Old British Steel Pension - Advice Needed

karenmitch

I worked for a company in the 1980s and joined the pension scheme which was part of the old British Steel Scheme. I have traced the company acting as trustees and they have now written to me saying that it appears that I was a deferred member of the scheme and have determined that I was excluded from a merger as a result of an administrative error.   

They say they this scheme is now being wound up and they cannot secure any benefits but instead they are going to ask the Scheme administrator to provide me with a transfer value quotation to transfer the full value of my benefit entitlement to another registered pension arrangement of my choice and then I should be able to take my benefits. 

However, they are asking me to sign a Member declaration form stating various things including that it is no longer possible to secure a benefit entitlement for me or pay any benefits to be directly from the Scheme given that it is winding up. They say the Scheme administrator will contact me to set up a member record in the Scheme and prepare a transfer value quotation. 

Should I go ahead and sign this or should I seek advice first? 

 

Marcon

karenmitch said:

I worked for a company in the 1980s and joined the pension scheme which was part of the old British Steel Scheme. I have traced the company acting as trustees and they have now written to me saying that it appears that I was a deferred member of the scheme and have determined that I was excluded from a merger as a result of an administrative error.   

They say they this scheme is now being wound up and they cannot secure any benefits but instead they are going to ask the Scheme administrator to provide me with a transfer value quotation to transfer the full value of my benefit entitlement to another registered pension arrangement of my choice and then I should be able to take my benefits. 

However, they are asking me to sign a Member declaration form stating various things including that it is no longer possible to secure a benefit entitlement for me or pay any benefits to be directly from the Scheme given that it is winding up. They say the Scheme administrator will contact me to set up a member record in the Scheme and prepare a transfer value quotation. 

Should I go ahead and sign this or should I seek advice first? 

 

Errors happen. The starting point is to try and put you back, as far as possible, in the position you would have been in had the error not occurred in the first place.

Presumably the scheme has been 'bought out' with an insurer and the insurer has refused to accept any further funds in respect of members who weren't included in the buy out.

Much will depend on the transfer value offered to you. Before signing anything, I'd be inclined to go back and ask if the transfer value would secure an annuity for you equal to the benefits which would have been paid under the scheme had the error not occurred - or ask if they'd be willing to secure such an annuity on your behalf (they could do so with an insurer - not necessarily the same one as that used for the buy out). If you are not yet at the age where you would draw your pension from the scheme, it would be a 'deferred annuity' - one payable when you do reach that age.

karenmitch

Thank you for your help it is much appreciated.

They said

"Please note that the Scheme can no longer provide you with an annual pension. This is because the Scheme has secured benefits for members with an insurance company and is now being wound up. Unfortunately, it is no longer possible to secure benefits for you with the insurance company in the same way. However, we can calculate, and pay, a cash equivalent transfer value which would involve the Scheme actuary converting your pension benefits into a cash sum (of an equivalent value) and transferring this to an alternative registered pension arrangement of your choice"

However, they said they can't give me an estimate of what the transfer value would be as this would have to be a calculation that will need to be carried out by the Scheme actuary, but this can't happen until I sign the declaration form, so I am unsure what to do.

xylophone

Were you a member of the Standard Section?

 If so, when you left this employment and became a deferred member of the Pension Scheme, were you given ( and if so, do you still have) a statement of deferred benefits showing

Pre 88 GMP

Post 88 GMP

Excess?

 From the booklet issued in 2011.

https://www.bspensions.com/standard-section-s5/deferred-pensioners-s29/how-is-my-pension-calculated--s105.html

Marcon

karenmitch said:

Thank you for your help it is much appreciated.

They said

"Please note that the Scheme can no longer provide you with an annual pension. This is because the Scheme has secured benefits for members with an insurance company and is now being wound up. Unfortunately, it is no longer possible to secure benefits for you with the insurance company in the same way. However, we can calculate, and pay, a cash equivalent transfer value which would involve the Scheme actuary converting your pension benefits into a cash sum (of an equivalent value) and transferring this to an alternative registered pension arrangement of your choice"

However, they said they can't give me an estimate of what the transfer value would be as this would have to be a calculation that will need to be carried out by the Scheme actuary, but this can't happen until I sign the declaration form, so I am unsure what to do.

Thanks for confirming what I thought would be the case.

As I've already suggested, before signing anything go back and ask them to explain why they can't buy you an annuity (deferred or immediate, depending on your age) with another insurer. That is the only way to ensure you get the benefits promised by the scheme. There is no guarantee you could buy the same benefits for yourself if you take a transfer value. There may be a valid reason, but you're entitled to know what it is.

xylophone said:

Were you a member of the Standard Section?

 If so, when you left this employment and became a deferred member of the Pension Scheme, were you given ( and if so, do you still have) a statement of deferred benefits showing

Pre 88 GMP

Post 88 GMP

Excess?

 From the booklet issued in 2011.

https://www.bspensions.com/standard-section-s5/deferred-pensioners-s29/how-is-my-pension-calculated--s105.html

No need for OP to provide any information about their period of membership etc; that's for the trustees/administrators to deal with. If they can calculate a transfer value, they can calculate what OP's pension would/should have been.