Rules about getting a retirement quote

Tony_J

Hello,
I will soon be turning 64 (no Beatles songs please) I have what I believe is called a defined benefits pension from a company I worked at between 1987 & 1995.  I asked for a retirement quote in February.  I asked for the quote because was a bit concerned, as when I looked online, it seemed to suggest a forecast of around £1,500 per year, which looks very low.  I dug out a letter from 2007 that estimated over £6000 per year retiring at 65.

When I chase them, they say they are waiting on information about my national insurance contributions.  I wrote them an email last week asking if they had received the information.  If not, please give me details of who they contacted to get the information, I've had no reply.  I wonder if there is any significance in the fact it will soon be less than a year until I reach the schemes retirement age.  Is this a deadline I should be concerned about for any reason.

xylophone

When I chase them, they say they are waiting on information about my national insurance contributions. 

In respect of a deferred defined benefits pension from  1995?

This seems quite odd.

When you left the scheme, were you give a statement of deferred benefits showing pre 88 GMP/post 88 GMP/excess?

If so, do you still have it?

Have you tried

https://www.gov.uk/check-national-insurance-record

And have you obtained a state pension forecast?

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

sheslookinhot

I’m wondering what relevance NIC’s have to a defined benefit pension ?

Tony_J

I don't think I was given any kind of statement.

My NI record shows all years fully paid.  So my state pension forecast is for the full amount

I think the reasoning for the NI info they say they are waiting for was due to "opting out".  Which I don't recall it was (and my NI record shows fully paid for the years I worked there)

molerat

Your NI record will show a "Full Year" which means a full "basic" year.  It does not mean you were not contracted out of SERPS which may affect the amount of additional state pension you had and your starting amount at the start of the new scheme in 2016.  Just because all the years are full it does not necessarily mean you will get a full pension.

hyubh

Tony_J said:

When I chase them, they say they are waiting on information about my national insurance contributions.

As xylophone alludes to, the administrator will be checking the scheme's GMP liability.

I wrote them an email last week asking if they had received the information.  If not, please give me details of who they contacted to get the information, I've had no reply. 

They are very likely just being slow in processing your case. Pension scheme administrators use HMRC's online 'GMP Checker' service - it takes approximately 30 seconds (if that) to look up an individual's GMP (https://www.gov.uk/guidance/pension-administrators-check-a-members-gmp). They might be then raising a query to HMRC, but more likely your case is just in their backlog.

My NI record shows all years fully paid.

The terminology is confusing, as 'full year' doesn't actually mean 'contracted in'.

So my state pension forecast is for the full amount

That's possible even if you were contracted out between 87 and 95, given the transitional state pension rules' bias in favour of previously contracted out persons.

I think the reasoning for the NI info they say they are waiting for was due to "opting out".  Which I don't recall it was

In an occupational scheme, it's the scheme that contracted out (not opted out), so in being a member of the scheme, you were contracted out of SERPS. Well, assuming the scheme was indeed contracted out 

That said, it's likely to be in your interests to have been contracted out with the scheme, since then you would have accrued a GMP which if revalued using so-called 'fixed rate', would have increased at a rate of 7% between leaving and your GMP payable age (= 65 if a man). Statutory revaluation of 'excess', in contrast, will be a lot less. (This is all assuming a private sector DB scheme.)

Tony_J

I just checked my state pension forecast.  Its £190.17.  I think that's the maximum it can be.   

hyubh thanks for your reply.  I have to admit I don't fully understand everything you said.  But I think the main takeaway for me is they are dragging their heels.  But as no comments have been made about it soon to be within a year before I start receiving this pension.  I guess the timing is not critical.  

molerat

Tony_J said:

I just checked my state pension forecast.  Its £190.17.  I think that's the maximum it can be.   

hyubh thanks for your reply.  I have to admit I don't fully understand everything you said.  But I think the main takeaway for me is they are dragging their heels.  But as no comments have been made about it soon to be within a year before I start receiving this pension.  I guess the timing is not critical.  

The new full pension is £185.15 which means you had already exceeded the full amount from the start in 2016, nothing you have done since has added to that (apart from the annual inflationary increases of triple lock for the basic amount and CPI for the protected amount)

xylophone

This was a defined benefit occupational pension scheme - the very strong likelihood is that it was "contracted out" of State Earnings Related Pension.

This did not mean that members of the occupational scheme  were exempt from  NI, merely that they (and their employers) paid NI at the lower "contracted out" rate. This covered the accruing of the  (pre 6/4/16) Basic State Pension.

You appear to have access to  your scheme's on line portal - what exactly is shown?

Is it  the pension  entitlement at date of leaving the scheme rather than the revalued pension due at Scheme Normal Retirement Date?

Is a COPE shown on your state pension forecast?

Tommyjw

Tony_J said:

Hello,
I will soon be turning 64 (no Beatles songs please) I have what I believe is called a defined benefits pension from a company I worked at between 1987 & 1995.  I asked for a retirement quote in February.  I asked for the quote because was a bit concerned, as when I looked online, it seemed to suggest a forecast of around £1,500 per year, which looks very low.  I dug out a letter from 2007 that estimated over £6000 per year retiring at 65.

When I chase them, they say they are waiting on information about my national insurance contributions.  I wrote them an email last week asking if they had received the information.  If not, please give me details of who they contacted to get the information, I've had no reply.  I wonder if there is any significance in the fact it will soon be less than a year until I reach the schemes retirement age.  Is this a deadline I should be concerned about for any reason.

They have two months to provide the information at your request, those are the disclosure regulations as set out by legislation.

What can you do about it taking longer ? Not much really. Chase, mentioning the above, and then raise a complaint.

Tony_J

You appear to have access to  your scheme's on line portal - what exactly is shown?

Is it  the pension  entitlement at date of leaving the scheme rather than the revalued pension due at Scheme Normal Retirement Date?

Is a COPE shown on your state pension forecast?

I don't seem to be able to access the pension website at the moment.
On my state pension forecast COPE estimate is £55.31 per week. 

COPE is something I had no knowledge of before the advise I've had on this forum.  So I'm really grateful for that.  It does potentially open up several other questions for me to look into.  Like does the retirement projection letter I received in 2007 include COPE and if so what percentage of the £6,000 per annum was cope and at some point I will need to start looking into what I should do with the other 3 defined contribution pensions I have.

This retirement lark is hard work