What to do with pension fund with GMP

parcival

I would like opinions please:

I am 61 and have a deferred money purchase pension from an employer that I worked for in the mid 1980's and 1990's. I am male and my NRD will be at age 65.

The fund is now held with Aviva and is worth 180k.

The administrators (Mercer) say that the pension has a GMP of £4700 at age 65 (all post 88 GMP). Mercer have also indicated that as a rough guide they will need a fund of about 30 times the GMP in order to support the GMP (I know that they have to pay the GMP regardless of the fund size).

At todays value that would need a fund of 141k to support the GMP leaving an excess of about 40k to buy additional benefits.

Once in payment the pension will be revalued each year and provides a 50% spouses pension if I croak.

Any opinions on whether to leave this as is....... or to transfer to a SIPP and drawdown as required. Seems to me that if I went for drawdown and took out say £6k a year (and increase that a bit every year for inflation) then the pot would outlast me and give me more flexibility?

Many thanks

xylophone

Was this a DC pension with DB underpin?

It seems that you have safeguarded benefits so see

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

xylophone

Have you and Mrs P obtained state pension forecasts?

https://www.gov.uk/check-state-pension

parcival

I can see no mention of an underpin in any of the scheme literature or any of the statements / letters that I have.


I also have a Deferred defined benefit pension with the same employer. This was closed after a few years and we joined what was called the Money Purchase plan.


This final slary pension has a GMP and benefits in excess of GMP.

parcival

Yes, we both have an up to date forecast. Both about £150 pw each as we retired early.


We both had 30 years under the old system but are a bit short under the new system.

xylophone

I can see no mention of an underpin in any of the scheme literature or any of the statements / letters that I have.

You mentioned that the pension is money purchase but has a GMP- if so, this will be a pension with safeguarded benefits.


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

Some defined contribution (DC) schemes also provided a GMP as an alternative to protected rights.

Yes, we both have an up to date forecast. Both about £150 pw each as we retired early.

Had you considered voluntary contributions?

https://www.royallondon.com/siteassets/site-docs/media-centre/good-with-your-money-guides/topping-up-your-state-pension-guide.pdf