Guaranteed Minimum Pensions

hyubh

pdx123 said:

Wondering if someone could point me in the right direction.
I have very similar circumstances to a former colleague of mine, same company & final salary pension scheme, years of service, salary etc. Both took our pensions 10 years early. His pension was less than mine as he took 25% tax free, I didn't. He has just reached 65 and due to mgp has had a around 40% increase on his pension. I was 65 about 5 years ago and had no such increase. 
I have spoken to the pension provider & they don't seem to understand the point I am trying to make.....where do I go from here?

Reaching GMP age doesn't usually entail an increase in a pension in payment. In fact for a private sector scheme, it's not impossible to cause a small decrease. Maybe your former colleague's lump sum was allowed in error? Since the revalued GMP amount must be paid at GPD, the scheme had no option but to uplift the scheme pension if the latter was less.

Silvertabby

hyubh said:

pdx123 said:

Wondering if someone could point me in the right direction.
I have very similar circumstances to a former colleague of mine, same company & final salary pension scheme, years of service, salary etc. Both took our pensions 10 years early. His pension was less than mine as he took 25% tax free, I didn't. He has just reached 65 and due to mgp has had a around 40% increase on his pension. I was 65 about 5 years ago and had no such increase. 
I have spoken to the pension provider & they don't seem to understand the point I am trying to make.....where do I go from here?

Reaching GMP age doesn't usually entail an increase in a pension in payment. In fact for a private sector scheme, it's not impossible to cause a small decrease. Maybe your former colleague's lump sum was allowed in error? Since the revalued GMP amount must be paid at GPD, the scheme had no option but to uplift the scheme pension if the latter was less.

My thoughts, too.  When your former colleague took his benefits, having requested the maximum tax free lump sum, he should have been subjected to a 'GMP test'.  ie, his pension couldn't be reduced below the GMP level.  Even if this was missed at retirement, it would have been picked up when he reached GMP age (still 60 for women, 65 for men) and his pension increased to the minimum specified by law.

That said, I'm surprised that the pension provider didn't try to recover the over paid lump sum.  Perhaps if you were to push this issue, quoting your friend as an example, then they may re-visit their earlier decision......

Marcon

pdx123 said:

Wondering if someone could point me in the right direction.
I have very similar circumstances to a former colleague of mine, same company & final salary pension scheme, years of service, salary etc. Both took our pensions 10 years early. His pension was less than mine as he took 25% tax free, I didn't. He has just reached 65 and due to mgp has had a around 40% increase on his pension. I was 65 about 5 years ago and had no such increase. 
I have spoken to the pension provider & they don't seem to understand the point I am trying to make.....where do I go from here?

The administrators of the scheme cannot and will not discuss another member's benefits with you, nor should they. If you are being paid the benefits to which you are entitled under the scheme, you don't 'go' anywhere; that's the requirement, and if the benefits paid to another member are in your view discrepant, that doesn't impact on your entitlement. 

Your circumstances may be 'similar' but they are rarely identical. For a start, there's a five year age difference between you, and of course you don't know the full circumstances (eg he might have brought in a transfer from another scheme and been awarded a 'fixed' pension payable at the scheme's normal retirement age).

The other possibility is that the scheme has been carrying out a GMP equalisation exercise and his bumper increase has uncovered issues in relation to his pension which are now being remedied. Looking at one of your earlier threads https://forums.moneysavingexpert.com/discussion/47760/trustees-powers-to-reduce-benefits/p2 there have clearly been some issues/confusion about early retirement reduction factors.

Finally, never forget that what people tell you isn't always what has actually happened...sometimes accidentally, sometimes deliberately, the tale you hear is rather wide of the mark.