Cope Serps and all that jazz

Tony_J

Trying to get my head round state pension and opting out.  My state pension forecast (that I will be able to start getting in a little over a year) shows £190.17 per week.  I also see a COPE estimate £55.31 per week.

1987 to 1995 I was in a DB pension from which I will soon be getting an income (aged 65).  1995 to 1998 no private pension earning reasonably good income for the time (+30k). 1998 to now in DC schemes (3)

I think the COPE will be part of the DB pension, but that is only 6k per year, how could I check I’m getting the correct amount.

More curious is that my state pension forecast is slightly higher than new state pension.  Could this be for 1995 to 1998 when I assume I was paying full NI contributions.  If so how is it calculated.

Thanks

Jonty6262

Your in the money. Relax and enjoy.If you get it next year it will be about £208.00 a week

Marcon

Tony_J said:

Trying to get my head round state pension and opting out.  My state pension forecast (that I will be able to start getting in a little over a year) shows £190.17 per week.  I also see a COPE estimate £55.31 per week.

1987 to 1995 I was in a DB pension from which I will soon be getting an income (aged 65).  1995 to 1998 no private pension earning reasonably good income for the time (+30k). 1998 to now in DC schemes (3)

1. I think the COPE will be part of the DB pension, but that is only 6k per year, how could I check I’m getting the correct amount.

2. More curious is that my state pension forecast is slightly higher than new state pension.  Could this be for 1995 to 1998 when I assume I was paying full NI contributions.  If so how is it calculated.

Thanks

1. The DB scheme will have reconciled their GMP (Guaranteed Minimum Pension) figures with the DWP. The GMP is what you'll be receiving from the scheme in lieu of the State Additional Pension you would otherwise have built up during your period of DB scheme membership.

 2. You're under transitional arrangements, given your year of birth. See https://www.barnett-waddingham.co.uk/comment-insight/blog/contracting-out-and-new-state-pension/

Loads of threads on this topic if you need more reading - use the search box above to narrow down to your area of interest.

dunstonh

Trying to get my head round state pension and opting out. 

Opting out has no impact on the state pensions.  However, contracting out does.   I suspect you mean contracting out.

I think the COPE will be part of the DB pension, but that is only 6k per year, how could I check I’m getting the correct amount.

Defined benefit schemes are easy as the benefits are defined.   The COPE figure and what you obtain from being contracted out don't have to match.  You could get more or less than that figure.

More curious is that my state pension forecast is slightly higher than new state pension.  Could this be for 1995 to 1998 when I assume I was paying full NI contributions.  If so how is it calculated.

That is quite normal.   You straddle multiple qualifying regimes and your historic entitlement is transitioned into the single state pension.  If your historic entitlement is greater, you keep that entitlement.

Dazed_and_C0nfused

I think the COPE will be part of the DB pension, but that is only 6k per year, how could I check I’m getting the correct amount.

Ignore the COPE amount.  The DB pension will be based on the scheme rules.  So use those to check what you are entitled to.

And remember the period you paid less NI than most people had to with fondness!

Tony_J

And remember the period you paid less NI than most people had to with fondness!

I have absolutely no issue with not getting something I haven't paid for.  Also no issue with paying my fair share.  It seems to me though that in the end I didn't lose out in any way for paying less NI for a period.  But swings and roundabouts.  I've paid NI for considerably more than 35 years as I assume most people have

It would be nice to be able to calculate my state pension entitlement for myself to be sure its correct; but I'm guessing from replies so far it would be quite a challenge

xylophone

My state pension forecast (that I will be able to start getting in a little over a year) shows £190.17 per week.  I also see a COPE estimate £55.31 per week.

This means that your pension is slightly higher than a full NSP. and indicates that your "starting amount" was higher than a full NSP.

Your COPE was used once only in establishing your "starting amount" at 6/4/16.

Your starting amount was the higher of

Old Rules

NI years/30 (max) x £119.30 (Full Basic) + ( Additional State Pension - Deduction for Contracting Out).

New Rules

{NI years/35 (max) x £155.65 (Full NSP)} -  Contracted Out Pension Equivalent.

Since that time the amount pf your SA that was equal to a full NSP has revalued each April under the "Triple/Double Lock" and the balance by CPI in the previous September.

https://www.gov.uk/government/publications/state-pension-fact-sheets/contracting-out-and-why-we-may-have-included-a-contracted-out-pension-equivalent-cope-amount-when-you-used-the-online-service#:~:text=Pension Equivalent amount.-,The Contracted Out Pension Equivalent ( COPE ),had not been contracted out.

The Contracted Out Pension Equivalent (COPE)

The pension you get from your workplace or personal pension scheme for the periods you were contracted out, should include an amount that, in most cases, will be the equivalent of the additional State Pension you would have got if you had not been contracted out. This is your Contracted Out Pension Equivalent (COPE) amount.

An estimate of your COPE will be shown if you use the online Check your State Pension service or if you request a State Pension Statement through the post. The COPE amount is based on your National Insurance contribution record up to 5 April 2016 used to calculate your Starting Amount for the new State Pension. The COPE estimate shown in your statement is based on April 2016 State Pension rates.

If you were a member of 2 or more contracted out schemes, the COPE amount shown is based on all your schemes and covers all the years you were contracted out.

We will not know the exact amount your scheme will pay you as a result of contracting-out as it will depend on the actual rules of your private scheme, and possibly any investment choices you may make.

1987 to 1995 I was in a DB pension from which I will soon be getting an income (aged 65).

Presumably when you left the scheme you were given a "Statement of Deferred Benefits" showing

Pre 88 GMP

Post 88 GMP

Excess.

Your scheme booklet should indicate how your benefits have revalued in deferment and how they will increase in payment.

Jonty6262

Tony_J said:

And remember the period you paid less NI than most people had to with fondness!

I have absolutely no issue with not getting something I haven't paid for.  Also no issue with paying my fair share.  It seems to me though that in the end I didn't lose out in any way for paying less NI for a period.  But swings and roundabouts.  I've paid NI for considerably more than 35 years as I assume most people have

It would be nice to be able to calculate my state pension entitlement for myself to be sure its correct; but I'm guessing from replies so far it would be quite a challenge

Those that are paid to calculate it get it wrong occasionally. 

xylophone

It would be nice to be able to calculate my state pension entitlement for myself to be sure its correct; but I'm guessing from replies so far it would be quite a challenge

Write to DWP and request full calculation?

See

https://forums.moneysavingexpert.com/discussion/comment/79394659/#Comment_79394659

Tony_J

Thanks very much xylophone,
I've had a quick look at the link and will read through more carefully to understand the logic. 

As a matter of interest does anyone know if the state pension calculations provided are ever/rarely/sometimes/often inaccurate

Silvertabby

Tony_J said:

Thanks very much xylophone,
I've had a quick look at the link and will read through more carefully to understand the logic. 

As a matter of interest does anyone know if the state pension calculations provided are ever/rarely/sometimes/often inaccurate

I would say that it would be a statistical impossibility for all State pension calculations to be 100% correct 100% of the time.

But, thinking about it, (apart from the married women who didn't receive the right amount based on their husband's contributions, which is currently being addressed) I don't recall any posts on these boards from people who had been given the wrong pensions.

Even a case a couple of years ago, in which a man was given several KXs of arrears, to great hooha from the press, wasn't 'wrong'.  The chap had simply not claimed his pension for whatever reason.