Rules about getting a retirement quote

sammyjammy

The COPE amount on your state pension forecast just shows you that you were indeed contracted out, the amount bears no relation to your DB pension.

sheslookinhot

sammyjammy said:

The COPE amount on your state pension forecast just shows you that you were indeed contracted out, the amount bears no relation to your DB pension.

Or indeed your state pension

Tony_J

xylophone said:

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

Got on the website today.  I think you've helped answer my initial concern.  Across from the amount it shows on the website it says "To view your full Date of Leaving statement please use the link below." However the link below doesn't work.  But I guess this means it shows the value when I left rather than a forecast. 

Marcon

Tommyjw said:

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.

If you chase you'll simply slow things even more, as they deal with being chased up. If it isn't urgent, there's no suggestion your benefits are at any sort of risk or won't be paid when they fall due, then probably waiting patiently(!) is likely to be the best bet.

The reference to NI may actually link in to a huge exercise being undertaken by schemes such as this one, where the Guaranteed Minimum Pension (the bit you have earned from the scheme, instead of SERPS) has to be equalised. That exercise is taking a long time because it's hideously complicated - but again, it shouldn't delay payment of your pension when it becomes due, so nothing to worry about there.

xylophone

The COPE amount on your state pension forecast just shows you that you were indeed contracted out, the amount bears no relation to your DB pension.

Or indeed your state pension

Not exactly the case.

https://www.gov.uk/government/publications/new-state-pension-if-youve-been-contracted-out-of-additional-state-pension/the-new-state-pension-transition-and-contracting-out-fact-sheet

It would appear that the pension in question was the only contracted out DB scheme of which the OP has been a member.

During that time he was contracted out of the  additional state pension scheme known as SERPS.

On 6/4/16, two calculations were done for him in order to establish his starting amount for new state pension.

Old Rules

NI years/30 x £119.30 (Basic State Pension) + (Additional State Pension - Deduction for Contracting Out)

New Rules

(NI years/35 x £155.65 (New State Pension)) - COPE.

His "starting amount" was the higher of the two.

It would appear that his starting amount was higher than a full new state pension.  He would have started building up entitlement to  additional state pension from the time he ceased contracting out in 1997.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

The amount by which his starting amount was higher than a full new state pension became his "protected payment".

Since 6/4/2016, his full NSP has been revaluing under the "triple lock" (except for the current year) while his Protected Payment has been revaluing by CPI.

This will continue up to and beyond his drawing his state pension in around 2024.

xylophone

But I guess this means it shows the value when I left rather than a forecast. 

This would appear to be the case.

Your deferred pension (GMP and excess) should have been revaluing in deferment.

On the assumption that your scheme is private rather than Public Service,

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

which sets out the statutory rules although it is possible that your scheme rules may be more generous.

The administrator should be able to supply you with a copy of the scheme booklet which should set out the rules for revaluation in deferment.

xylophone

The reference to NI may actually link in to a huge exercise being undertaken by schemes such as this one, where the Guaranteed Minimum Pension (the bit you have earned from the scheme, instead of SERPS) has to be equalised. That exercise is taking a long time because it's hideously complicated - but again, it shouldn't delay payment of your pension when it becomes due, so nothing to worry about there.

Some older posts have indicated difficulties/delays in  certain circumstances because of the equalisation exercise.

https://commonslibrary.parliament.uk/research-briefings/cbp-8427/ may be of interest to the OP.

Tony_J

Well my quote has eventually come through.  I am a little disappointed and would like to ask your opinion.  It is a defined benefit pension for a company I worked at  from 1987 to 1995.  The quote is for £5,782.08 per year.  BUT I have an old letter from them dated September 2007 which estimates £6,122.74 per year.  I guess an estimate means its not precise, but does this sound okay.  I also tried to download my "date of leaving statement" as I found a link on the website.  But that didn't work, so I'm waiting on a response to an email I sent about that.

Thrugelmir

Forecast is what it says on the tin. All based on assumptions. Inflation was most likely lower. Being no investment returns, there's no actual loss incurred. 

Marcon

Tony_J said:

Well my quote has eventually come through.  I am a little disappointed and would like to ask your opinion.  It is a defined benefit pension for a company I worked at  from 1987 to 1995.  The quote is for £5,782.08 per year.  BUT I have an old letter from them dated September 2007 which estimates £6,122.74 per year.  I guess an estimate means its not precise, but does this sound okay.  I also tried to download my "date of leaving statement" as I found a link on the website.  But that didn't work, so I'm waiting on a response to an email I sent about that.

In the 1990s, it was common for schemes to provide estimates which took into account the rates of inflation prevailing at the time, which were much higher then than they were during the first 20 years of this century. So yes, looks perfectly reasonable (sorry!).