Pre-1988 GMP fiasco

xylophone

From your previous comment on why the reference to HSG booklet am I to assume as I have been “transferred” (using the term carefully) to the Lloyds 2  these are the only “rules” I should be looking at. So RPI, max 5% for deferment, 2/3 spouse’s pension and RPI, max 5% escalation in payment. This is more generous than the HSG scheme. 

Have you actually been transferred into the new scheme?  The new scheme has subsumed the old?

That is to say, has there been   (for example) a Deed of Variation which adopted (for deferred members) the provisions of the Trust Deed and Rules of the Lloyds Scheme?

I did get a retirement quote at NRD in 2016 from the scheme administrator Equiniti at the time. The Scheme Pension was £1,548 pa and spouse’s pension was £1,032.09 pa. Paperwork from Equiniti did not mention of pre-88 GMP that this would be paid from SPA or the windows GMP component and no mention of escalation in payment at all.

That is rather odd. 

I am wondering whether it represents revaluation of excess only or perhaps revalued excess plus unrevalued GMP at DOL.





i was looking at this

https://expertpensions.co.uk/lets-be-frank-what-do-you-know-about-gmp-franking-by-douglas-watson/

For a member retiring at the scheme’s NRA but before GMP Age

Any member who retires at the scheme NRA, will at least receive their excess revalue to NRA plus their GMP at GMP age; however if there is any escalation in payment on the excess pension between retirement and GMP age, the scheme is perfectly able to frank these increases against the GMP revaluation.

The above aligns with Mike Floutier's (Barclays) position.

Another thing, I do not see that GMP step up has anything to do with the late retirement increases on excess that are said to be applicable in both  schemes.

We've been round the houses a few times now and really nothing more can be done until you have full clarification from WTW.

As things stand at the moment, it appears that you have been subject to full franking?

hyubh

Fernzy said:

xylophone said:

I should have said Scheme NRA. At one time it was quite common for this to be age 60  in occupational schemes for both men and women, notwithstanding the fact that SPA was later for men.

It was 60 in both schemes?

With regard to State Pension Age, for some years now this has not aligned with GMP age which remains at 60 (F) and 65 (M).

I did get a retirement quote at NRD in 2016 from the scheme administrator Equiniti at the time. The Scheme Pension was £1,548 pa and spouse’s pension was £1,032.09 pa. Paperwork from Equiniti did not mention of pre-88 GMP that this would be paid from SPA or the windows GMP component and no mention of escalation in payment at all. Scheme booklet is clear on the escalation. 

From your previous comment on why the reference to HSG booklet am I to assume as I have been “transferred” (using the term carefully) to the Lloyds 2  these are the only “rules” I should be looking at. So RPI, max 5% for deferment, 2/3 spouse’s pension and RPI, max 5% escalation in payment. This is more generous than the HSG scheme. 

Likely not - instead, the HSG scheme would have become a 'section' of the Lloyds scheme when the sponsoring employer was taken over, maintaining its own benefit structure within that. That said, gaining better terms retrospectively due to a scheme merger wouldn't in principle be impossible either - it's just relatively rare.

Fernzy

xylophone said:

That is rather odd. 

I did not think that the Equiniti quote admin to Lloyds at NRD was odd except for not mentioning the GMP due 5 yrs later at SPA 65, since NRD was age 60 and the GMP would be due at SPA age 65. The fact that they showed a commutation option would suggest that this is related to a scheme pension.

I am wondering whether it represents revaluation of excess only or perhaps revalued excess plus unrevalued GMP at DOL.

i was looking at this

https://expertpensions.co.uk/lets-be-frank-what-do-you-know-about-gmp-franking-by-douglas-watson/

Thanks for the link. I have read it but as I deferred beyond NRD and GMP SPA does not seem to apply to me.

We've been round the houses a few times now and really nothing more can be done until you have full clarification from WTW.

Agreed.

As things stand at the moment, it appears that you have been subject to full franking?

Looks like it but couched in this step up remark

Just had an acknowledgement from WTW stating that they are working on this and should be with me shortly.

Interestingly, despite asking explicitly for the Internal Dispute Resolution Process the Snr administrator sent me an internal complaints form which in turn refers to IDRP if dissatisfied! 

After 10 weeks waiting for my complaint we are way past using a complaints form. By the way when they upheld their Aug-23 quote they offered me £1k compensation!

Fernzy

Update: Finally heard back from WTW in late Aug-23 with the Trust Deed and Rules (TD&R), calculation basis and my details as I requested. Noticed that the TD&R had a table for commutation from age 60 to 65 with commutation factors and rules that says extrapolate for ages in between. I want to retire at age 67! Seems like they are interpreting that this is not possible as table ends at age 65. Surely it should mean refer to scheme actuary for a commutation factor for later age. Also noticed that their calculation form was for member retiring before NRD (age 60). I will be age 67. Still no explanation on why my scheme pension is not shown. Got a reply at he end of Sep-23 saying they still stand by their GMP only quote.

Now going to IDRP sent form to Trustees on 25-Sep-23.

xylophone

Got a reply at he end of Sep-23 saying they still stand by their GMP only quote.

And they have supplied the calculation and reasoning?

Are they saying that there was no requirement (Scheme Rules/statutory) to revalue the excess over GMP in deferment?

Or there was a scheme rule that required revaluation of the excess in deferment BUT that as your GMP revalued to age 65 was greater than your GMP revalued to age 60 plus excess revalued to age 60,  therefore the whole of your pension at age 65 became pre 88 GMP?

