GMP increase 2022

MrsAlpine

I can't spell today, apologies. I meant he reached SOS in 2018. 

xylophone

no he reached SOS in 2018.

"Help, I need somebody...."?

MrsAlpine

xylophone said:

no he reached SOS in 2018.

"Help, I need somebody...."?

Ha ha. SPA of course. I reached SOS though.

He has emailed the pension company to say the increase should be 3%. Will post their reply. 

xylophone

Has he received his pension advice for the month of April?
Is the pension paid in advance?

MrsAlpine

He has received a notice saying his total pension was x and from April 2022 will be x and has increased by a few pounds. Only a small  part of his total pension is post 88 GMP and this has increased by 0.5%.

Not sure about advance or arrears. I will have to look it up. 

What you thinking, Xylophone? 

xylophone

Only a small  part of his total pension is post 88 GMP and this has increased by 0.5%.

I don't understand this.

Once your husband reached age 65,  he would have received notification that his scheme pension would be split into pre 88 GMP, post 88 GMP and excess.

The scheme  was not required to pay any increase on pre 88 GMP,  but was required to pay up to 3% on post 88 GMP and whatever scheme rules required on the excess.

Under the old dispensation, (and assuming that the pensioner's scheme pension had not been a deferred pension where GMP increases in deferment were at "fixed rate"), any increase in pre 88 GMP and any increase over 3% to post 88 GMP would be paid with the state pension.

See https://www.wypf.org.uk/pensioner/all-about-my-pension/whats-gmp-and-how-does-it-affect-me/

Your husband reached SPA in the new scheme - the arrangement above re GMP increases paid with SP came to an end.

Nevertheless, the occupational scheme remains liable for increasing the post 88 GMP by CPI inflation up to 3%.

https://commonslibrary.parliament.uk/research-briefings/sn04956/

For 2022, the increase is 3%.

https://www.legislation.gov.uk/uksi/2022/297/article/2/made

Increase of guaranteed minimum pensions

2.  For the purposes of section 109(2) and (3) of the Pension Schemes Act 1993, the percentage by which there is to be an increase of the rate of that part of guaranteed minimum pensions which is attributable to earnings factors for the tax years in the relevant period(1) is 3 per cent. 

MrsAlpine

Thanks for the information. he reached SPA in 2018.

His total pension was 3781 and 839 of that is post GMP. The rest is pre 88 gmp. There is no excess. 

It's only small but all the more reason to check its right I think. 

The 839 element has been increasing each year. They only ever tell you the total amount has changed from 3780 to whatever the new figure is but I know how much the 839 has increased by each time as I can subtract the pre 88 element that stays frozen. 

The increase this year was just over 4 pounds, hence his email to ask how much they'd increased it by. They confirmed 0.5 %. I wanted to check my facts with you before we told them we think it should be 3 %.

Thanks 

MrsAlpine

Finally got a reply after writing to the pension administrator again and also the pension trustees. Their response sounds odd to me..... 

As your pension increases on the 1st April each year, the statutory increase at that time applies. So from 1 April 2022 the increase from 6 April 2021 applies, which is 0.5 %. 

An old colleague, also with a dairycrest pension but administered by a different company has his increased by the correct statutory amount of 3%. So its not a trustee policy. 

Regards 

xylophone

As your pension increases on the 1st April each year, the statutory increase at that time applies. So from 1 April 2022 the increase from 6 April 2021 applies, which is 0.5 %. 

An old colleague, also with a dairycrest pension but administered by a different company has his increased by the correct statutory amount of 3%.

This seems extremely strange - is the colleague in a different section of the scheme that has a different PI date?

MrsAlpine

I'm not sure. 

I'd have thought all post 88 GMPs in all schemes would have to increase on 6th April by the amount stated in the statutory orders.