Frequency of DB pension quotes

Pat38493

I think I read on here on some thread, that once you reach the age where a DB pension can be put into payment, the administrator is no longer allowed to limit you to one quote or estimate per year, and they are legally obliged to give you a quote for putting your benefits into payment whenever you request it - so theoretically I could ask for one several times a year?

Is that correct?  If correct I am guessing that the obligation only applies to a request for a quote for putting the benefits into payment immediately in the next few months, and not to requests for an estimate for a future retirement date several years away?

Marcon

Pat38493 said:

I think I read on here on some thread, that once you reach the age where a DB pension can be put into payment, the administrator is no longer allowed to limit you to one quote or estimate per year, and they are legally obliged to give you a quote for putting your benefits into payment whenever you request it - so theoretically I could ask for one several times a year?

Is that correct?  If correct I am guessing that the obligation only applies to a request for a quote for putting the benefits into payment immediately in the next few months, and not to requests for an estimate for a future retirement date several years away?

There's no such limit on asking for quotes or estimates either before or after NRD. I wonder if you are thinking of CETV quotes? If so, there is no obligation to provide one at all after you are within a year of reaching NRD, unless your scheme rules provide for something else (unlikely - it's normally a trustee discretion).

Schemes are quite entitled to send you a generic answer in respect of a pension quote/estimate, and many do (typically the statement you received on leaving service, with an indication of how that will be revalued in deferment) until you are very close to retirement. If you've reached NRD, and the scheme allows late retirement, you are likely to get a quote as at NRD, with a note explaining how the pension will increase between NRD and when you finally access your benefits.

Pat38493

Marcon said:

Pat38493 said:

I think I read on here on some thread, that once you reach the age where a DB pension can be put into payment, the administrator is no longer allowed to limit you to one quote or estimate per year, and they are legally obliged to give you a quote for putting your benefits into payment whenever you request it - so theoretically I could ask for one several times a year?

Is that correct?  If correct I am guessing that the obligation only applies to a request for a quote for putting the benefits into payment immediately in the next few months, and not to requests for an estimate for a future retirement date several years away?

There's no such limit on asking for quotes or estimates either before or after NRD. I wonder if you are thinking of CETV quotes? If so, there is no obligation to provide one at all after you are within a year of reaching NRD, unless your scheme rules provide for something else (unlikely - it's normally a trustee discretion).

Schemes are quite entitled to send you a generic answer in respect of a pension quote/estimate, and many do (typically the statement you received on leaving service, with an indication of how that will be revalued in deferment) until you are very close to retirement. If you've reached NRD, and the scheme allows late retirement, you are likely to get a quote as at NRD, with a note explaining how the pension will increase between NRD and when you finally access your benefits.

I was told by my employer in the past that I can only request one DB pension estimate per year.  For CETV estimates surely there could be a mandatory requirement to produce one if the pension is not in payment, even if you are near NRD - for example in the case of a divorce?

Anyway the main question was not about CETV but about getting a proper formal quote to take the pension earlier than NRD - clearly in order to decide whether to take the pension earlier or not, I need to know the exact amount I would get if retiring, for example, at 55, and not some kind of rough estimate.

Specifically, I was thinking of asking them this coming Autumn to provide a quote for what I would get if I took the benefits at 55 (January 2023).  However I obviously don't want to actually pull the trigger unless/until I know the exact amount and it seems favourable (unlikely but it's good to have the actual number available).

DT2001

It maybe that you only get one as it is an estimate.

when I asked (admittedly 11 years ago) for a figure for 6 months later the letter stated it was an estimate and only for illustrative purposes. It covers the administrators for any changes of actuarial reduction or RPI/CPI increases (as they will be an unknown). Having said that they should be fairly accurate and then I got an definitive options letter 

Brie

You should be getting a benefit statement each year as well.  So asking for one means you are getting 2.  If you time it right you could get the benefit statement which is based on the previous tax year and then you could ask for one as of October or similar for comparison.

