Deffered pension valuation

Cear

Thank you all for your replys.

I have gone back and looked at the statements again and I think that they have been calculated to show what they are worth as of date of asking and using Zagfles information confirms it (thanks Zagfles this will help to keep up with it).

The GMP I think has been added but not sure will post details to see if someone can work it out.

My dates were slightly out (teach me to try remembering and my amounts of no lump sum is actually what worth in 2021 I think).

have another couple of questions

It states: Pension at date of retirement before retirement factor applied what is retirement factor? does this mean it is likely to go up or down.

It also shows Spouse's final salery pension but I am divorced (which they are aware of as states on the Illustration and so plan to not need the Spouce part will this mean I will get a bigger pension? (I realise they probally have to include it at the moment incase I remarry.

Pension 1 Dates 01/01/1989-30/09/1995 (Date of Calculation 31/03/2021)

Deferred pension at date of leaving:  £1,465.32  
Pension at date of retirement before retirement factor applied:  £2,866.44  
Your estimated pension at retirement consists of the following:  
Final Salary Pension payable:  £ 2,866.44 p.a.

CRB Pension payable : £       0.00 p.a.

Total Pension at proposed retirement date: £ 2,866.44 p.a.  
Spouse’s Final Salary pension of  £ 1,911.00 

Spouse’s career revalued benefits pension:  £        0.00 p.a.

Total Spouse’s Pension at proposed date of retirement:  £ 1,911.00 p.a. payable on your death.  
You have the following options in taking this pension:  
1) Total pension with no lump sum of:  £ 2,866.44 p.a.  Plus an automatic cash lump sum of:  £0.00    

Or

2) Maximum additional lump sum payable:              £13,362.35  Plus an automatic cash lump sum of:  £0.00  Plus  Reduced pension payable:    £ 2,004.36 p.a.  

 

Pension 2 Dates 24/03/1997 - 26/08/2001 (Date of calculation 31/03/2021)

Deferred pension at date of leaving:  £1,402.23  
Pension at date of retirement before retirement factor applied:  £2,374.20  
Your estimated pension at retirement consists of the following:  
Final Salary Pension payable :  £2,374.20 p.a.

CRB Pension payable : £       0.00 p.a.

Total Pension at proposed retirement date: £2,374.20 p.a.  
Spouse’s Final Salary pension of  £1,582.80 

Spouse’s career revalued benefits pension:  £       0.00 p.a.

Total Spouse’s Pension at proposed date of retirement:  £1,582.80 p.a. payable on your death.  
You have the following options in taking this pension:  
1) Total pension with no lump sum of:  £2,374.20 p.a.  Plus an automatic cash lump sum of:  £       0.00    

Or

2) Maximum additional lump sum payable:              £11,067.70  Plus an automatic cash lump sum of:  £         0.00  Plus  Reduced pension payable:    £1,660.20 p.a.  

Applicable to both

The amount of your deferred pension will have been notified to you shortly after your date of leaving.  It is also shown on the enclosed statement.  During the period of deferment, your final salary pension will have been increased in line with the movement in the Retail Prices Index (RPI), subject to a maximum of 12% per annum.  If you left  on or before 31 December 1985, your deferred pension will only have been increased with effect from 1 January 1986.  If you left  after 31 December 1985, your deferred pension will have been increased throughout the period of deferment.  Your deferred final salary pension may include a guaranteed minimum pension (GMP).  During the period of deferment, this element of your deferred pension will have increased at a different rate to the remainder of your pension.  If you left  after 5 April 1997, the GMP element has been increased in line with the movement in the RPI since you left the scheme.  If you left before 6 April 1997, the GMP element has been increased by the lesser of the movement in the RPI since you left and 5% per annum.

Regarding GMP I was opted out of SERPS and the NI that I saved was put into a seperate rebate personal pension plan.

Pensions are so confusing and I have left it way to late to look at them but hopefully have some time to be able to repair some of the damage. need to work out if worth tking the lump sums at 60 and putting into an ISA or to not take for the bigger pension.

