SERPS and Company Defined Pension

Holls_dad

I opted out of SERPS and payment went into my company defined pension scheme ,however when it closed a couple of years ago my year pension quoted was what I thought it would be working it out without my increased payments going in from opting out of SERPS 

Should my yearly pension have increased because of my additional SERPS opt out payments ? and should I question this with the provider?

Silvertabby

It's contracted out (of SERPS) not opted out.  Huge difference.

If your company pension is/was a DB scheme, contracting out of SERPS would have been automatic.  As with all DB schemes, your eventual pension is calculated on your salary and service, not on how much you/ your employer/the NI rebate paid in.

So, yes, your pension has benefitted by your NI rebate (either the accrual rate would be less or your and your employer's contributions would be more without this) but you won't see the figures listed separately.

dunstonh

I am going to assume you are referring to a defined contribution pension and not a defined benefit pension (the latter doesn't fit with your wording used)

Statement projections have been declining every few years for the last decade.  It is not a reliable way to measure something like this as the assumptions used have moved from being over-optimistic to over pessimistic.   Plus, contracting out was abolished in 2012.  So, you haven't been receiving any rebates for almost a decade.   The projected income is synthetic.  A fund of £100k would project an income less than a fund of £50k 10 years ago.

Look at your old statements and see if there is any reference to protected rights and non-protected rights.  Contracted out rebates went into the protected rights segment of your fund.  employer and personal contributions went into the non-protected rights segment of your fund.   More recent statements may refer to former protected rights.  When contracting out was abolished, protected rights were reclassified as non-protected rights.   Very old plans with old software would often leave them referred to as protected rights or former protected rights.    More modern plans/software reclassified them as non-protected rights and ceased to show them separately.

maggy50

When would the the protected rights been abolished ?
My husband has a statement dated 1995 from Norwich Union regarding his Policy he transferred from Rolls Royce Pension Fund
Now Aviva who I must say have not been the clearest or fair in dealings with ..

Marcon

maggy50 said:

When would the the protected rights been abolished ?
My husband has a statement dated 1995 from Norwich Union regarding his Policy he transferred from Rolls Royce Pension Fund
Now Aviva who I must say have not been the clearest or fair in dealings with ..

6 April 2012, on which date protected rights just became 'ordinary' pension.

garmeg

Marcon said:

maggy50 said:

When would the the protected rights been abolished ?
My husband has a statement dated 1995 from Norwich Union regarding his Policy he transferred from Rolls Royce Pension Fund
Now Aviva who I must say have not been the clearest or fair in dealings with ..

6 April 2012, on which date protected rights just became 'ordinary' pension.

Is it possible, as it came from Rolls Royce, that this is a Section 32 policy with a GMP to complicate matters?

dunstonh

Just a note to warn that the thread could be going off topic for the OP and may cause confusion.     The OP appears to have a DC occupational pension whereas maggy's husband has a DB occupational pension.  Contracting out with DB and DC was different.      So, protected rights would have different issues on a DB scheme compared to DC.   

maggy50

Thank you for this but what issues would be different under a DB scheme as apposed to a DC ?

dunstonh

maggy50 said:

Thank you for this but what issues would be different under a DB scheme as apposed to a DC ?

GMP would be one of the key differences.  There may be no GMP on a DC pension that was contracted out.  Just a protected rights fund (or former protected rights as it would be now)