GMP franking on retirement Pre-GMP Age

Minette999

Well I have had a response and I am still scratching my head. According to Barclays, the calculation of my benefits is correct and is allowed by the scheme and law (without quoting where this is stated). So the calculations for a woman are:

Test 1 GMP at date of leaving plus scheme excess (RPI max 5%) (no revalued gmp as this is allowed to be 'offset' apparently) = £x

Test 2 GMP at date of leaving plus revalued GMP plus statutory excess (part of which is CPI max 3%) = £y.

The largest figure is the pension to be paid.

Clearly Test 2 will always be a greater figure overall because revalued GMP can be offset in Test 1 but not in Test 2 (note offset, not  franked as that is a technical term not to be used when looking at scheme excess, apparently).

So Barclays say they are right but still without quoting where this is stated. I am not clear if it is to do with short service (but the Pension Schemes Act 1993 says there should be no discrimination between long and short service benefits) as that is mentioned a few times in their response. 

They also state that despite all the communications to me over the last 24 years  guaranteeing the excess increases RPI max 5% and showing GMP plus excess pension equals my overall pension, I should not have 'assumed ' there was no interaction between the 2 pensions (even though on Test 2, the formula is GMP revalued plus excess!). Barclays have said 'I can understand why you have formed the impression you would be entitled to two sets of increases without any form of offset between them....but I do not agree that the booklet has misled you'. (I find that quite an interesting admission).

I have been offered £1000 in full and final settlement of Towers Watson's useless communications and advice that their offer is ' in line with what the Ombudsman would offer'. They appear to be alluding to the decision in Ainsworth. I think my line of attack will firstly be clarifying precisely where it is written that this offset in Test 1 is allowed and looking at that in detail. 

If it appears they can, I will look at misrepresentation, they accept not having told me about the offset, relying on the Ainsworth defence of 'you can't cover everything '. I would suggest that making no reference to this offset at all in a booklet of 12 pages of large print of which 1 page was dedicated to a fulsome explanation of what happens in the scenario of a man aged 65, is simply not acceptable and amounts to discrimination. 

I know that the Ombudsman sees no loss if through misrepresentation a higher pension is expected  but not actually due, as rescission means you are put back to the position you would have been without the misrepresentation (ie the lower disputed pension amount,  therefore no loss). However,  this does not take into account the pension freedoms of transferring my pension out, taking it earlier etc. I only waited until NRD to ensure my excess pension would not be franked/offset and I can evidence this.

I will also look at whether there is discrimination between male and female at 60. My full scheme excess pension will never be paid (as the revalued GMP has essentially been deducted from this amount) and I am receiving the statutory excess which is lower.  A man aged 60 will receive the full scheme excess as the revalued element of GMP is not in either Test 1 or Test 2's calculation so a man is likely to receive the scheme excess.  Whilst GMP's have been equalised, the treatment of the excess seems to be unfair.


I have 6 months to escalate the complaint to the next stage. I think I am not likely to win, but I do feel the admission of the inadequacy of their literature has impacted me financially,  even if this offsetting is allowed.

This is a brief précis of their very very long response which contain factual errors and ignores many of my points.

xylophone

Thank you for the update.

I think that you are within your rights to request chapter and verse on Scheme Rules and Law.

I don't understand why there cannot be an example in the scheme guide of revaluation in deferment and escalation in payment where a

female  has pre and post 97 service.

Do keep the thread updated.