Was GMP reconciliation brushed under the proverbial carpet after our COPE figures were set in 2016?

1957DfurdPensionist

The question is in the thread title.  

QrizB

Apples and oranges.

Only the state pension has a COPE.

Only private pensions have GMP.

The two aren't linked.

As I understand it, GMP reconciliation is still ongoing for the majority of schemes (it certainly is for my old DB).

hyubh

1957DfurdPensionist said:

The question is in the thread title.  

I think some context would be helpful. The deadline for bulk GMP reconciliation queries to HMRC was in 2018. As such GMP reconciliation exercises should heave been completed by early 2019. However following that we have had GMP rectification exercises (correcting to accept HMRC GMP values) and then (for private sector schemes) GMP equalisation (complex calculations going back to exit to partly equalise the impact of GMP reflecting different accrual rates and normal pension ages for men and women). So talk in 2025 of GMP exercises being 'ongoing' are likely to be referring to GMP equalisation, not reconciliation (or even rectification, though sometimes this is put off to be done with equalisation work together).

That said - back in the middle of the last decade there was talk of the government arranging for individual contracted out statements being issued once GMP reconciliation was considered complete for the pensions industry as a whole. However this idea was quietly dumped in favour of the single COPE figure approach.

Edit - on second thoughts, are you asking whether the results of GMP reconciliation exercises (in principle done by mid-2019) were fed back into the original COPE calculations done in 2016...?

Marcon

QrizB said:

Apples and oranges.

Only the state pension has a COPE.

Only private pensions have GMP.

The two aren't linked.

As I understand it, GMP reconciliation is still ongoing for the majority of schemes (it certainly is for my old DB).

I think you have equalisation in mind? Reconciliation was a wholly different (but equally time and money consuming) exercise.

QrizB

Marcon said:

QrizB said:

Apples and oranges.

Only the state pension has a COPE.

Only private pensions have GMP.

The two aren't linked.

As I understand it, GMP reconciliation is still ongoing for the majority of schemes (it certainly is for my old DB).

I think you have equalisation in mind? Reconciliation was a wholly different (but equally time and money consuming) exercise.

Sorry, yes. Equalisation.

DRS1

Is this what you meant?

Pension reduced because of GMP recalculation. — MoneySavingExpert Forum

1957DfurdPensionist

hyubh said:

1957DfurdPensionist said:

The question is in the thread title.  

I think some context would be helpful. The deadline for bulk GMP reconciliation queries to HMRC was in 2018. As such GMP reconciliation exercises should heave been completed by early 2019. However following that we have had GMP rectification exercises (correcting to accept HMRC GMP values) and then (for private sector schemes) GMP equalisation (complex calculations going back to exit to partly equalise the impact of GMP reflecting different accrual rates and normal pension ages for men and women). So talk in 2025 of GMP exercises being 'ongoing' are likely to be referring to GMP equalisation, not reconciliation (or even rectification, though sometimes this is put off to be done with equalisation work together).

That said - back in the middle of the last decade there was talk of the government arranging for individual contracted out statements being issued once GMP reconciliation was considered complete for the pensions industry as a whole. However this idea was quietly dumped in favour of the single COPE figure approach.

Edit - on second thoughts, are you asking whether the results of GMP reconciliation exercises (in principle done by mid-2019) were fed back into the original COPE calculations done in 2016...?

Yes, I'd hazard you have a pretty complete grasp of it, @hyubh, although here we are now in 2025 so if there really is outstanding GMP Reconciliation being deliberately tasked for future attention alongside gender equalisation in some quarters, that seems a pretty poor show, and now almost 7 years overdue. Therein are QrizB's apples v. oranges perhaps i.e. reconciliation v. equalisation, maybe both largely brushed under carpets.

I am most concerned with incorrect GMP records and incorrect DC pension provider records having led to mere guesstimates of COPE/RDA numbers being rush dished out to us in 2016 which have never been verified since. 

Those are the numbers that have directly reduced our new State Pension entitlements - in my case by £125 per week at current rates.  I have had to purchase a maximum permissible 7 years VC's to get even close to a maximum nSP.  Yes with those particular numbers it is likely that even if my COPE or RDA whatever you call it was significantly adjusted down to a current equivalent of around £75pw I can never increase my current nSP above £230.25pw, but I could probably have saved the thousands I spent on VC's.

