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Barclays DB early retirement factors

Has anybody ever managed to get any details from WTW on early retirement factors for the Barclays 1964 scheme? Myself (54 years old) and my wife (55) both have deferred DB pensions. My wife has just obtained an early retirement quote and having asked for details on the reduction was quoted as follows “ I can confirm that an early retirement factor has been applied at age 55, the trustees do not allow us to release the factors and  we cannot quote retirement benefits more than 6 months in advance.

If you wish to retire at age 60, which is your normal retirement age, no factors will be applied to your benefits” 

Many thanks 

Comments

  • xylophone
    xylophone Posts: 45,426 Forumite
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    DT2001 is ex Barclays and took his 1964 Scheme pension at age 51.


    https://forums.moneysavingexpert.com/discussion/comment/80013429/#Comment_80013429


    I took my pension early (2011) at which time the administration was dealt with in house. The quotes I received related to specific dates but did not show the actuarial reduction.


  • xylophone said:
    DT2001 is ex Barclays and took his 1964 Scheme pension at age 51.


    https://forums.moneysavingexpert.com/discussion/comment/80013429/#Comment_80013429


    I took my pension early (2011) at which time the administration was dealt with in house. The quotes I received related to specific dates but did not show the actuarial reduction.


    Thanks. I remember that thread now. Looks like I’ll just stick with our latest pension figures from the website and then estimate based on some inflation assumptions for next 5 years or so. 
  • Pat38493
    Pat38493 Posts: 3,122 Forumite
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    edited 14 November 2023 at 9:56AM
    Neilb1969 said:
    Has anybody ever managed to get any details from WTW on early retirement factors for the Barclays 1964 scheme? Myself (54 years old) and my wife (55) both have deferred DB pensions. My wife has just obtained an early retirement quote and having asked for details on the reduction was quoted as follows “ I can confirm that an early retirement factor has been applied at age 55, the trustees do not allow us to release the factors and  we cannot quote retirement benefits more than 6 months in advance.

    If you wish to retire at age 60, which is your normal retirement age, no factors will be applied to your benefits” 

    Many thanks 

    I cannot really understand what valid reason the trustees could have for wanting to keep the early retirement factors secret.  In fact, I was told on another thread that the rules around DB pensions are subject to mandatory disclosure and have to be released to members or their financial adviser on request, and I would assume this includes the early retirement factors.

    Possible - if these scheme does not normally allow early retirement at all, and it's only allowed on trustee discretion, perhaps they could justify it that way, but even that is a stretch in my mind - after all, what if there was a dispute about whether the amount awarded was correct?  Ultimately this could be legally challenged and they would have to show their workings.

    If it's important to you to know this, I would suggest that you write directly to the trustees asking if this statement is correct and if so, can they explain in detail what the justification is for this.

    Maybe the trustees should be reminded that their duty is to the members and not the bank that set up the scheme.  As far as I know, Trustee means that they are holding the money in trust for the members, and not that they are to be considered beyond reproach and should be trusted at all times.   Even more so given the number of threads we see here about pensions being awarded with the wrong amount and it being realized months or years later, so it's not even as if they can claim that they never make mistakes.

    As you can tell I am not a fan of this idea that there should be a veil of secrecy around how DB pension amounts are calculated, and I'm pretty sure it's not in the member's best interests.
  • Tommyjw
    Tommyjw Posts: 220 Forumite
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    edited 14 November 2023 at 3:00PM


    https://www.legislation.gov.uk/uksi/2013/2734/schedule/5/made

    PART 2Information for active and deferred members

    4.  The date on which the member’s pensionable service started.

    5.  A summary of the method for calculating the member’s benefits and any survivors’ benefits.

    6.  Details of how any deduction from benefits is calculated.


    I agree this is awful practice and unsure why they would even do it. Be interesting to see what a formal complaint  pointing to the above does and, if necessary, how the Ombudsman trates the above disclosure requirement and how literal they take it. It could be read, if you really wanted it to be, fairly vague and is a ERF a "Deduction" and perhaps it means something else?. I'd like to see how they would worm their way around it.

