No reduction for taking pension early

katejo

Cobbler_tone said:

Or a more complex scheme where some is reduced before 65 and some isn't. The scheme closed to new members in the July 2010 date.

That's how mine is. I have a pension statement which explains what I will lose/gain by retirement at 60, 65 and 66. 

Cobbler_tone

katejo said:

Cobbler_tone said:

Or a more complex scheme where some is reduced before 65 and some isn't. The scheme closed to new members in the July 2010 date.

That's how mine is. I have a pension statement which explains what I will lose/gain by retirement at 60, 65 and 66. 

Mine is very straight forward as the portal gives a pension value at any given date. It is accurate in line with retirement quotes I have requested.

Aylesbury_Duck

An update:  Having asked the current pension provider about the situation, they have sent me a secure message to say that a reduction will apply if I elect to draw the pension before 65.  That contravenes the table and clause in the original scheme documentation I hold, so my next step is to scan that and send it to them and see what they say.  It is possible that there was an update at some point that I've missed, but I'm usually pretty good with these things so I think it unlikely, and there's nothing in any of the numerous scheme updates or documents they have available on the portal.

I'm 8 years from turning 60 and the sums involved are modest, so there's no rush, but as I'm constructing my pension planning spreadsheet, it would be helpful to know for certain whether the DB pension's current projection of £3k p.a. is available at that value at 60 rather than at 65.  

Tommyjw

I'd ask for a copy of the Scheme rules as well.

I've seen it before where many years ago a company did the same thing, and it removed it in something like 2000 after having been in place since the 80's. It was a discretionary allowance, and the way i saw they worded it in oolder documents was never clear enough to say it was discretionary and could be removed, but the rules was very clear this was the case that it wasnt guaranteed and relied on the company agreeing to it (who ultimately paid for it by paying an extra amount to the Pension Scheme calculated by actuary as being the extra cost above normal benefits), so the Scheme always had the rules to fall back on as a defense.

In this case because the company later decided it cost too much, the Trustee had no choice but to remove it as the company no longer agreed to it which was required in the rules. It was quietly mentioned in a 2000 letter to all members impacted and then never again, so once ever year or so it pops up someone asking about it.

bjorn_toby_wilde

Aylesbury_Duck said:

An update:  Having asked the current pension provider about the situation, they have sent me a secure message to say that a reduction will apply if I elect to draw the pension before 65.  That contravenes the table and clause in the original scheme documentation I hold, so my next step is to scan that and send it to them and see what they say.  It is possible that there was an update at some point that I've missed, but I'm usually pretty good with these things so I think it unlikely, and there's nothing in any of the numerous scheme updates or documents they have available on the portal.

I'm 8 years from turning 60 and the sums involved are modest, so there's no rush, but as I'm constructing my pension planning spreadsheet, it would be helpful to know for certain whether the DB pension's current projection of £3k p.a. is available at that value at 60 rather than at 65.  

The Boots pension changes last year illustrate that, if the option to take the pension early are discretionary, then they can be removed. You would expect that would normally be communicated to pensioners and deferred pensioners.

I wouldn’t take the word of the administrators though. You’re right to ask for proof. It isn’t unusual for administrators to make mistakes and neither is it uncommon for them to make things up to cover for those mistakes in my personal experience.

Aylesbury_Duck

Another update:

After having that initial response that there would be a reduction if I drew the pension before turning 65, I have today received a further, unprompted update apologising for the incorrect information and confirming that there is no reduction applied for drawing the pension from aged 60.  They've included a copy of the scheme rules, too.

They beat me to it, I hadn't yet gone back to them to ask for the scheme rules!

kempiejon

And someone is getting some training

Aylesbury_Duck

kempiejon said:

And someone is getting some training

Having looked through the scheme rules they sent, I can see why they made a mistake.  It's all a result of the Barber equalisation and there are five possible time windows in which an employee left service, each of which results in a different entitlement.  I happen to have left in the window where the male retirement age is equalised to the female retirement age of 60.  The advice they initially gave would be correct for anyone leaving in the last 21 years.

I'm just glad that I kept the scheme booklet from all those years ago, and that I took the time to read it, understand it and query it.  It's possible that the scheme would have started paying me from 65 and I would have missed out on five prior years of unreduced payments.