Government Pension Protection Fund New Calculation Formula

Marcon

Sharpcol said:

Marcon said:

Sharpcol said:

Hello Can the Government really change the Pension Protection fund Calculation Formula for Pension compensation.   Note they have already stole a Full 10% of my pension Pot for entering the PPF.  They now have announced that they are going to take another chunk of all the pension pots in the fund from 1st March 2023.  This works out to another 7% lost.  Is this Legal?   I am due to retire in May 2023 but now lose 7% of my pension fund due to the New Calculations.  Note i am 55 in May so cannot retire before March 1st when this comes into force.

You say you are 'due to retire' at 55, but that is presumably early retirement - i.e. well before your original scheme's normal retirement date?

Early retirement factors can be changed at any time (as indicated on the PPF website), and the sharp changes in interest rates are driving the change. However unwelcome this is, it is indeed legal, and many ongoing private sector schemes are also changing their factors.

Hi Marcon

The reduction effects Normal Retirement Dates not just Early.

Due to recent changes in financial markets, we've needed to review our factors again and have made some changes which will come into effect for anyone retiring on or after 1 March 2023. Depending on when you retire, the new factors will have a different impact on what you receive:

Normal Pension Age

Starting your payments at your normal pension age with a tax-free lump sum will result in a smaller lump sum for the same amount of annual compensation given up.

Early Retirement

Taking early retirement, before your normal pension age, will result in a lower level of compensation each year than using the current factors.

If you plan to take a tax-free lump sum alongside early retirement, the new factors will result in a smaller lump sum and a lower level of compensation each year.

If your original scheme had still been operational, they too would have been making similar changes to their early retirement and lump sum factors.

najan49

Sharpcol said:

Hello Can the Government really change the Pension Protection fund Calculation Formula for Pension compensation.   Note they have already stole a Full 10% of my pension Pot for entering the PPF.  They now have announced that they are going to take another chunk of all the pension pots in the fund from 1st March 2023.  This works out to another 7% lost.  Is this Legal?   I am due to retire in May 2023 but now lose 7% of my pension fund due to the New Calculations.  Note i am 55 in May so cannot retire before March 1st when this comes into force.

They didn’t steal 10% of anything - they in fact gave you an uplift on the benefits that your pension scheme could have afforded, if they hadn’t stepped in.