That as such, there can be no commutation to create a PCLS (because GMP must be paid as what is in effect an annuity - for example, a regular monthly payment)?

That there is no requirement for the scheme to pay any increases in payment on pre 88 GMP.

 That while there is a requirement for a widow to receive only  50% of the  late husband's GMP, in your scheme this is augmented?

OR are they saying that as an early leaver, anti franking legislation did not apply  and the whole of the excess was therefore subsumed into the revalued GMP?

You mention that there was a transfer option offered - what was it?

 

Fernzy

xylophone said:

Got a reply at he end of Sep-23 saying they still stand by their GMP only quote.

And they have supplied the calculation and reasoning?

Are they saying that there was no requirement (Scheme Rules/statutory) to revalue the excess over GMP in deferment?

Or there was a scheme rule that required revaluation of the excess in deferment BUT that as your GMP revalued to age 65 was greater than your GMP revalued to age 60 plus excess revalued to age 60,  therefore the whole of your pension at age 65 became pre 88 GMP?

That as such, there can be no commutation to create a PCLS (because GMP must be paid as what is in effect an annuity - for example, a regular monthly payment)?

That there is no requirement for the scheme to pay any increases in payment on pre 88 GMP.

 That while there is a requirement for a widow to receive only  50% of the  late husband's GMP, in your scheme this is augmented?

OR are they saying that as an early leaver, anti franking legislation did not apply  and the whole of the excess was therefore subsumed into the revalued GMP?

You mention that there was a transfer option offered - what was it?

 

The administrator gave no reasoning or explanations. I had requested this with references to scheme rules or legislation to be provided. They just sent me the scheme rules, my details and pro forma calculation sheet which is for an early retirement so would not apply to me. I pointed this out to no avail. 

I am still not understanding why the scheme pension may be subsumed by the GMP. Scheme contributions were part of my total compensation while the GMP was opting out of the state scheme when both the employer and employee paid reduced contributions. Taking away the scheme pension is like stealing part of my salary. 

No transfer value was provided except as an option which I did not request. 

As an aside, I contacted the Pensions Ombudsmen and discovered that the fast track service has a 10 months backlog to allocating cases!

xylophone

The administrator gave no reasoning or explanations.

This is wholly unsatisfactory.

Your post of 25 July from Moneyhelper

You should ask for an explanation in writing from the trustees of the scheme, via the scheme administrators for how the pension benefits were calculated including GMP shown in the figures given to you both in the retirement quote of 9 June 2022 and 1 August 2023, and you can ask if they can ask the 'scheme actuary' as an independent person to verify the calculations and that they are both in accordance with the Trust Deed and Rules in place at the time of leaving, and any subsequent changes in the rules and social security legislation.

Go back to WTW in writing with the above and also include the Equiniti quote at Scheme NRA.

Ypu might also like to include a copy of your statement of deferred benefits at DOL and of your statements up to 2010.

I did get a retirement quote at NRD in 2016 from the scheme administrator Equiniti at the time. The Scheme Pension was £1,548 

xylophone

Looking again at the Equiniti quote, is this the sum of your excess over GMP revalued  to Scheme NRA plus the unrevalued GMP?

See https://forums.moneysavingexpert.com/discussion/comment/63406494/#Comment_63406494

and note reference to "step up".

Fernzy

Just received the IDRP Stage 1 decision which is to not uphold my complaint.

Reason given: because you are taking late retirement, pensions legislation does not require an anti-franking test to be carried out. Instead, pension scheme trustees must be satisfied that members receive fair value when anti-franking does not apply to them and the Trustee takes advice from the Scheme's actuarial advisers to make sure that this requirement for fair value is satisfied.

This does not make any sense to me at all. All my generous defined benefits taken away at a stroke. I might add that the DB scheme was part of my total compensation. All recent legislation has been to protect scheme pensions and to equalise benefits for gender differences.

As a lay person I would have thought that late retirement will give a higher benefits level as the fund will have less time to pay the annuity. So how is franking a scheme pension providing fair value to the scheme member as decided by the Trustees.

I am at my wits end. I would just like my defined benefits as set out in the pensions booklet. Do I have a case? If so, can anyone recommend where I can get paid advice.

Marcon

Fernzy said:

Just received the IDRP Stage 1 decision which is to not uphold my complaint.

Reason given: because you are taking late retirement, pensions legislation does not require an anti-franking test to be carried out. Instead, pension scheme trustees must be satisfied that members receive fair value when anti-franking does not apply to them and the Trustee takes advice from the Scheme's actuarial advisers to make sure that this requirement for fair value is satisfied.

This does not make any sense to me at all. All my generous defined benefits taken away at a stroke. I might add that the DB scheme was part of my total compensation. All recent legislation has been to protect scheme pensions and to equalise benefits for gender differences.

As a lay person I would have thought that late retirement will give a higher benefits level as the fund will have less time to pay the annuity. So how is franking a scheme pension providing fair value to the scheme member as decided by the Trustees.

I am at my wits end. I would just like my defined benefits as set out in the pensions booklet. Do I have a case? If so, can anyone recommend where I can get paid advice.

Why do you need paid advice? Once you've completed the IDRP you are entitled to take your case to the Pensions Ombudsman. It won't cost you anything and they will assess your case on its merits (not your ability to argue your case with paid assistance).