SP forecast question re COPE

handful

I have checked my SP entitlement and am now a bit confused. My forecast states that my forecast is £179.60 a week and that I can't improve my forecast. My record shows that I have 42 years of full contributions and that I have 9 years left to contribute and no gaps in my record. This is all fine and seemingly straightforward. However, I was contracted out for a period, I can't remember how long for now but it was for quite a few years.

When I select that part of my pension forecast it tells me the following.

Contracted Out Pension Equivalent (COPE)

Your COPE estimate is£56.25 a week.

This will not affect your State Pension forecast. The COPE amount is paid as part of your other pension schemes, not by the government.

In most cases the private pension scheme you were contracted out to:

• will include an amount equal to the COPE amount
• may not individually identify the COPE amount

The total amount of pension paid by your workplace or personal pension schemes will depend on the scheme and on any investment choices.

So, does this mean that my SP will be short by this amount and that one of my pension pots includes a sum equivalent to the amount that will pay me £56.25? I contracted out originally when i was in a DC pension but subsequently did have 5.5 years in a DB scheme. How do I find out my contracted out details?

Thanks in advance if anyone can help explain this to me!

[Deleted User]

"this will not affect your state pension forecast" regards

Dazed_and_C0nfused

You yourself have just posted this statement.

This will not affect your State Pension forecast. The COPE amount is paid as part of your other pension schemes, not by the government.

Have you obtained a forecast for your DB pension?

handful

thetimewill said:

"this will not affect your state pension forecast" regards

Thanks but what does is mean? Where is/ how will my COPE be paid or is that now no longer relevant now I'm contracted back in?

handful

Dazed_and_C0nfused said:

You yourself have just posted this statement.

This will not affect your State Pension forecast. The COPE amount is paid as part of your other pension schemes, not by the government.

Have you obtained a forecast for your DB pension?

Not specifically no. I get an estimate every now and then, last one I had said it was worth around £85k if I wanted to cash it in and it will pay around £4k a year but there is no mention of any contracted out sums from memory. I will double check though!

[Deleted User]

handful said:

thetimewill said:

"this will not affect your state pension forecast" regards

Thanks but what does is mean? Where is/ how will my COPE be paid or is that now no longer relevant now I'm contracted back in?

Your state pension is NOT reduced by cope amount. The cope figures/ estimate is included in your company pension ( although not displayed). Your state pension forecast explains fully. Regards

handful

thetimewill said:

handful said:

thetimewill said:

"this will not affect your state pension forecast" regards

Thanks but what does is mean? Where is/ how will my COPE be paid or is that now no longer relevant now I'm contracted back in?

Your state pension is NOT reduced by cope amount. The cope figures/ estimate is included in your company pension ( although not displayed). Your state pension forecast explains fully. Regards

Thank you. I just checked my last forecast and it only refers to the rate of increase being different for any pension that was as a result of contracting out but doesn't specify how much that is. I will get a fresh forecast and maybe ask them to be a bit more specific. Thanks for the help.

xylophone

My record shows that I have 42 years of full contributions and that I have 9 years left to contribute and no gaps in my record. This is all fine and seemingly straightforward. However, I was contracted out for a period, I can't remember how long for now but it was for quite a few years.

See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/210299/single-tier-valuation-contracting-out.pdf but bear in mind that the figures need adjusting.

At 6/4/16 you had at least 35 years NI.

Two calculations were done. The COD/COPE was used for the one and only time in these calculations.

Old Rules

Full Basic SP (because you had at least 30 years) + (Additional State Pension - Deduction for Contracting Out).

£119.30 + (Additional State Pension - Deduction for Contracting Out)

New Rules

Full NSP (because you had at least 35 years) - Contracted Out Pension Equivalent.

£155.65 - £56.25.

Your starting amount (almost certainly the old rules amount) was the higher of the two.

It is possible (as you are likely to have at least some Additional State Pension) that you had reached  full NSP under the old rules - if not, you have reached it by contributions since 6/4/16.

This means that although you will continue to pay NI while you are employed and earning the relevant amount, you will not be adding to your SP.

It will simply revalue between now  and taking your SP (and then escalate after you draw your SP) under (as far as we know) the "Triple Lock".

https://commonslibrary.parliament.uk/research-briefings/cbp-7812/

Turning to your  occupational pension, when exactly did you work for this employer?

handful

xylophone said:

My record shows that I have 42 years of full contributions and that I have 9 years left to contribute and no gaps in my record. This is all fine and seemingly straightforward. However, I was contracted out for a period, I can't remember how long for now but it was for quite a few years.

See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/210299/single-tier-valuation-contracting-out.pdf but bear in mind that the figures need adjusting.

At 6/4/16 you had at least 35 years NI.

Two calculations were done. The COD/COPE was used for the one and only time in these calculations.

Old Rules

Full Basic SP (because you had at least 30 years) + (Additional State Pension - Deduction for Contracting Out).

£119.30 + (Additional State Pension - Deduction for Contracting Out)

New Rules

Full NSP (because you had at least 35 years) - Contracted Out Pension Equivalent.

£155.65 - £56.25.

Your starting amount (almost certainly the old rules amount) was the higher of the two.

It is possible (as you are likely to have at least some Additional State Pension) that you had reached  full NSP under the old rules - if not, you have reached it by contributions since 6/4/16.

This means that although you will continue to pay NI while you are employed and earning the relevant amount, you will not be adding to your SP.

It will simply revalue between now  and taking your SP (and then escalate after you draw your SP) under (as far as we know) the "Triple Lock".

https://commonslibrary.parliament.uk/research-briefings/cbp-7812/

Turning to your  occupational pension, when exactly did you work for this employer?

Thanks for the reply. I worked between 1999 and 2005 for the company with the DB scheme. I was contracted out before that though. It's all a bit of a haze now though to be honest with regard to dates. I think I contracted out about 5 or so years before I worked there.

xylophone

I worked between 1999 and 2005 for the company with the DB scheme. I was contracted out before that though. It's all a bit of a haze now though to be honest with regard to dates. I think I contracted out about 5 or so years before I worked there.

Then you will not have a GMP (see link in my previous) in respect of this pension but will nevertheless have had a deduction included in your calculations for NSP (see link).

However if

I just checked my last forecast and it only refers to the rate of increase being different for any pension that was as a result of contracting out but doesn't specify how much that is. 

relates to a pension statement from the company with the DB pension, this is somewhat of a puzzle unless it is  automatically included in all such statements to cover those who were members of the scheme between 1978 and 1997.

You mention that you were contracted out (into some form of pension policy with an insurer perhaps) prior to being in the DB scheme?

This will also have been taken in account in  the calculations for NSP - see link which explains.

handful

xylophone said:

You mention that you were contracted out (into some form of pension policy with an insurer perhaps) prior to being in the DB scheme?

This will also have been taken in account in  the calculations for NSP - see link which explains.

I believe I was. I think it was probably in the early 90s for a few years. I changed jobs in 1995 though and can't remember what happened at that point and whether I contracted back in before moving to the company with the DB scheme in 1999. The pensions have since been transferred into different schemes so I don't haven't got the relevant documents to check now! Thanks for posting the interesting links although I'm still a bit confused by all of this to be honest!