Another revalution question

Pensions_matter_2

Ive been reading up about this but now very confused and hope the wonderful experts on this forum can help!

My NRD is end of January. I became a deferred member of the scheme in April many years ago. If I delay retirement till after NRD then I understand that late retirement factors are applied. Does this mean that if I decide to take my pension in say May this year I will not benefit from the September 2022 revaluation figure as my NRD is before the next anniversary (full year) of becoming a deferred member?  

Dazed_and_C0nfused

Which scheme is probably needed for anyone to know.

Pensions_matter_2

Apologies - Ive confused the issue as I meant to say if I decide to take my pension in May next year (after my NRD and another full year after being deferred). Its a private scheme with capped indexation. Im just wondering if its not possible for me to benefit from the cpi revaluation increase in September because I will not have another full year in deferral by the time I reach my NRD.

I hope that makes sense! 

mavwa

Nobody can tell you for sure without looking at the rules (and any administrative quirks) of your scheme, so you need to ask the administrators.

The standard position is that you get revaluation totalling the number of complete years between your date of leaving and your retirement date. You take the calendar year of your retirement date. Your end point for inflation is the prior year’s September. Then you count back the number of complete years from that. So any retirement in calendar year 2023 will usually be based on inflation up to September 2022, hence including the period of high inflation.

Pensions_matter_2

That has helped - I think I get this now - the revaluation factor applied in January will take account of the Sept figure (which should bump things up quite a but, given the smoothing effect of revalyation), but the number of complete years for me wont change - I cant rack up another year by deferring post NRD. 

Pensions_matter_2

I think one thing that previous threads on this topic may not make clear enough is that whole years of deferral for revaluation purposes only count if they fall fully in the period up to your NRD. You cannot delay your retirement date till after your NRD so as to get another whole year of deferral based on anniversary of leaving. So complicated! 

So far as my case is concerned I think I will benefit from a very likely high inflation figure for Sept 2022 (as I will retire and take my pension end Jan 2023 which is my NRD), though I will lose the inflation increase amount for the year I left service (which wont be as high as 2022 figure). Right now, without the Sept 2022 figure I wont know how much pension I will get of course, but its almost certain to be higher than current estimate based on current revaluation figures.

mavwa

Yes, correct, revaluation usually stops at the NRD specific to that tranche of pension (people commonly have some tranches at 60 and others at 65) and the late retirement factor would take over.

snowlaser

The first question is whether your scheme uses statutory revaluation based upon September CPI, or some other method of revaluation.  That's a question for the administrator.

If it uses statutory revaluation, and your NRD is in 2023 (which you say it is) then the September 2022 CPI should be used as part of the revaluation calculation.   

If you defer from Jan to May you will probably get a late retirement factor, which may just be a fixed % and nothing related to inflation.  Again, that's scheme-specific and a question for the administrator.