I cannot afford to retire at 60 will be working till 67 so will be paying tax on these pensions will I have to pay NI on this income as well as I will be working full time? Plan to put more into my current work pension/ISA with the extra I get from these pensions as don't want to get used to the extra money for it then to drop at pension age.

Thanks again everyone for all your help not only with this but also with the forum it is very enlightning to read the posts.

xylophone

It states: Pension at date of retirement before retirement factor applied what is retirement factor? does this mean it is likely to go up or down.

Retirement Factor - you should ask the Administrator but likely to mean

  the percentage of pay to which you are entitled for each year of service.

Late Retirement Factor - percentage increase applied if a member defers pension beyond normal scheme pension age

Early Retirement Factor - percentage decrease applied if a member draws the pension before normal scheme pension age.

xylophone

OP, it would appear that you were in a certain institution's Defined Benefit Salary Related Pension Scheme 01/01/1989-30/09/1995.

Most such schemes were contracted out of SERPS - that is to say that all members of such schemes were automatically contracted out simply by virtue of their membership.

Members of COSR Schemes between 1978 and 1997 accrued a Guaranteed Minimum Pension.



In respect of GMP, you should note that for a female, GMP age (the age at which any GMP is payable) is still 60 - for a male it is still age 65. This is despite the fact that State Pension Age (with which GMP Age used to align) has increased and will continue to increase.

In your case, it happens that your GMP age aligns with Normal Scheme Retirement Age in both your schemes.

With regard to Pension 1

You state the figure shown on your statement of deferred benefits on leaving the Scheme but no split between GMP and excess is shown.

You should check with the Administrator on why this is the case - was the Scheme not contracted out?


Between 1995 and  March 1997 you were employed elsewhere and opened a Personal Pension?

You made a personal choice to contract  out of SERPS so that some of your NI contributions would be re-directed to your PP?

Pension 2

In  March 1997 you took employment with another institution offering a Defined Benefit Pension and were employed there until  August 2001.

It was a contracted out scheme?

In this connection, you should note that the accrual of GMP in such schemes ceased as from 6/4/97 in favour of what was known as the Reference Scheme Test.

You state that the institution by which you were employed from 1989 was taken over by the second institution but not until after you left in 2001?


From 2001 you have been employed elsewhere and have other pension provision?

When do you reach age 60?

Have you obtained  State Pension Forecast?

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

What exactly does it say?

Is a COPE shown?

I cannot afford to retire at 60 will be working till 67 so will be paying tax on these pensions will I have to pay NI on this income as well as I will be working full time? Plan to put more into my current work pension/ISA with the extra I get from these pensions as don't want to get used to the extra money for it then to drop at pension age.

NI is not paid on pension income but is paid on earned income.

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

Cear

Thanks xylophone

Scheme 1 was contracted out of SERPS

The NI rebate from the government was paid into  a rebate pension policy which must have been arranged through work (was with Norwich union now with Aviva) not knowing much about pensions I thought this was my work pension scheme which I got a statement for each year did not realise I had a DB pension as well as this DC pension. When I left this institute I still got the Aviva statements.

I recieved a letter stating that all of the Institute pensions were being moved across to the University's pensions. I then got another Aviva statement and rang them up asaying I thought the pension had been moved to the university to which they replied that my pension was still with them and that they knew nothing about moving pensions. Knowing the University had taken over the Institute just assumed that it was just a general letter sent to all exemployers.

The Institute was independent but had very close relationships with the university who eventually took them over hence why they also took over the pension schemes.

When I got in touch with the university about pension 2 thats when they told me that I also had pension 1 with them and it was my DB pension from Institute 1. So I rang Aviva to find out what exactly this pension was to find out it was payments from the government for rebate of NI from having opted out of SERPS and that I cannot add to it and as it is a guarenteed with profits and has to increase by at least 4% each year I am better off leaving it alone and not transfering it. My Serps for all of employment at scheme 1 has been payed into it and SERPS from a job I had 2003-2004 has been payed into it This place of work did not offer any pension scheme and I also did not realise that I was opted out of SERPS here only realised when i got a break down from Aviva as to what had been payed into the scheme and when. But not SERPS for scheme 2 or anyother jobs. I have always had a full time job since I left school and always opted out of SERPS since Scheme 1.

