HSBC Deferred pension calculation

Narrowboat

I have a DB with HSBC, which has been deferred since 1998 when I left. When I logon on to my pension account it gives a value on leaving in 98 and one more value (£3k per year) on 1/1/2004. I don't know what the significance of 1/1/2004 is, but my main aim is to try and calculate what its worth now.
The scheme rules say  - Your deferred pension will be based on your pensionable service and final pensionable salary at the date you leave. To go part of the way towards protecting your pension against the impact of inflation, it will then be re-valued for the period before it starts to be paid.
So they don't even promise to keep pace with CPI, it sounds like they can do what they want and this will only partly cover inflation. Are there any HSBC deferred members who have recently retired and can tell me how generous/ungenerous HSBC were?
thanks 

xylophone

Are you male or female?

Were you a Midland Bank employee with NRA of 60?

https://futurefocus.staff.hsbc.co.uk/-/media/project/futurefocus/information-centre/deferred-db/guides/midland-member-guide.pdf



When did you join the Pension Scheme?

Were you given a statement of deferred benefits when you left the Scheme showing pre 88 GMP/post 88 GMP/excess?

The GMP portion of your pension revalues differently from the excess.

https://www.barnett-waddingham.co.uk/comment-insight/blog/revaluation-for-early-leavers/

It is likely but not certain (check with administrators), that the GMP revalues at Fixed Rate  while the  excess revalues under Scheme Rules (which may be as set out in the above but you should check with the administrator).

You should also note that HSBC is one of the few schemes that still applies a state pension reduction - this is covered in the Scheme Guide above.

https://www.theguardian.com/money/2020/aug/30/pressure-mounts-on-hsbc-to-axe-discriminatory-staff-pension-cuts

Narrowboat

Thanks xylophone. Yes I was a Midland bank employee with NRA of 60 (male) - joined in 1989. Page 21 of the member guide you posted is exactly where I took the quote "part of the way towards protecting your pension against the impact of inflation" from.

I probably was given a statement at the time, but being in my 20s I naively didn't pay much attention to it. And yes I am aware of HSBC's pension clawback - it's their approach in using this little trick which makes me nervous about how they handle deferred pension increases.

hyubh

Narrowboat said:

Thanks xylophone. Yes I was a Midland bank employee with NRA of 60 (male) - joined in 1989. Page 21 of the member guide you posted is exactly where I took the quote "part of the way towards protecting your pension against the impact of inflation" from.

I probably was given a statement at the time, but being in my 20s I naively didn't pay much attention to it. And yes I am aware of HSBC's pension clawback - it's their approach in using this little trick which makes me nervous about how they handle deferred pension increases.

They will handle them according to scheme rules. Your pension will be split between excess and GMP; I think the Midland section uses S148 revaluation for the latter, which is basically general wage inflation. Statutory excess revaluation for a 1998 leaver is inflation capped to 5% across the whole period; some HSBC sections at least have scheme-specific revaluation however, statutory being an underpin. I'd check with the administrator for what exactly your applicable revaluation basis is.

PS - the scheme was non-contributory when you were a member. So I wouldn't necessarily think you have been too hard done by overall

xylophone

some HSBC sections at least have scheme-specific revaluation however, statutory being an underpin. 

Having read  hyubh's comment, I did a little more research and came up with PDF below - it simply refers to the HSBC Scheme and Trustee rather than any particular DB section but may be relevant to your situation - worth a read before you contact the  Administrator?

https://futurefocus.staff.hsbc.co.uk/-/media/project/futurefocus/information-centre/deferred-db/other-information/deferred-revaluation.pdf

I don't know what the significance of 1/1/2004 is

See above link which may explain the pension statement  for 2004?

In the past, the Bank, with Trustee approval, has granted discretionary increases over and above the statutory revaluation to deferred pensions (see examples of how this affects the deferred pension on page 2 & 3). However each year since 2005, even though the Bank has formally considered whether to grant them, it hasn’t done so. The Trustee isn’t able to grant them on its own.

Have you obtained a State Pension Forecast?

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

3card

hyubh said:

Narrowboat said:

Thanks xylophone. Yes I was a Midland bank employee with NRA of 60 (male) - joined in 1989. Page 21 of the member guide you posted is exactly where I took the quote "part of the way towards protecting your pension against the impact of inflation" from.

I probably was given a statement at the time, but being in my 20s I naively didn't pay much attention to it. And yes I am aware of HSBC's pension clawback - it's their approach in using this little trick which makes me nervous about how they handle deferred pension increases.

They will handle them according to scheme rules. Your pension will be split between excess and GMP; I think the Midland section uses S148 revaluation for the latter, which is basically general wage inflation. Statutory excess revaluation for a 1998 leaver is inflation capped to 5% across the whole period; some HSBC sections at least have scheme-specific revaluation however, statutory being an underpin. I'd check with the administrator for what exactly your applicable revaluation basis is.

PS - the scheme was non-contributory when you were a member. So I wouldn't necessarily think you have been too hard done by overall

Whilst most of this is correct the Midland Bank were not the best salary payer but the selling point was that you will be in a non-contributory pension that will not cost you anything.
It could be argued that the lower salary paid to employees throughout the years of being part of this pension scheme were indirectly a payment towards this pension which when reaching state retirement age would be subject to the 'clawback'