Deduction from company pension due to contracting out of SERPS

PensionsAreReallyConfusing

I have a defined benefit pension from a previous employer around 1993-97.
I have been sent a pension forecast of £2200 pa but they are deducting £154 pa from that due to having been Contracted Out.
I don't understand how the company scheme can deduct anything when I thought that at worst there could be a deduction from the State Pension but I have caught up with NI years and now have a projected full pension.
This was originally a Midland Life (part of Midland Bank) scheme that then became an HSBC scheme.
I have other pensions from that era that have not advised of a deduction.

Can anyone help me understand whether this is correct?

chapea

hi it is correct   Midland/HSBC operate a clawback scheme if you google pensioners have been fighting this for years  I believe Barclays used to have this as well but stopped a few years ago

it was also worked out on years of service not just salary. I have an ill health pension through them and as soon as I am able to collect my state pension (another few years) the clawback will start. Mine is £1530 pa they will take back even though I was one of the lowest paid but I worked got them for 27 years before retiring 

there are a lot of people who did not know I can’t remember being told about it when I joined the scheme but as I’d only just turned 19 I may have been. It was only when I saw it mentioned in the newspaper that I asked the pension administrator as there was nothing in my paperwork mentioning this. They apologised and sent out new papers with the amount to be clawed back on. 

DE_612183

https://www.midlandclawbackcampaign.co.uk/history/

PensionsAreReallyConfusing

Thank you. Very useful and informative.
That's extremely disappointing behaviour from them and will certainly make me think again about who I'm banking with!

Linton

Is this actually a claw-back or rather an aid to people retiring before State Pension Age to balance their finances, pre-SPA income was enhanced at the cost to post-SPA income?  If so it would be specified in the rules of the scheme.

PensionsAreReallyConfusing

I'm not sure how that would have worked at outset as the scheme retirement age and SPA were the same. The lack of flashback has only materialised as extra money since the SPA has increased by 7 years, for me.

dunstonh

PensionsAreReallyConfusing said:

I'm not sure how that would have worked at outset as the scheme retirement age and SPA were the same. The lack of flashback has only materialised as extra money since the SPA has increased by 7 years, for me.

I thought most of the old bank DB schemes had a scheme age of 60 and a bridging pension until state pension age when the bridging pension would cease.       

xylophone

HSBC took over Midland in 1992.


See

https://committees.parliament.uk/writtenevidence/90104/pdf/

However, there is another aspect of some DBS schemes that results in employers reducing the pensions of retired staff and which also conflicts with equality law. That is State Pension Integration and specifically how it is applied by some employers.

Our experience is specifically with a Midland Bank DBS scheme now falling within the HSBC UK pension schemes following the purchase of Midland Bank by HSBC in the 1990s. 

Midland Bank had chosen to call clawback, “state deduction”. Unfortunately this name, without detailed description being readily provided at the same time, led many staff to think “state deduction” was something to do with being contracted-out of SERPS. HSBC chose to continue this terminology when it bought Midland Bank. Clawback is nothing to do with contracting-out. 

Scheme Guides here if interested.



https://futurefocus.staff.hsbc.co.uk/-/media/project/futurefocus/information-centre/active-hybrid/guides/june-1978-midland-member-guide.pdf


https://futurefocus.staff.hsbc.co.uk/-/media/project/futurefocus/information-centre/deferred-db/guides/june-1986-midland-member-guide.pdf


https://futurefocus.staff.hsbc.co.uk/-/media/project/futurefocus/information-centre/deferred-db/guides/midland-member-guide.pdf