh6874 Forumite
    16 posts
    Seventh Anniversary 10 Posts
    Hi luckyfool151

    I really appreciate you taking the time and trouble to give me this interesting imformation which i am studying

    i am still waiting for more information from the provider but they have provided this current transfer value



    the document shows the current tranfer value £23,525.87 is higher than the GMP payable £20,622.34 for transfer

    thank you again
  • steveh6874steveh6874 Forumite
    16 posts
    Seventh Anniversary 10 Posts
    Hi

    yes they said i could transfer for no fee and said the transfer value is £23,622.34 valid fpr 3 months

    i am totally confused again , i have posted all the information they have sent me it is all very vague though they have not really been very helpful at all and they dont seem interested really in helping me

    thank you
  • xylophonexylophone Forumite
    34K posts
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    I had not got the impression that this was a S32 Policy.

    I had thought that you were a deferred member of a Money Purchase Scheme with GMP underpin?



    Can you clarify - what is the MPT Plan?

    Do you have a Pension Scheme Booklet?
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