NHS pension final statement 45% less than annual statement

GrubbyGirl_2

Flugelhorn said:

GrubbyGirl_2 said:

Just to check that you are over 65?  

OP said she was taking pension at 60

sorry didn't read that properly

Flugelhorn

GrubbyGirl_2 said:

Flugelhorn said:

GrubbyGirl_2 said:

Just to check that you are over 65?  

OP said she was taking pension at 60

sorry didn't read that properly

It could be the the actuarial reduction has caused the reduction in the figures - NRA for 2008 is 65 

GrubbyGirl_2

Flugelhorn said:

GrubbyGirl_2 said:

Flugelhorn said:

GrubbyGirl_2 said:

Just to check that you are over 65?  

OP said she was taking pension at 60

sorry didn't read that properly

It could be the the actuarial reduction has caused the reduction in the figures - NRA for 2008 is 65 

Indeed, that's what I was thinking

Universidad

alisontaylor94 said:

For the last three years my annual statements have showed a lump sum increasing from £33k to £37k based on early retirement at 60. I’ve now applied for it to start from 31/3/23 but the settlement statement shows £20k.

There's two main possibilities here: either you have made a mistake, or they have.

The thing that makes me wonder if you have misunderstood something is the fact that you're talking about a lump sum, rather than about the annual pension, which would generally be the more important of the two things.

In fact, as another commenter has posted, for the 2008 scheme it might be preferable to take no lump sum at all, as it's (generally) relatively poor value to commute part of your annual pension to take a lump sum, unless you've got a good reason for doing that.

You say that your annual statements have shown a lump sum in the region of 33-37K. Do you really mean a lump sum? Or do you mean your annual pension amount?

What annual pension do you expect to get? Has that also changed from your expected amount?

xylophone

Information provided on annual TRS statements is the value of your defined benefit pension at that time (from the previous April), if taken at 'Normal Retirement Age', for 2008 scheme,  this is 65.     If you are taking at 60, there would be 5 years of Acutarial Reduction (from that value at that time, because it is being paid sooner and for longer).     Did you account for this (24%) reduction to your Annual Pension 

In her first post, the OP states

For the last three years my annual statements have showed a lump sum increasing from £33k to £37k based on early retirement at 60. 

If she requested a quote based on early retirement at 60, the AR should have been applied before providing the quote?

xylophone

I now can’t afford to retire on that lower lump sum and yearly pension which is also dramatically reduced. 
Please can you help ?

OP, as part of your retirement planning, have you obtained a state pension forecast?

You seem to be indicating that you plan to give up paid employment next month?

GrubbyGirl_2

Universidad said:

alisontaylor94 said:

For the last three years my annual statements have showed a lump sum increasing from £33k to £37k based on early retirement at 60. I’ve now applied for it to start from 31/3/23 but the settlement statement shows £20k.

There's two main possibilities here: either you have made a mistake, or they have.

The thing that makes me wonder if you have misunderstood something is the fact that you're talking about a lump sum, rather than about the annual pension, which would generally be the more important of the two things.

In fact, as another commenter has posted, for the 2008 scheme it might be preferable to take no lump sum at all, as it's (generally) relatively poor value to commute part of your annual pension to take a lump sum, unless you've got a good reason for doing that.

You say that your annual statements have shown a lump sum in the region of 33-37K. Do you really mean a lump sum? Or do you mean your annual pension amount?

What annual pension do you expect to get? Has that also changed from your expected amount?

I think the OP has misunderstood the Total Rewards Statement.  The TRS gives you all the numbers assuming you will retire at the normal pension age.  The normal pension age under the 2008 scheme is 65 so it will not have shown early retirement at age 60.  There is no special class status under the 2008 scheme (I believe it ended with the 1995 scheme) so there won't be any reduction in the normal pension age.  

If it did show 60 then this was a mistake by NHSBSA - it happened to me - and all they will do is say "sorry we made a mistake"  it won't change the fact that she will get a 24% reduction in pension by going 5 years early or will have to work another 5 years to get the full pension

xylophone

it won't change the fact that she will get a 24% reduction in pension by going 5 years early or will have to work another 5 years to get the full pension

I can't quite work out whether or not she is still working for NHS - she says

I have an NHS deferred pension with earnings transferred in from previous pension schemes. 

but perhaps this is just the 2008 pension?

spaniel101

As we know, its all too common for the TRS statements to be taken as gospel, only to discover either several inaccuracies or misunderstandings when it comes to taking your pension.


Also, many people believe the old schemes to be purely 'deferred' and just sat there doing nothing, which is not the case given Final Salary Link (only membership credit/years seized).  If you are currently paying into the 2015 new scheme (payable at Normal/State Retirement Age), you remain a contributing member of the nhs pension (rather than 'Deferred'), with Final Salary Link up to the date of retirement. 

alisontaylor94 said:

I’m in 2008 and 2015 schemes but the issue is with the 2008 scheme. 

OP

- Did you transfer in from the old 1995 scheme (60), to 2008 scheme (65) - or transfer in from an external employer / private pension ?

- Are you still working and a paying member of the new 2015 scheme (67/68) ?

- What leads you to believe your pension is / was payable at 60 / what scheme and age does it implicitly state on your TRS statement for each scheme ?

- Did you apply and pay for a 'Personalised Estimate' from NHS Pensions with a view to a particular retirment date (these are only available/payable on request and it would only be this personalised estimate which would reflect acutarial reductions applicable).

- What is/was the value of the Annual Pension on your TRS statement, both without and with taking a 'Lump Sum of £37K' ?

alisontaylor94

Thanks everyone who responded to this post. 

To clarify I am no longer working for NHS so this is a deferred pension after leaving there in 2012. I’m aware of the deductions for taking lump sum early and the calculation that I received was for the amount I was to receive based on a leaving date of 31/3/23 aged 60( 5 years earlier than pension age for 2008 scheme of 65). I asked for the amount at that date and the £37k was the reduction based on what would have been £48k maximum lump sum. The annual pension was reduced to take into account taking the maximum lump sum available. However of course because the figure is now showing as £20k for lump sum the annual pension has also gone down too. 

I am still working full time for the moment but had chosen to take the lump sum from NHS and semi retire from end March to take up a new part time job until full retirement age.