Percentage effect reduction over 25 years.

DairyQueen

The lack of indexation was one of the factors that supported a positive recommendation for me to transfer-out of my DB.

The excess (i.e. the amount above GMP) was subject to discretionary increases, and such increases had been suspended some years prior to my transfer. My deferred benefits statement clearly stated that the excess would be increased in line with RPI up to a max of 5%. However, the scheme rules had since been changed, and without notifying deferred members.

The GMP element was accrued between 1988 and 1997 so that, at least, would have been index-linked up to 3%. However, since 2016, deferred members of private sector DB schemes who have accrued pre-1988 GMP will receive zero indexation on this element of their company pension. Special arrangements apply to the public sector

The government can be 'thanked' for welching on its commitment to plug the indexation gap on GMP. Until 2016 this formed part of its commitment under the terms of the state second pension (S2P/SERPs). They ditched the indexation baby with the contracting-out bath water. Many people remain unaware that the GMP chunk of their DB will receive zero/restricted indexation once in payment.

DBdoobydoo

AlanP wrote: »

Another ex-DEC employee here that will be in the same boat once (if) I start drawing the pension.

Hi! I worked at DEC Park Reading & in Basingstoke - Snamprogetti House then The Crescent & finally Skippetts House.

AlanP wrote: »

Current thinking is i will take the CETV as a lump sum.

I started drawing my pension age 58 in 2012 & didn't appreciate at the time that the pension was not index-linked except for a tiny portion that was GMP. I would have been much better off to take the CETV as a lump sum & invest it although I'm not even sure that it was an option at that time. If I were taking the pension today & knowing what I know I would definitely opt for a transfer out. Sadly it seems that it's not possible to transfer out once the pension is in payment or I would do that.

I think that a DB pension with little or no index-linking should come with a health warning. If I had been properly informed I would have transferred out before I started to draw the pension & not been saddled with an ever dwindling pension.

The way that DEC pensioners with pre-1997 pensions have been shafted by HP was the subject of a debate in the House of Commons a couple of years ago http://!!!!!!/2Qs6fw4 One statistic that came out was that 90% of pre-1997 DB schemes do have index-linked increases whether as required in the scheme rules or discretionary. It's only a few despicable companies like HP that don't treat their pensioners fairly. Rather predictably these are mostly large US companies like 3M, Chevron & Unisys. Post-1997 DB pensions are required by law to be index-linked.

AlanP_2

DBdoobydoo wrote: »

The way that DEC pensioners with pre-1997 pensions have been shafted by HP was the subject of a debate in the House of Commons a couple of years ago http://!!!!!!/2Qs6fw4 One statistic that came out was that 90% of pre-1997 DB schemes do have index-linked increases whether as required in the scheme rules or discretionary. It's only a few despicable companies like HP that don't treat their pensioners fairly. Rather predictably these are mostly large US companies like 3M, Chevron & Unisys. Post-1997 DB pensions are required by law to be index-linked.

It's even been to the Pensions Ombudsman - https://www.pensions-ombudsman.org.uk/wp-content/uploads/PO-4065.pdf who found in favour of HP.