Deferred DB pension - my head is spinning!

Phossy

Yes, the CPI index has increased by 34%, however, my pension  (and yours I expect) will not see that figure as it is  capped at 5% and so it didn't capture the large CPI increases in recent years.  https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/d7g7/mm23

mrklaw

But on this document https://www.legislation.gov.uk/uksi/2024/1174/made

the latest 2024 figures, that should consider caps as it’s a pension adjustment rather than an RPI/CPI list 

based on this, for a 2015 leaver that would be a 34% adjustment for the higher rate so pension contributions up to 2009 I think? - and 28% for the lower cap applied to contributions after 2009

so should be something between the two depending how many of your service years are pre/post 2009. I think I’m 8/7 so roughly midway so wouldn’t that be approximately a 31% correction overall? 

Sarahspangles

mrklaw said:

But on this document https://www.legislation.gov.uk/uksi/2024/1174/made

the latest 2024 figures, that should consider caps as it’s a pension adjustment rather than an RPI/CPI list 

based on this, for a 2015 leaver that would be a 34% adjustment for the higher rate so pension contributions up to 2009 I think? - and 28% for the lower cap applied to contributions after 2009

so should be something between the two depending how many of your service years are pre/post 2009. I think I’m 8/7 so roughly midway so wouldn’t that be approximately a 31% correction overall? 

Those revaluation figures don't apply to all pensions.

It's why people need to hang on to their scheme booklet. Knowing which acts were in force when the pension was commenced, and apply now may be relevant to understanding how they work. They're not retroactively amended.

The legislation you linked refers to public sector pensions in the main, where it takes an Act to amend the scheme or direct what the administrators need to do. In the private sector defined benefit/final salary pensions were between the employer and employee/their union in most cases.

mrklaw

Shouldn’t this be a little simpler? We have all these newish freedoms to plan and control our money but unless you kept a leaflet from possibly 20+ years ago you’re reliant on the pension administration being willing to send you a new calculation and it being correct. Seems still a bit too Wild West for something that should be pretty heavily regulated 

I’ll wait a while for a revised figure and in the meantime I’ll try illustrating the lower amount mentioned (21%) and also make that a variable so I can adjust it to try different amounts. Heck even the day you take it can make a big difference if it’s the anniversary or year end it end of financial year or whenever the scheme calculates an increase - again not transparent information it’s up to you to pick the right day without knowing any of this 

Dazed_and_C0nfused

mrklaw said:

Shouldn’t this be a little simpler? We have all these newish freedoms to plan and control our money but unless you kept a leaflet from possibly 20+ years ago you’re reliant on the pension administration being willing to send you a new calculation and it being correct. Seems still a bit too Wild West for something that should be pretty heavily regulated 

I’ll wait a while for a revised figure and in the meantime I’ll try illustrating the lower amount mentioned (21%) and also make that a variable so I can adjust it to try different amounts. Heck even the day you take it can make a big difference if it’s the anniversary or year end it end of financial year or whenever the scheme calculates an increase - again not transparent information it’s up to you to pick the right day without knowing any of this 

They primarily relate to DC pensions, not DB pensions.

mrklaw

Sigh

Please note that, as you are below 55 years of age at this point of time, which is the minimum age requirement for a member to be eligible to request retirement quote. Hence, we will not be able to issue any retirement quote.

I’m 54. If I’m technically able to access my pension from 55, how can I reasonably do that if they won’t even give me a quote/revaluation until *after* I’m 55? 

Sarahspangles

mrklaw said:

Sigh

Please note that, as you are below 55 years of age at this point of time, which is the minimum age requirement for a member to be eligible to request retirement quote. Hence, we will not be able to issue any retirement quote.

I’m 54. If I’m technically able to access my pension from 55, how can I reasonably do that if they won’t even give me a quote/revaluation until *after* I’m 55? 

Just checking - have you been offered access to a website for deferred pensioners of your former employer? This would probably be dual branded i.e Old Compamy + Aptia

hyubh

Sarahspangles said:

mrklaw said:

But on this document https://www.legislation.gov.uk/uksi/2024/1174/made

the latest 2024 figures, that should consider caps as it’s a pension adjustment rather than an RPI/CPI list 

based on this, for a 2015 leaver that would be a 34% adjustment for the higher rate so pension contributions up to 2009 I think? - and 28% for the lower cap applied to contributions after 2009

so should be something between the two depending how many of your service years are pre/post 2009. I think I’m 8/7 so roughly midway so wouldn’t that be approximately a 31% correction overall? 

Those revaluation figures don't apply to all pensions.

The link is to statutory revaluation though - unless the scheme uses pension increase review orders instead (i.e. the uncapped year-by-year increases public service schemes use), then the link gives the required minimum for excess (i.e. pension that isn't GMP).

The legislation you linked refers to public sector pensions in the main

Au contraire, the link is for private sector schemes...

mrklaw

Sarahspangles said:

mrklaw said:

Sigh

Please note that, as you are below 55 years of age at this point of time, which is the minimum age requirement for a member to be eligible to request retirement quote. Hence, we will not be able to issue any retirement quote.

I’m 54. If I’m technically able to access my pension from 55, how can I reasonably do that if they won’t even give me a quote/revaluation until *after* I’m 55? 

Just checking - have you been offered access to a website for deferred pensioners of your former employer? This would probably be dual branded i.e Old Compamy + Aptia

Yes I have one with mercer(now Aptia). It has a retirement illustration link that doesn’t work (maybe because I’m not 55 and heaven forbid someone might want to illustrate in advance), a simple statement of my deferred pension as of 2015 when I left that never changes or updates, and a list of documents that are old or mostly overall plan health not related to my account specifically. 

No updated measure, I did find the ‘CPI capped at 5%’ in there somewhere though which is why I thought the left column in that government sheet would be valid. 

Sarahspangles

mrklaw said:

Sarahspangles said:

mrklaw said:

Sigh

Please note that, as you are below 55 years of age at this point of time, which is the minimum age requirement for a member to be eligible to request retirement quote. Hence, we will not be able to issue any retirement quote.

I’m 54. If I’m technically able to access my pension from 55, how can I reasonably do that if they won’t even give me a quote/revaluation until *after* I’m 55? 

Just checking - have you been offered access to a website for deferred pensioners of your former employer? This would probably be dual branded i.e Old Compamy + Aptia

Yes I have one with mercer(now Aptia). It has a retirement illustration link that doesn’t work (maybe because I’m not 55 and heaven forbid someone might want to illustrate in advance), a simple statement of my deferred pension as of 2015 when I left that never changes or updates, and a list of documents that are old or mostly overall plan health not related to my account specifically.

No updated measure, I did find the ‘CPI capped at 5%’ in there somewhere though which is why I thought the left column in that government sheet would be valid. 

OH’s administrator is also now Aptia and over the year he’s mentioned the portal has improved, but as he’s an active pensioner it’s in their interest to provide automated access because that’s how they reduce their staff costs.

What you get varies, because the employers define this in the outsourcing process.

Sorry if I’ve confused things in the discussion about the Stat instrument. I don’t think it’s possible to use it other than as a source of definitive information on CPI. You have to substitute 5% wherever CPI is higher. I understand some pensions will pay above CPI over an averaging period - it really shows how much variation there is with DBs. OH worked for the same employer for over 40 years and has four sets of rules.