Part of COPE is linked to a formula devised by HMG to estimate the extra private pension they think will be gained from the surviving bits of GMP in the motley remains of many of our private long ago wound up private DB pension arrangements alongside HMG's estimate of what extra pension will be gained from the DC SERPS replacement policies like the one sold to me in 1989 with 2 years promotional HMRC backdating.  The exact details of their estimates and formulae are not provided.  There is of course a small chance that if my HMRC contracted out records are revisited with some vigour at payslip level, I could end up with an even greater COPE/RDA and thus lower starting nSP, However, given that HMRC cannot currently explain the two or three periods of employment where their records of my contracting out providers seem to overlap including their 1989 2 years "free-money" backdating, the chances of being worse off are slight I think..
 
There is another reason why I'd like my State Pension Starting Amount/Foundation Amount(?) to be correctly calculated as opposed to relying on swings and roundabouts to provide the overall roughly correct contracted out intention of bolstering my private pension by a similar amount as erstwhile State Additional Pensions flavours of 78/97, 97/02 and 02/16.  Where I reside, my UK private pensions when I claim them are likely to be doubly taxed, whereas the whole of any UK State Pension is exempt from local tax.  A similar question arises over local taxation of potential Tax Free Lump Sums which may have been largely or even 100% in one DC case funded by HMRC rebates.

DRS1 said:

Is this what you meant?

Pension reduced because of GMP recalculation. — MoneySavingExpert Forum

Yes @DRS1, that seems to be an example of one effect.

Here is a perhaps more interesting example where the Scottish Parliament decided to let overpayments stand uncorrected (quite opposite to Westminster's approach!): https://pensions.gov.scot/gmp-reconciliation-and-end-contracting-out.

molerat

I fear you may be overestimating the effect the actual COPE figure had on your starting amount, the lack of additional pension would likely be the bigger cause.  My COPE was £74.82 but anything over £19.19 would have left me reliant on the old rules calculation so an adjustment of some magnitude from the "guesstimates of COPE/RDA numbers" would be needed to have any effect on the starting amount.  Unless of course you are suggesting there should be no COPE used in the calculations ?

1957DfurdPensionist

molerat said:

I fear you may be overestimating the effect the actual COPE figure had on your starting amount, the lack of additional pension would likely be the bigger cause.  My COPE was £74.82 but anything over £19.19 would have left me reliant on the old rules calculation so an adjustment of some magnitude from the "guesstimates of COPE/RDA numbers" would be needed to have any effect on the starting amount.  Unless of course you are suggesting there should be no COPE used in the calculations ?

(my bold above) I don't quite follow that bit, @molerat.  How would those of us who were pretty much continuously contracted out (of Additional State pension/SERPS/S2P) from 1978 to 2016 inclusive ever qualify for any additional State pension whatsoever?

Silvertabby

1957DfurdPensionist said:

molerat said:

I fear you may be overestimating the effect the actual COPE figure had on your starting amount, the lack of additional pension would likely be the bigger cause.  My COPE was £74.82 but anything over £19.19 would have left me reliant on the old rules calculation so an adjustment of some magnitude from the "guesstimates of COPE/RDA numbers" would be needed to have any effect on the starting amount.  Unless of course you are suggesting there should be no COPE used in the calculations ?

(my bold above) I don't quite follow that bit, @molerat.  How would those of us who were pretty much continuously contracted out (of Additional State pension/SERPS/S2P) from 1978 to 2016 inclusive ever qualify for any additional State pension whatsoever?

I was contracted out between 1978 and 2016 and had my 2016 foundation amount topped up by a bit of SP2. (and a bit of pre 1975 Graduated Pension)

SERPS was replaced by SP2 in 2002, which was designed to pay more additional State pension to lower paid contracted in workers.  Re-jigging contracted out schemes COD calculations must have been too much of a faff, so what happened was that eligible contracted out workers received the difference between SERPS and SP2 as additional State pension.

Those contracted out workers on more than the average wage wouldn't have received the SP2 top up, but many - specifically those on the minimum wage equivalent or not much more - did.  Oddly enough, I did too.  Not because I was on minimum wage, but because I had opted to go part time for my last 5 years.  I don't know if this was intentional, or if it was by accident or omission - all I can say is that if I had remained full time for those last 5 years I wouldn't have received the SP2 top up with my State pension but, even though my salary was reduced by choice, I did.  Saved me a year or two of voluntary Class 3 NI contributions.  

xylophone

https://assets.publishing.service.gov.uk/media/5a7c2e95e5274a25a9140fdc/single-tier-valuation-contracting-out.pdf

It was possible for moderate earners to accrue some S2P even if contracted out.

https://en.wikipedia.org/wiki/State_Second_Pension