Frequency of DB pension quotes

NoMore

Pat38493 said:

there are complexities that I'm not aware of.

Probably that (deferral rate possibly?), but just ask your provider. I have gotten a full commutation table, deferral table and the rules around applying these off my provider by just asking them. I now have a SS that agrees with all my statements since producing it.

sandsy

As a deferred member, you're not entitled to anything except one guaranteed transfer value each year, until 12 months before retirement. Some schemes will provide projections, others won't. My deferred DB scheme refused. Since turning 55, I've been able to request early retirement quotes but they refuse to provide projections to normal retirement age which depend on assumptions about future inflation. They also refuse to share early retirement factors or commutation factors that are subject to change.

There is only a statutory right to transfer until 12 months before normal retirement age. Some schemes will permit it within the final 12 months if it is written into the scheme rules.

Tommyjw

sandsy said:

As a deferred member, you're not entitled to anything except one guaranteed transfer value each year, until 12 months before retirement. Some schemes will provide projections, others won't. My deferred DB scheme refused. Since turning 55, I've been able to request early retirement quotes but they refuse to provide projections to normal retirement age which depend on assumptions about future inflation. They also refuse to share early retirement factors or commutation factors that are subject to change.

There is only a statutory right to transfer until 12 months before normal retirement age. Some schemes will permit it within the final 12 months if it is written into the scheme rules.

Whats always interesting to me is it's a specific disclosure requirement for a DB scheme to provide details of the benefits payable "from the date benefits are payable" (being the schemes NRA). Yet I read so many comments here of people being refused any information.. 

Now in doesnt go any deeper than that so theory they could provide the vaguest estimate ever based on a random guessed future inflation increase which might not be helpful at all, but it would still fit the vague disclosure requirement of giving you something.

So if a DB scheme of yours provides absolutely nothing.. well I'm no lawyer but my view, those of the two DB admin companies I have worked for  and those of all the DB schemes I have worked on is the Trustee isn't quite doing their job.

Marcon

Pat38493 said:

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?

If you are less than a year away from your scheme's NRA, you no longer have a statutory right to a transfer - hence there is no statutory entitlement to a CETV. Some trustees offer transfers on a non-statutory basis, so you'd need to ask your scheme if it does that - although if you intend to retire early it's a moot point, since you can't transfer once a DB pension is in payment.

Marcon

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.

Joe - I think you've answered a slightly different question from the one I believe OP is asking.

OP - if the benefits haven't actually come into payment (i.e. any tax free lump sum hans't yet been paid/the pension hasn't started), then yes, you can change your mind and postpone drawing your pension. What you can't do (and I think this is the thrust of Joe's answer) is insist on the higher amount. Only in the most exceptional circumstances would a member be able to 'claim' benefits better than those promised under the rules. 

Pat38493

Marcon said:

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.

Joe - I think you've answered a slightly different question from the one I believe OP is asking.

OP - if the benefits haven't actually come into payment (i.e. any tax free lump sum hans't yet been paid/the pension hasn't started), then yes, you can change your mind and postpone drawing your pension. What you can't do (and I think this is the thrust of Joe's answer) is insist on the higher amount. Only in the most exceptional circumstances would a member be able to 'claim' benefits better than those promised under the rules. 

OK - but if it’s anything like my wife’s NHS pension when it was put into payment, the money just arrives in your account and then a week later you get a letter telling you how much your pension is!  I can only change my mind if I definitively know what the payments will be.

Regarding the point on retiring early and therefore CETV is not relevant - that would only be if I put the DB pension into payment early with commutation.  I can also retire and use other DC funds and wait till normal NRA to take the DB pension, so in that case I guess a transfer would still be possible up until 1 year before NRA.

This also raises a further complication - my DB pension seems to have a combination of different parts to it and one of them has an NRA of 60, whilst the others are 65.  In the context of the above rule it’s then not clear if that means transfer is not possible after age 59 or after age 64.