GMP increase 2022

xylophone

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. 

I would have thought so as well - I have checked with a relative who has post 88 GMP. 

His DB scheme pension  increase (excess only) takes place on 1 July each year.

The pre 88 GMP is not increased by the scheme - the post 88 GMP  is increased (up to 3% CPI) in April each year.

The pension is paid in advance on first of each month (unless the first falls on a weekend or bank holiday in which case the next working day).

The  post 88 GMP increase (2022 rate from 6 April) was paid in his 1 April pension. 

Lemon_dr1zzle

I have never heard of it being done like that before 

xylophone

I have never heard of it being done like that before 

Do you mean as per the OP or per my post?

Another example from Shell Scheme  https://pensions.shell.co.uk/scpf/resources/factsheets/_jcr_content/par/expandablelist_1837370777/expandablesection.stream/1561562303313/9faab99619684a3ca564d33e10469e34bbe84815/gmp-factsheet-2019.pdf

• The SCPF pays any increase due on the Post 88 GMP part of your pension with effect from 1 May each year. The balance of your SCPF pension will continue to be increased based on the Retail Prices Index as at December, capped at 7% for pre 2009 joiners and 5% for post 2009 joiners (payable with effect from 1 April each year).

biscan25

MrsAlpine said:

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. 

It's not quite that simple. Sure that is the easiest way of doing it, but as long as the total benefit exceeds the statutory minimum, and the benefit is administered in line with the rules then applying a different increase is fine. The statutory increase on pre 1997 pension in excess of GMP is zero.

Schemes use this fact to simplify administration.

One such example is where a scheme gives a proportionate first increase. Strictly statutory GMP gets a full increase, but as long as the total benefit exceeds the statory minimum this is fine.

Same with schemes with non April increase dates.

Other schemes are more generous and give GMP fixed 3% increases regardless of inflation,

xylophone

The statutory increase on pre 1997 pension in excess of GMP is zero.

Although some schemes do increase according to scheme rules.

In the OP's case, her husband's Dairy Crest pension is all GMP.

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.  

She has been told that the reason why the post 88 GMP increase  has been applied  at the 2021 rate is that the  Dairy Crest scheme's pension increase date is 1 April.

Despite this, it seems that her husband's old colleague's Dairy Crest post 88 GMP has been increased at 2022 rates.

She does state that his pension is administered by another provider.

https://forums.moneysavingexpert.com/discussion/comment/79147484/#Comment_79147484

biscan25

If it's all GMP, then yes the pension is being underpaid.
Not by much mind, as the first increase in 2019 (assuming the husband's birthday is after April) would presumably have been 3% instead of the statutory 2.4%, presuming consistent year on year treatment.
Not sure how much joy you'd get complaining to the administrator though, might take a while to recieve the correct pension.

biscan25

Oh and if he hasn't already been given an adjustment for GMP equalisation, this uplift for a GMP only pension he can expect will be substantially bigger Back of the envelope says 14% or so + backpay.

xylophone

Not sure how much joy you'd get complaining to the administrator though, might take a while to recieve the correct pension.

I'm wondering whether she might get some assistance here

https://moneyandpensionsservice.org.uk/

MrsAlpine

Thanks for all this, I need to re read it all. 

MrsAlpine

Assuming they always have and always will apply the previous years increase on the 1st April as per their response, there will only be a chance of losing out, or indeed gaining on the last year he gets his pension.

Re GMP equalisation, and please do correct cme if I'm wrong, but as he left the company in Feb 1990 this would not apply. 

Thanks for all your information, but it still seems a weird way to apply increases made by statutory orders.