Aptia misapplying GMP equalisation process for deferred pension

CuriousCrow22

I want to thank eveyone for their comments, they have helped me get the way I should approach this with Aptia straight in my mind, but have if anything increased my certainty that Aptia has miscalculated. However that's not the same as knowing for sure where they have miscalculated allthough applying 3% instead of RPI to the non GMP portion looks a likely place. But which year did they do this from? I'd be happier if I could get their percentage (3%) to come out as their numbers but I cannot if I run it forward from 2017 (their figures are too low even using 3% from 2017) . I suspect the easiest way for me to identify the issue would be for them to give me the year on year figures (as if I had asked for a statement every year since inception) but I doubt they will want to do that. I am not looking forard to continuing to fight their website and general IT issues such as always replying using a do not reply email address, but in the end if they make things too hard after a certain time I will escalate to the Ombudsman (am I naive to hope that communicating with the Ombudsman will not be as difficult as communicating with Aptia?).
I aim to let folk know how I get on!

Marcon

CuriousCrow22 said:

Marcon said:

CuriousCrow22 said:

There is even more to this but this post is long enough already. Looking for advice as to how to approach this.

Absolutely no point trying to pursue it here - you'd need to provide a whole load more information and you've clearly had quite enough pensions jargon/confusion in your life already (and frankly your post verges on the defamatory, especially your suggestion about how other members are being treated - doubtless a product of the frustration you are feeling).

Ultimately the trustees are responsible for the correct running of the scheme, which is trust, not contract, based. You are, and will remain, entitled to the benefits promised under the Trust Deed & Rules of your particular scheme, so the legal distinction doesn't matter too much.

Your complaint at this point (depending on what's happened to date in terms of communication with the administrators) should be that you can't get an answer couched in terms you can understand/which sets your mind at rest. Ask for a copy of the scheme's Internal Dispute Resolution Procedure (it's specific to the scheme, so you can't download any old thing from the internet) and use that, rather than banging your head on a brick wall and getting yourself very upset (quite possibly needlessly - as the post above says, it's may be that the figures 'could make sense') in the process.

If you don't get a satisfactory answer once you've completed the IDRP, then you could if necessary go on to the Pensions Ombudsman (not the regulator) with a complaint of maladministration. Hopefully the mere fact that you ask the administrators for a copy of the IDRP will put them on notice that they need to give you a much clearer explanation - and if you ensure the trustees also know you've asked for a copy, that won't do any harm to getting things resolved.

Thank you, you have filled in various gaps in my knowledge such as "trust , not contract" (I like to get the terminology correct) and "Ombudsman (not the regulator)". The key point though is  "You are and will remain, entitled to the benefits promised under the Trust Deed and Rules of your particular Scheme". I've only put a summary here, I have kept every document I was ever given regarding this pension and I have run the actual numbers in a spreadsheet and I am very confident that the percentage uplift Aptia say they have applied (3%) is not the one that was 1. Applied previously until 2017 and 2. Promised in the Scheme documentation I still have and 3.Promised again in the "Statement of Deferred Pension Benefit" which I'll quote:
"The pension in excess of the GMP accrued to date of leaving is subject to revaluation for each complete year between the date of leaving and NRD. The rate of revaluation is broadly in line with the increase in the Retail Price Index of the period concerned but subject to a maximum rate of revalution of 5% per annum".
It isn't a complex calculation to estimate (using Excel, with the RPI for each year from a government website, compounded (and yes I remembered to cap 2022 and 2023 down from 11.6% and 9.7% to 5% in both cases).
I will, as you suggest, ask for the IDRP in the first instance. Am I right that once initiated, I must persist with IDRP for a number of weeks (8?) however hard it is made, and only then (if not resolved) can I go to the Ombudsman? To be fair I can play a long game, I've still got over 6 years to my NRD, and no relaistic prospect of retiring until then.

I'm afraid it could be rather longer, especially if you have a two-stage rather than one-stage IDRP. Having said that, make sure the trustees know that you've asked for details of the IDRP. They won't be thrilled to learn that and even though they don't get formally involved until stage two (if it's a two stage procedure), most half decent trustee boards will start to make waves when they know a member has reached that level of hacked off-ness.

GMPEqCommenter

CuriousCrow22 said:

GMPEqCommenter said:

A key point is that "your pension has not changed in value" and "the level of your pension in any given year has not changed" are not the same thing. Considering a simplified example, if you have a pension of £500 in one year and £600 in the next year, and that changes to £525 and £575, you're still getting paid a total amount of money of £1,100 under both approaches. In practice when thinking about "value" actuaries do a more complicated version of this where they allow for things like the fact that it's more useful to have money earlier rather than later and there's a possibility you'll die before you get future payments.

Equalisation requires that the male and female pensions be equal, and assuming that they were different to start with that means at least one of them is going to change. One of the approaches, Method B, makes the change by just looking at the male and female pensions at each point in time and paying whichever is higher (and can therefore end up paying a final pension which is higher than either sex would have got originally if it varies over time as to which sex is better off), but Conversion in particular does more reshaping.

It sounds like your pension was equalised using conversion, and probably by doing a one-off calculation for members to create a new pension at date of leaving (it's possible the scheme is intending to do the conversion calculations at the time you actually retire but this sounds less likely given the things the administrator is saying). Did the scheme send you a statement at some point telling you what your pension would be following conversion? If so, was it the same total pension at date of leaving, and were the splits of XS and GMP the same, or had they changed?

It is possible for your pension at date of leaving to change as a result of conversion if you're still deferred. The conversion rules prevent a pension that is already in payment from decreasing, but there's no such protection for a pension that hasn't come into payment yet. In practice most schemes when doing deferred conversion tend to aim to make the pension at NRA equal to the higher of the male and female pension at NRA, on the basis that the actual pension that goes into payment is the thing that really matters. This can result in the pension at date of leaving changing because the rate of deferred revaluations have changed (in particular, the deferred revaluations for males and females are often unequal, so in order to achieve equality you have to change at least one of them).

My pension at date of leaving is unchanged. The ratio between GMP and non GMP portions is changed by a small amount (the GMP portion rising by £14). I have run all these numbers through the spreadsheet and (predicatably) they make tiny differences that get nowhere near to explaining the roughly £800 pa their numbers are now out 

In that case I think I'm concurring with "there's a limit to what more we can say here, ask the administrator for a clearer explanation".