Work pension linked to State pension age

Del118

Is it common for a workplace pension to be linked to state pension age?  In previous years my work pension DB pensionable age was 58, since changes in 2015 it has now been linked to state pension age meaning 67 or now as is being discussed 68.  It seems unfair that you would pay into a workplace pension to have options of early retirement to then find that rules of the pension change and now have to wait until the state pension age anyway.  

molerat

You will still most likely have the option for early retirement but that will be at SP -10 years with a reduced pension.

sevenhills

Retirement age cannot be any age that the pension provider chooses.
Many are increasing their retirement age as the retirement age for the state pension increases, but not the same retirement age. I am sure someone will explain it better than myself 

Del118

Replying to molerat. Yes It still can be taken early as you said, however there is a penalty of around 5 percent loss per year. This was a change also in 2015.

Dazed_and_C0nfused

Del118 said:

Replying to molerat. Yes It still can be taken early as you said, however there is a penalty of around 5 percent loss per year. This was a change also in 2015.

That is very unusual.

Where someone wants their pension to be paid earlier than the NPA, effectively asking for it to be paid over a longer period of time, most DB schemes apply an actuarial reduction to reflect the members request for the pension to be paid longer.

But they don't apply any penalties for doing so.

Do you really mean a penalty or is it just an actuarial reduction?

Del118

I am sure it is a reduction as not seen actuary reduction mentioned before. Would need to check paperwork.

born_again

With ours we are free to enter our chosen retirement age. Many put 55/56. But you can still continue working & paying in after, or take it at that point.

Dazed_and_C0nfused

Del118 said:

I am sure it is a reduction as not seen actuary reduction mentioned before. Would need to check paperwork.

Yes it will be a reduction, that is applied because you are asking for the pension to be paid over a longer period.

That in itself isn't a "penalty", it's the result of your choice to have the pension paid for longer

Del118

Ok thanks. What's really annoying is that prior to 2015 changes I could go at 58 with mo losses incurred, one of the main benefits of my DB scheme. It the "linked to state pension age " that is really bothering me as this is going to keep going up. 
Born 1971 paid into pension 35 years so far.

ewaste

Which pension scheme are you a member of? I'd suspect it's a Public Sector scheme as the majority were reformed in 2015 and Scheme NRA became tied to SPA.

sevenhills

ewaste said:

Which pension scheme are you a member of? I'd suspect it's a Public Sector scheme as the majority were reformed in 2015 and Scheme NRA became tied to SPA.

But the pension money that was paid in prior to the 2015 reforms would still operate under the old rules?