Final salary scheme - benefit deductions for contracted out years

the-chauffeur_2

Your state pension forecast should show values - how much you have currently accrued and the maximum you can get, and your COPE value (if any) , as well as the number of NI years you have, how many more years you need to contribute and how many years you have available to you going forward in which to do so

Forecast shows:

You can get your State Pension on ******** 203*

Your forecast is £203.85 a week, £886.38 a month, £10,636.60 a year

Your forecast

- is not a guarantee and is based on the current law
- is based on your National Insurance record up to 5 April 2023
- does not include any increase due to inflation

£203.86 is the most you can get.  You cannot improve your forecast any more. 

If you’re working you may still need to pay National Insurance contributions until ******* 203* as they fund other state benefits and the NHS.

You have 3* years of full contributions.
You have 1* years to contribute before 203*.

Contracted Out Pension Equivalent

Your COPE estimate is £45.88 a week

This will not affect your State Pension forecast. The COPE amount is paid as part of your other pension schemes, not by the government.

In most cases the private pension scheme you were contracted out to:

- will include an amount equal to the COPE amount
- may not individually identify the COPE amount

xylophone

Right then.

With regard to your State Pension, it appears that you have already achieved a full New State Pension - you cannot improve it by contributions or credits - it will revalue up to and beyond SPA by (currently) the triple lock.

While you are earning the relevant amount and are under SPA, you will continue to pay NI.

If you are interested in how your starting amount for NSP was calculated, on 6/4/16, two calculations were done

Old State Pension System

NI qualifying years/30 x Full Basic State Pension of £119.30 + (SERPS - Deduction for Contracting Out).

New State Pension System

(NI qualifying years/35  x Full NSP of £155.65) - Contracted Out Pension Equivalent.

Your "starting amount" was the higher of the two.

You would have been in one of three positions.

(a) SA equal to NSP

(b) SA more than NSP

(c) SA less than NSP.

You were not in (b) because your forecast is for the  full NSP, no more no less.

Therefore either it was equal or less.

If less, your contributions from 6/4/16 onwards have improved it up to (but not in excess of) a full NSP.

You should note that the COPE was used once only in calculating your SA.

You should also note (see https://assets.publishing.service.gov.uk/media/618118c8e90e07197e1665ea/contracting-out-and-the-cope-amount-in-the-online-statement-service.pdf)

If you were a member of 2 or more contracted out schemes, the COPE amount shown is based on all your schemes and covers all the years you were contracted out. 

With regard to the DB Pension Scheme, it would seem that you joined it post 6/4/88 but pre 5/4/1997,

Therefore you should have a statement of deferred benefits on leaving showing your GMP and excess.

See 

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

You should note that the above is the statutory position - your scheme may use a different basis.

The State Pension Deduction is as explained in my previous.

It seems that you are expecting to bring your deferred pension into payment at Scheme Pension Age of 60.

Without reference to your Scheme Booklet. we cannot comment on how this will be calculated.

However, (bearing in mind that GMP age for a male is age 65), you might be interested in seeing how Barclays treated a person in this position - not all schemes do it this way.

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

the-chauffeur_2

Wowsers.  First, thanks very much for taking the time to put that together.  Would give you more thumbs up on that answer if I could.

All of the stuff in the first half is pretty much as I was expecting/hoping, at least with my limited understanding.  So that's a relief.  TBH I'm not all that concerned about how it's all calculated if I'm at the limit and there's nothing more I can do.  If there was a shortfall, it would be a different story.

Second, dear God that stuff in the linked thread/guides is complicated - at least it is to a bear of very small brain (probs not so much if you are/have been conkers deep in it). 

One of the very few things I can be sure of right now is that according to the latest scheme booklet, the NRD hasn't changed since my time there - it's still 60.  At some point in the very, very distant past (possibly when I left the firm) I had a bit of paper that made reference to the benefit being about £1,000 a year and until very recently, I had assumed that would be all I was entitled to - so I never expected much and TBH I still don't.  From a planning perspective, I'll be treating anything I get out of this arrangement as a bonus but it'll be useful to know because of potential tax implications.  

I guess the best/only advice at this point is to wait and see what I get from the provider in response to my request for numbers.  I'm very much hoping the numbers and information they send over will clarify the bits you've pointed out are scheme/provider dependent.  But even if they're not, this thread has put me in a better place to articulate what I need them to clarify.