COPE value vs GMP?

GenX0212

Hi 

I have a question re COPE and GMP that I am hoping someone can help with.

I have 37 full years towards my State Pension due for payment in 2036:

• "£203.85 is the most you can get
• "You cannot improve your forecast anymore"
• "You've been in a contracted-out pension scheme"
• "Your COPE estimate is £50.17 a week"

I have a deferred DB pension with a Normal Retirement Date of 2032 and looking at a recent 2023 statement it says I have a current "Post 88 Gmp of £1,313.79".

I joined the DB pension in 1990, it was closed to further accruals in June 2009 and I became a Deferred Member.

We were then enrolled in a separate DC scheme which I was a member of until 2012, the DC pension has since been migrated by the employer to an Aviva personal account.

In 2014 I started a new DC pension with my current company.

The GMP of £1,313.79 quoted on the DB statement is approximately half what is quoted for the COPE forecast of £50.17 a week (£2,608.84 per year) and I am assuming that the rest of the COPE comes from the DC scheme(s) up until 2016. 

Does it seem right that only 6 years of DC membership would have the same NI opt-out value as the 19 years of DB membership?

Thanks.

Marcon

GenX0212 said:

Hi 

I have a question re COPE and GMP that I am hoping someone can help with.

I have 37 full years towards my State Pension due for payment in 2036:

• "£203.85 is the most you can get
• "You cannot improve your forecast anymore"
• "You've been in a contracted-out pension scheme"
• "Your COPE estimate is £50.17 a week"

I have a deferred DB pension with a Normal Retirement Date of 2032 and looking at a recent 2023 statement it says I have a current "Post 88 Gmp of £1,313.79".

I joined the DB pension in 1990, it was closed to further accruals in June 2009 and I became a Deferred Member.

We were then enrolled in a separate DC scheme which I was a member of until 2012, the DC pension has since been migrated by the employer to an Aviva personal account.

In 2014 I started a new DC pension with my current company.

The GMP of £1,313.79 quoted on the DB statement is approximately half what is quoted for the COPE forecast of £50.17 a week (£2,608.84 per year) and I am assuming that the rest of the COPE comes from the DC scheme(s) up until 2016. 

Does it seem right that only 6 years of DC membership would have the same NI opt-out value as the 19 years of DB membership?

Thanks.

COPE figures are rarely 'equal' to anything!

GMP build up ceased in 1997 and if the DB scheme continued to contract out (which is virtually certain), it would have been on something called the 'reference test' basis, which wouldn't show any separate, explicit figure for the period 1997 to 2009 - but it is still taken into account for COPE purposes.

DB pensions revalue in deferment, so all the deferred pension, including the GMP, will increase between now and the time you come to draw your benefits.

Was your DC scheme contracted out? Many weren't, but given you had 12 years of 'reference test' membership of the DB scheme, that could certainly explain the COPE figure.

xylophone

I am assuming that the rest of the COPE comes from the DC scheme(s) up until 2016. 

It can only be related to a DC scheme if the DC scheme was contracted out.

https://techzone.abrdn.com/public/pensions/Tech-guide-contracting-out#:~:text=Contracting out was a method,SERPS) for particular tax years.

Contracting out on a DC basis ended in 2012 and on a DB basis in 2016.

With regard to GMP/COPE and the New State Pension see

https://assets.publishing.service.gov.uk/media/5a7c2e95e5274a25a9140fdc/single-tier-valuation-contracting-out.pdf

Your COPE was used once only in calculating your starting amount for NSP at 6/4/16.

In 2009, were you given a statement of deferred benefits showing post 88 GMP and excess?

Your GMP and excess increase in deferment - the GMP increases differently from the excess. Below is a summary of the statutory basis but you should check the rules of your particular scheme.

https://www.barnett-waddingham.co.uk/comment-insight/blog/revaluation-for-early-leavers/

You would have accrued GMP up to 1997 after which (up to Date of Leaving the Scheme in 2009) you would have accrued S9  (2B) rights under the reference scheme test - see link above and

https://techzone.abrdn.com/public/pensions/Tech-guide-section-92b-rights

if you want a detailed explanation.