Boots Pension defined benefit

Marcon

Hoenir said:

bjorn_toby_wilde said:

I have my scheme booklet and it states “Preserved pensions in the Boots Scheme are guaranteed to increase by 5% a year (or the annual increase in the Retail Price Index, if less)”

That's a common provision for older DB pension schemes that were ravaged by inflation in the 70's. Capping the liability. 

It's long been a statutory provision for all final salary schemes.  Limited Price Indexation was introduced for final salary scheme leavers who left on or after 1 January 1991, revaluing the whole of their pension (except for the GMP, which has its own different rules) in line with RPI up to 5%. The 5% cap was reduced to 2.5% for pensions built up from 6 April 2009. 

RPI was replaced by CPI from 6 April 2011, unless the rules of an individual scheme specified otherwise.

Schemes can offer better rates of revaluation but can't go below the statutory requirement. 

Not surprising the average member gets hopelessly confused...

Jaeger1000

I do not understand why Boots Trustees did not consult with members to advise that they were removing the offer to retire at 60 years old before it was removed. Receiving an envelope with a printed leaflet through the door, is not looking after the members.

it must be sole destroying if you have been planning your retirement for the last 4 years to find that you loose it over night and you will have to work another 6 years. And add salt to the wound, if it is true that the have devalued the pension funds because of the 5 year difference. Why has the trustees allowed this, they are their for the members.

Trustees and employers should communicate clearly with members regarding benefits involving discretionary powers, to avoid damaging the relationship and potentially leading to future complaints.

bjorn_toby_wilde

I guess if they had consulted they would have been overwhelmed by the number of people suddenly taking early retirement.

A lot will depend on how much reduction is made for taking the pension early.  One of my other preserved pensions has reductions in the region of 5% per year and I don't plan to touch it until I'm 65 or at least close to.  The same pension only had reductions of 2.5% per year if retirement was from active service.

I don't know what the Boots reductions for early retirement are now as my letter didn't include them, but if they're not too bad then it still might be worth taking.

Marcon

Jaeger1000 said:

I do not understand why Boots Trustees did not consult with members to advise that they were removing the offer to retire at 60 years old before it was removed. Receiving an envelope with a printed leaflet through the door, is not looking after the members.

it must be sole destroying if you have been planning your retirement for the last 4 years to find that you loose it over night and you will have to work another 6 years. And add salt to the wound, if it is true that the have devalued the pension funds because of the 5 year difference. Why has the trustees allowed this, they are their for the members.

Trustees and employers should communicate clearly with members regarding benefits involving discretionary powers, to avoid damaging the relationship and potentially leading to future complaints.

Wouldn't it be better to raise these points direct with the trustees, not least to ensure you have the facts correct? 

xylophone

How does the Boots pension deal with L&G affect my early retirement plan? Steve Webb replies

https://www.thisismoney.co.uk/money/pensions/article-12868055/Boots-pension-deal-Legal-General-early-retirement-plan.html

ScoobyZ

Look like there is a complaint ongoing about this change.

https://www.the-pda.org/pda-members-in-the-boots-pension-scheme-to-complain-about-the-removal-of-an-unreduced-pension-option/

Marcon

ScoobyZ said:

Look like there is a complaint ongoing about this change.

https://www.the-pda.org/pda-members-in-the-boots-pension-scheme-to-complain-about-the-removal-of-an-unreduced-pension-option/

Unlikely to get anywhere (although I have considerable sympathy for the members affected), given that there will be 'rules override....' warnings plastered all over the place.

xylophone

Look like there is a complaint ongoing about this change.

Unlikely to get anywhere (although I have considerable sympathy for the members affected), given that there will be 'rules override....' warnings plastered all over the place.

The situation is discussed in Money Mail link in my post above.

Paul Moloney, PDA Union national officer explains why members may want to do this.

“We have considered, with our advisors, the claim by the trustees of the scheme that the option to take an unreduced pension from 60 was discretionary and not a right and believe there is insufficient evidence to fully support this claim. We are therefore questioning whether this option should have been secured as part of the buy in and not ended with immediate effect.

Instead, we believe benefit statements issued to members, at the very least are contradictory, and clearly state that a full pension will be payable from a member’s 60th birthday, with no reference to this benefit being discretionary and therefore subject to a regular review by the trustees. Instead, the benefit statements give the impression that an unreduced pension from 60 is a right with no indication that retirement plans should not be based on the benefit statements.

 I seems that  Scheme Rules/statutory provisions will trump any information in Scheme Guide/pension estimates, even if eg the Pensions Ombudsman agrees that the Guide/estimate did not give the full facts (so could be interpreted as misleading).

I say this because of a case from years back where a certain Mr Ainsworth made a complaint against Barclays

https://www.pensions-ombudsman.org.uk/decision/2008/s00105/barclays-bank-uk-retirement-fund-s00105