Pension very depleted

molerat

steliz said:

No, she never gets any communication from them other than the annual statement. The pension is called The First Bus Pension scheme.

I have checked the state pension figures and her pension will be less as she hasn't contributed enough years, I'm not sure how that's relevant.

I can't see any reference to COPE, what does it mean?

Not actually relevant to the question of the transfer value but very relevant to her overall income in retirement.

COPE is the contracted out deduction from the new state pension starting amount at 2016, it will be shown in a click link in the forecast under "You've been in a contracted-out pension scheme"

MallyGirl

Pat38493 said:

Ok but a 7.5K CETV for a pension that pays £1100pa doesn't make sense either does it?

OP where did the 7.5K number in your first post come from?  

as a guide - I just looked up my only final salary pension. It will pay £3552pa and the current transfer value is £60,800. This is down from a peak transfer value of £98k

xylophone

I have checked the state pension figures and her pension will be less as she hasn't contributed enough years, I'm not sure how that's relevant.

It could be relevant to your retirement planning?

Does your wife plan to make voluntary contributions to improve her state pension?

If so, what is the estimate to 5/4/22 (23)?

How many pre 2016 qualifying years?

And post 2016 qualifying years?

COPE shown?

In which tax year will she qualify for SP?

With regard to the First Bus pension

On 5th April 2018, the First UK Bus Pension Scheme Defined Benefit Section (Silver and Gold levels) closed to future accrual.

https://www.firstgrouppensions.co.uk/bus-pension-scheme#bronze

Scheme closure will not affect the value of benefits you have already built up in this Scheme; your benefits will remain preserved in the Scheme, with increases broadly in line with inflation until you start to receive your benefits. You can get further information about your pension accrued up until 5 April 2018 by emailing firstpensions.uk@mercer.com or calling 0370 850 0712.

Is your wife sent an annual statement of deferred benefits? If so, presumably annually post 2011 when she left?

Was she a member of the scheme pre 6/4/97?

What was Normal Scheme Pension Age?

Is a Pension Commencement Lump Sum offered as an option when benefits are taken?

How does the pension increase once in payment?

steliz

xylophone said:

I have checked the state pension figures and her pension will be less as she hasn't contributed enough years, I'm not sure how that's relevant.

It could be relevant to your retirement planning?

Does your wife plan to make voluntary contributions to improve her state pension?

If so, what is the estimate to 5/4/22 (23)?

How many pre 2016 qualifying years?

And post 2016 qualifying years?

COPE shown?

In which tax year will she qualify for SP?

With regard to the First Bus pension

On 5th April 2018, the First UK Bus Pension Scheme Defined Benefit Section (Silver and Gold levels) closed to future accrual.

https://www.firstgrouppensions.co.uk/bus-pension-scheme#bronze

Scheme closure will not affect the value of benefits you have already built up in this Scheme; your benefits will remain preserved in the Scheme, with increases broadly in line with inflation until you start to receive your benefits. You can get further information about your pension accrued up until 5 April 2018 by emailing firstpensions.uk@mercer.com or calling 0370 850 0712.

Is your wife sent an annual statement of deferred benefits? If so, presumably annually post 2011 when she left?

Was she a member of the scheme pre 6/4/97?

What was Normal Scheme Pension Age?

Is a Pension Commencement Lump Sum offered as an option when benefits are taken?

How does the pension increase once in payment?

Crikey! It's true, no one expects the Spanish Inquisition. She paid contributions up until 2019, if you could give me a little context around why 2016 is important that would be great, thanks.

Thanks for all the help, we have a better understanding of the situation now.

molerat

steliz said:

Crikey! It's true, no one expects the Spanish Inquisition. She paid contributions up until 2019, if you could give me a little context around why 2016 is important that would be great, thanks.

Thanks for all the help, we have a better understanding of the situation now.

2016 is the changeover from the old to new state pension.  At that point a line was drawn and a calculation was carried out giving you the better of the old or new systems.  it is very important to working out state pension entitlement and what can be done to improve it.

xylophone

if you could give me a little context around why 2016 is important that would be great, thanks.

See

https://forums.moneysavingexpert.com/discussion/comment/79949706#Comment_79949706

Pat38493

OP - regarding the first pension you mentioned, suggest you post some more details about what it says on the pension estimates - does it actually say "final salary" or "deferred benefit" or suchlike.  Who is the pension provider, type of pension, and the precise wording you are seeing on the £7500 number, plus any information that it says about increases once in payment.

Also how old is your wife and what is the pension age at which the pension can be taken?  Are you using the same age every time when you ask for the values?

The £7500 number doesn't seem like it could be correct if the pension would pay out £1100 per year for life, especially if it's going to increase with inflation each year.  £7500 is then way too low.

If the £7500 is a number that is automatically generated by a website as a transfer value, it is probably a (completely wrong) rough estimate and you would have to request an exact CETV figure from the pension provider.  

On top of this, I believe that if it is indeed final salary, and the true figure turns out to be more than 30K, you would then have to seek (expensive) financial advice in order to get the transfer value out of it.

The other possibility is that when you were told it was a final salary pension this was actually incorrect and it's a DC pension, but even then, a drop of from 31K to 7K between early 2022 and now is a massive drop (and against the general run of the markets during that period).

LHW99

Also if it is a final salary pension it woul likely pay a percentage of the income to you if you survived her, often 50%.

Bimbly

Perhaps the £7,500 is the pension commencement lump sum in addition to the yearly final salary pension?

But the OP would have to say for sure.

OP, many such schemes offer a lump sum as well as a yearly pension. Most offer options such as take a lump sum and get a lower annual pension or don't take a lump sum and get a higher annual pension. Other schemes include a minimum or maximum lump sum in their options.

Havent_got_a_clue

Sorry to jump in on this thread but the same thing has happened to my husband. 

He is a deferred member of a closed final salary scheme. We have checked the forecasts on their pension website and over the last 2 years the quotes have not changed. We were not surprised at this because the NRA is 60 and he is 62. He is looking to retire in the next couple of years and the benefits of deferring after 60 were favourable at approx 6% per year.
We have checked again in the last couple of weeks and these figures have dropped by nearly £3000 less for the lump sum and approx £400 pa for the pension payment.
The surviving spouse pension, however, has increased as has the estimate for taking the pension without a lump sum.

we are also concerned that this could change again and are advised  by the scheme administrators that this may well happen. 

It does not help when trying to plan but is also alarming that this is allowed.
We have also been told that this is because of interest rates? How can this be the case with a defined benefit scheme? 

I’ve read that DB schemes cannot change the rules without consultation. 

Is his situation different because he is no longer under the normal rules as he is past NRA? And therefore do a new set of flexible rules apply?

Its impossible for a layman to calculate the revaluation from the figure quoted at the closure of the scheme as he has various different factors such as GMP  and pre and post 1990 (forgive me if I have the year 1990 wrong I am saying this from memory) 

I can post this as a new thread but thought it was relevant to the OPs query and also another similar query that I have read recently.

Any advice would be really appreciated.