UKAEA pension, lump sums and retirement date

MX5huggy

ProDave said:

MX5huggy said:

Maybe you should go now:- 

What is Pension Increase (PI) and when will it be applied?

Pension Increase is the annual increase applied to your pension. The increase has been calculated and applied in line with your Scheme Rules and statutory requirements. The increase for April 2022 is 3.1%. Any pension which had been in payment for less than a year is increased by a proportionate amount depending on when the pension started during 2021/22

You’ll get 8/12ths of Aprils CPI increase on your pension forever compared with whatever paltry pay rise is eventually agreed for this year. 

Is that from the UKAEA scheme rules or somewhere else?

UKAEA website https://myukaeapension.equiniti.com/pi-faqs/

I’m sure somewhere it will say the rules trump the website but I would treat it as the rules. 

ProDave

MX5huggy said:

Maybe you should go now:- 

What is Pension Increase (PI) and when will it be applied?

Pension Increase is the annual increase applied to your pension. The increase has been calculated and applied in line with your Scheme Rules and statutory requirements. The increase for April 2022 is 3.1%. Any pension which had been in payment for less than a year is increased by a proportionate amount depending on when the pension started during 2021/22

You’ll get 8/12ths of Aprils CPI increase on your pension forever compared with whatever paltry pay rise is eventually agreed for this year. 

Thanks for clarifying the source.

This does indeed seem strange.  So if I start drawing the pension in March, then the increase I would get in April would only be 1/12 of the annual rise that "long term" pensioners would receive.

That does seem unfair and rather strange.

My thinking is now more reason to defer a couple of months.  My reason for that is that all the time this has been deferred, the quoted pension on my retirement date has gone up each year in line with the inflation rise added.  So if it was still in deferall in April, past experience would suggest the deferred pension would go up by the full inflation rate applied.  Though I cannot find anything in the scheme rules detailing exactly how increases are applied while in deferall. 

Compare that to starting to pay the pension in March and it looks like instead you only get a tiny rise that first year.

I have sent an email to the scheme administrators to try and clarify this question and asked for a formal quote for payment starting in May 2023

MX5huggy

I couldn’t quickly see is this a Final Salary scheme, or Career average (CARE) scheme? 

If the latter probably does not matter because you’ll get 11/12th of the inflation increase on your accrued benefits. 

ProDave

This is a Final Salary pension in the UKAEA Combined Pension Scheme

ProDave

I have had an answer from the pension adminstrators.

It says under the scheme rules it is not possible to defer the pension beyond normal retirement age, which is the date in March.  So any theoretical increase in the lump sum is not possible.

They do confirm however that the pension in payment will go up in April in line with the normal annual rise.