    For completeness, i'd suggest they can get away with no providing a list of factors for different ages, not prodividng a factor for years from now, etc, but for a current quotation already calculated and reduced i don't see how the above disclosure requirement doesnt apply to have to tell you what that is.
  • xylophone
    xylophone Posts: 45,426 Forumite
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    Details of how any deduction from benefits is calculated.

    The scheme rules may simply refer to the pension being reduced by a figure calculated in accordance with actuarial advice...

  • Tommyjw
    Tommyjw Posts: 220 Forumite
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    edited 14 November 2023 at 5:21PM
    xylophone said:
    Details of how any deduction from benefits is calculated.

    The scheme rules may simply refer to the pension being reduced by a figure calculated in accordance with actuarial advice...

    I would argue for any client I have should this come up that details of how figure X is calculated is based off all items involved, revaluation, factors etc. 

    Because I'd argue that how that factor is calculated has already been established as not something a member is entitled to. They can't ask for the in depth actuarial calculations of how they came to and agreed to a 5% per year reduction for example, therefore if the legislation states a member must know about any deduction, the only item they can ask for is the % itself.

    But as mentioned I think is is where the vagueness could work in their favour and from time to time I like to look at Ombudsman decisions and I can't remember this coming up for them to pose their view if it got that far.
  • Pat38493
    Pat38493 Posts: 3,122 Forumite
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    Tommyjw said:

    Because I'd argue that how that factor is calculated has already been established as not something a member is entitled to. They can't ask for the in depth actuarial calculations of how they came to and agreed to a 5% per year reduction for example, 
    Why not?  I mean fundamentally, DB pension schemes are not in competition with other DB schemes, so I’m not too clear who would be harmed by members having full visibility on all the calculations involved?
  • Tommyjw
    Tommyjw Posts: 220 Forumite
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    edited 14 November 2023 at 5:31PM
    Pat38493 said:
    Tommyjw said:

    Because I'd argue that how that factor is calculated has already been established as not something a member is entitled to. They can't ask for the in depth actuarial calculations of how they came to and agreed to a 5% per year reduction for example, 
    Why not?  I mean fundamentally, DB pension schemes are not in competition with other DB schemes, so I’m not too clear who would be harmed by members having full visibility on all the calculations involved?
    Who would benefit ?

    Your reduction is 5% each year. Great. That helps you make decisions abd such.

    Why do you need to see the formula and calculations involving mortality, life expectancy, gilt yields, assumed interest rates, scheme funding levels, etc involved ? It creates work for those who need to provide it (possibly the time of actuaries who will charge to the Scheme their time cost for doing so at much delight), and provides precisely 0 benefit to the end user who receives it because it will mean nothing to 99.99% of people
  • Pat38493
    Pat38493 Posts: 3,122 Forumite
    Tenth Anniversary 1,000 Posts Name Dropper Combo Breaker
    Tommyjw said:
    Pat38493 said:
    Tommyjw said:

    Because I'd argue that how that factor is calculated has already been established as not something a member is entitled to. They can't ask for the in depth actuarial calculations of how they came to and agreed to a 5% per year reduction for example, 
    Why not?  I mean fundamentally, DB pension schemes are not in competition with other DB schemes, so I’m not too clear who would be harmed by members having full visibility on all the calculations involved?
    Who would benefit ?

    Your reduction is 5% each year. Great. That helps you make decisions abd such.

    Why do you need to see the formula and calculations involving mortality, life expectancy, gilt yields, assumed interest rates, scheme funding levels, etc involved ? It creates work for those who need to provide it (possibly the time of actuaries who will charge to the Scheme their time cost for doing so at much delight), and provides precisely 0 benefit to the end user who receives it because it will mean nothing to 99.99% of people
    So the argument is that it would be a waste of the actuaries time to give members this information, even though the information exists anyway because they must have had to create it in order to come up with the results.

    The benefit might be that, theoretically at least, a member could pay an independent actuary to check the numbers.  We often see posts here from people who’ve been told that their DB pension was wrongly calculated and the pension scheme only realised it a long time later - maybe if people had access to the calculations, even if most members weren’t interested, one or other member might notice if something was wrong.

    Nevertheless in this case the OP is saying that the scheme won’t even give the percentages.  This seems unusual because we often see posts on these boards where people clearly have been given the percentage reduction per year early (albeit that this could change from time to time).
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