I would have thought there wouldn't be much of a change though unless you are fortunate enough to still be an active member of a DB.  So many shut down years back.

Pat38493

Brie said:

You should be getting a benefit statement each year as well.  So asking for one means you are getting 2.  If you time it right you could get the benefit statement which is based on the previous tax year and then you could ask for one as of October or similar for comparison.

I would have thought there wouldn't be much of a change though unless you are fortunate enough to still be an active member of a DB.  So many shut down years back.

I do not receive anything every year.  I only receive something when I have specifically asked for it.  The pension was deferred in 2008 (for all contributors).  (It is also currently undergoing a buy out by Aviva).

Part of the reason I want to get an update at 55 is that I want to re-validate the estimates they gave me a couple of years ago as I was not able to match up their calculations with all of the information in the pension fact sheet - my calculated amount was less than what they estimated based on the commutations mentioned in the estimates.  That's why I plan to get another one to compare.

Marcon

Brie said:

You should be getting a benefit statement each year as well.  So asking for one means you are getting 2.  If you time it right you could get the benefit statement which is based on the previous tax year and then you could ask for one as of October or similar for comparison.

Only if you are still in active membership. Deferred members certainly don't get the automatically.

Marcon

Pat38493 said:

Marcon said:

Pat38493 said:

I think I read on here on some thread, that once you reach the age where a DB pension can be put into payment, the administrator is no longer allowed to limit you to one quote or estimate per year, and they are legally obliged to give you a quote for putting your benefits into payment whenever you request it - so theoretically I could ask for one several times a year?

Is that correct?  If correct I am guessing that the obligation only applies to a request for a quote for putting the benefits into payment immediately in the next few months, and not to requests for an estimate for a future retirement date several years away?

There's no such limit on asking for quotes or estimates either before or after NRD. I wonder if you are thinking of CETV quotes? If so, there is no obligation to provide one at all after you are within a year of reaching NRD, unless your scheme rules provide for something else (unlikely - it's normally a trustee discretion).

Schemes are quite entitled to send you a generic answer in respect of a pension quote/estimate, and many do (typically the statement you received on leaving service, with an indication of how that will be revalued in deferment) until you are very close to retirement. If you've reached NRD, and the scheme allows late retirement, you are likely to get a quote as at NRD, with a note explaining how the pension will increase between NRD and when you finally access your benefits.

I was told by my employer in the past that I can only request one DB pension estimate per year.  For CETV estimates surely there could be a mandatory requirement to produce one if the pension is not in payment, even if you are near NRD - for example in the case of a divorce?

Anyway the main question was not about CETV but about getting a proper formal quote to take the pension earlier than NRD - clearly in order to decide whether to take the pension earlier or not, I need to know the exact amount I would get if retiring, for example, at 55, and not some kind of rough estimate.

Not your employer's call; it's a trustee matter.

There's no mandatory requirement in 'normal' circumstances. Divorce is a special case and a member has to pay for the information.

You won't get an 'exact' quote until you actually reach the point of retirement, but it should be close enough to enable you to take a view.

Pat38493 said:

Specifically, I was thinking of asking them this coming Autumn to provide a quote for what I would get if I took the benefits at 55 (January 2023).  However I obviously don't want to actually pull the trigger unless/until I know the exact amount and it seems favourable (unlikely but it's good to have the actual number available).

Think you might mean January 2024 - but you still won't get a guaranteed figure until you actually get there.

Pat38493

Marcon said:

Pat38493 said:

Marcon said:

Pat38493 said:

I think I read on here on some thread, that once you reach the age where a DB pension can be put into payment, the administrator is no longer allowed to limit you to one quote or estimate per year, and they are legally obliged to give you a quote for putting your benefits into payment whenever you request it - so theoretically I could ask for one several times a year?

Is that correct?  If correct I am guessing that the obligation only applies to a request for a quote for putting the benefits into payment immediately in the next few months, and not to requests for an estimate for a future retirement date several years away?