I assume that as scheme 1 payed the rebate into this policy this is why there is no GMP breackdown.

Between 1995-March 1997 I was employed else where and payed into a pension opted out of Serps. Was arranging to move this pension to Scheme 2 as had been there just under 2 years so could not leave it there but scheme 2 was taking too long to do the move (only had a certain time limit to do it in although I admit did not arrange it straight awaybut they were still very slow in trying to sort it out) that this employment sent all my pension contributions to the government which apparently they were entitled to do.

Scheme 2 was opted out of SERPS

From 2001 I do have other pension schemes (I am not just relying on the above) but I have about 5 years of having not payed into any scheme from either being in a job with no scheme and with the loss of the pension which did not get transfered so trying to add to my current Employers DC scheme (also paying into their DB scheme) to try to make up for the loss The big advantage of this is that I am now learning about pensions and trying to understand it all.

My Cope is £44.91 and I have 1 year left to pay to get to full state pension which I will do with this financial year so as of April 2023 I will get full state pension at 67. 6 years left till I hit 60.

Although the Aviva pension seems to be doing reasonable I very much doubt it will be paying me £44.91 a week.

xylophone

Scheme 1 was contracted out of SERPS.

The NI rebate from the government was paid into  a rebate pension policy which must have been arranged through work (was with Norwich union now with Aviva) not knowing much about pensions I thought this was my work pension scheme which I got a statement for each year did not realise I had a DB pension as well as this DC pension. When I left this institute I still got the Aviva statements.

I'm sorry but I am utterly mystified.

You state that you worked for a certain Institute which offered its own COSR Pension Scheme.

This was a DB Scheme.  By its nature it was "contracted out" of SERPS so that all members were automatically contracted out of SERPS.

You appear to be saying that as well as this scheme the Institute also arranged another pension policy with NU for all employees to accept SERPS rebates?

How could there be a COSR scheme and the NU policy running at the same time?

xylophone

And with regard to the "statements" to which you refer, have these been provided by the Administrator for the University of Cambridge Pension Scheme or by Aviva?

Albermarle

Although the Aviva pension seems to be doing reasonable I very much doubt it will be paying me £44.91 a week.

Normally you will not have lost out by being opted out of Serps, usually it is the opposite. However not that easy to calculate and difficult to exactly compare with the Cope figure.

As a rough rule of thumb, you could take the current value of the Aviva pension and say you should be able to safely drawdown around 3.5%/4% from it pa.

his was a DB Scheme.  By its nature it was "contracted out" of SERPS so that all members were automatically contracted out of SERPS.

You appear to be saying that as well as this scheme the Institute also arranged another pension policy with NU for all employees to accept SERPS rebates?

Xylophone- Not sure if it helps, but between around 1987 and 2000, I was in a DB scheme and also there was a DC pension at the same time, where the SERPS NI rebates were paid in.

xylophone

Xylophone- Not sure if it helps, but between around 1987 and 2000, I was in a DB scheme and also there was a DC pension at the same time, where the SERPS NI rebates were paid in.

Thank you for this.

Why was there a need for a COSR Scheme and the DC pension?

Normally you will not have lost out by being opted out of Serps, usually it is the opposite. However not that easy to calculate and difficult to exactly compare with the Cope figure.

The COPE amount  is based on all periods of contracting out. If someone has been a member of more than one scheme that was contracted out, the COPE amount represents the COPE in respect of all those schemes.

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

Albermarle

Why was there a need for a COSR Scheme and the DC pension?

It was a long time ago and unfortunately have no idea. All I know that I was in a DB scheme, and that around 1987 we were given info about the possibility of opting out of SERPS by having a DC pension where the associated NI was paid each year.

It must have been OK as the DB pension is now in payment and I still have the DC pension pot !

xylophone

It was a long time ago and unfortunately have no idea. All I know that I was in a DB scheme, and that around 1987 we were given info about the possibility of opting out of SERPS by having a DC pension where the associated NI was paid each year.

Still somewhat puzzled.

https://techzone.abrdn.com/public/pensions/Tech-guide-contracting-out