There's no such limit on asking for quotes or estimates either before or after NRD. I wonder if you are thinking of CETV quotes? If so, there is no obligation to provide one at all after you are within a year of reaching NRD, unless your scheme rules provide for something else (unlikely - it's normally a trustee discretion).

Schemes are quite entitled to send you a generic answer in respect of a pension quote/estimate, and many do (typically the statement you received on leaving service, with an indication of how that will be revalued in deferment) until you are very close to retirement. If you've reached NRD, and the scheme allows late retirement, you are likely to get a quote as at NRD, with a note explaining how the pension will increase between NRD and when you finally access your benefits.

I was told by my employer in the past that I can only request one DB pension estimate per year.  For CETV estimates surely there could be a mandatory requirement to produce one if the pension is not in payment, even if you are near NRD - for example in the case of a divorce?

Anyway the main question was not about CETV but about getting a proper formal quote to take the pension earlier than NRD - clearly in order to decide whether to take the pension earlier or not, I need to know the exact amount I would get if retiring, for example, at 55, and not some kind of rough estimate.

Not your employer's call; it's a trustee matter.

There's no mandatory requirement in 'normal' circumstances. Divorce is a special case and a member has to pay for the information.

You won't get an 'exact' quote until you actually reach the point of retirement, but it should be close enough to enable you to take a view.

Pat38493 said:

Specifically, I was thinking of asking them this coming Autumn to provide a quote for what I would get if I took the benefits at 55 (January 2023).  However I obviously don't want to actually pull the trigger unless/until I know the exact amount and it seems favourable (unlikely but it's good to have the actual number available).

Think you might mean January 2024 - but you still won't get a guaranteed figure until you actually get there.

Out of interest, why would I not be able to get a CETV value if I am near NRA?  There wouldn't be any more or less reason to request one than at any other time?

Regarding the DB pension then, so if I get an estimate of say £15K, and then I say - ok go ahead I want to start my pension in January 2024.  They then write to my in January 2024 saying - your pension will now be paide and is (now correctly calculated) £13K.  Am I allowed to change my mind and reverse my decision?

JoeCrystal

Pat38493 said:

Regarding the DB pension then, so if I get an estimate of say £15K, and then I say - ok go ahead I want to start my pension in January 2024.  They then write to my in January 2024 saying - your pension will now be paid and is (now correctly calculated) £13K.  Am I allowed to change my mind and reverse my decision?

Nope. After all, they have to protect all other scheme members. Put it on the other foot; what if they give you an estimate of £13k per year, but it was £15k when paid out? I assume you will be happy not to accept the latter one? I doubt it.

Besides, you should be able to work out what the expected payments are anyway? You do have all the relevant information at hand, as well as able to request such information from the scheme on what are the rates, factors and so on.

Pat38493

JoeCrystal said:

Pat38493 said:

Regarding the DB pension then, so if I get an estimate of say £15K, and then I say - ok go ahead I want to start my pension in January 2024.  They then write to my in January 2024 saying - your pension will now be paid and is (now correctly calculated) £13K.  Am I allowed to change my mind and reverse my decision?

Nope. After all, they have to protect all other scheme members. Put it on the other foot; what if they give you an estimate of £13k per year, but it was £15k when paid out? I assume you will be happy not to accept the latter one? I doubt it.

Besides, you should be able to work out what the expected payments are anyway? You do have all the relevant information at hand, as well as able to request such information from the scheme on what are the rates, factors and so on.

So does the pension scheme have access to all that information and it's their actual job to do those calculations every day - therefore there is no reason for them to not give a correct estimate (except if there is unknown information like statutory revaluation factors not yet released or whatever).

I don't really see that as normal in any other walk of life - in any other scenario if a business quoted me a price for something and I ordered it, and they then increased the price by 20%, I could cancel my agreement.

But actually what you are saying exactly illustrates the point because when I tried to manually calculate my estimate using the data from their fact sheets, it came to a number about 20% lower than what they quoted in their last estimate.  I am using the lower number to be safe, but it could also be that they are correct and their factsheet is somehow misleading or there are complexities that I'm not aware of.