GMP or COPE

Ritzola

Hi, I'm sorry if this sounds naive, but is COPE the same as GMP?

I recently retired. I bought back as many of my missing National Insurance (NI) years as I could (thank you to the forum). My State Pension is £223 per week. HMRC wrote to me saying my Contracted-out Pension Equivalent (COPE) estimate was £39.98 per week. They advised me to follow up with my prior employer, a publicly traded company with whom I have my Defined Benefit (DB) pension.

I have made multiple calls and sent emails to the DB provider to ask about the status of this, and even just to request if it's already included in my DB pension with them, but I have not received any answers. This has been going on for a couple of years. Their website has a generic note about a 2018 court case, stating that the matter is being looked into by the trustees.

Is this a class-action suit that everyone is waiting for a judgment on? Or is the company just holding onto the money? Any advice on what my options are would be greatly appreciated.

Thank you. 

MallyGirl

It is part of your DB pension if that was contracted out. If it was a different employment that was contracted out then it depends on whether that was also a DB or a DC pension. There is no free standing COPE pot lurking around 

QrizB

Ritzola said:

Hi, I'm sorry if this sounds naive, but is COPE the same as GMP?

COPE isn't the same as GMP, but the money you receive as GMP is the part of your pension you've got instead of the S2P you'd have got is you were contracted-in.

Ritzola said:

I bought back as many of my missing National Insurance (NI) years as I could (thank you to the forum). My State Pension is £223 per week.

That's less than the £230.25 that would be a "full" New State Pension, but if you've bought all the years you could, and assuming the calculations have been completed, it will be as much as you can expect.
This is your previous thread?
https://forums.moneysavingexpert.com/discussion/6585409/voluntary-national-insurance-contributions-abroad-class-3-or-2

Did you buy all 18 years? Did HMRC/DWP advise how much your pension would be after buying them, and was that slightly short of the max?

Silvertabby

Your COPE is indeed included with your contracted out DB pension, but isn't the same amount as your GMP.  That would be too easy!

It sounds like your DB is private sector rather than public sector, so inclined to think that the 2018 court case may be in relation to the way your GMP is increased?

The book of GMP is almost as long as War & Peace but, very briefly, any contracted out pension accrued between 1978 and 1997 is split as follows:

Pre 1988 GMP
Post 1988 GMP
Excess (over GMP) pension.

Total = Pension in payment.

In the case of those who reached SPA before 6 April 2016 cost of living increases are applied thus:

Pre 1988 GMP - cost of living increases paid with the State pension.
Post 1988 GMP - cost of living increase up to 3% paid by DB pension scheme.  Anything over 3% paid with the State pension.
Excess - cost of living increases paid by DB scheme (unless public sector, may be capped, or only if approved by the trustees).

But, with the introduction of the new State pension in 2016, and the end of contracting out, the rules changed.  After a lot of faffing about the public sector DB schemes decided that they would pay the GMP increases (both pre and post 1988) in full.  But many private sector DB schemes have stated that they are sticking with the old rules, even though they know that the State pension won't pay either.  Hence at least one Ombudsman complaint that I'm aware of.

Marcon

QrizB said:

Ritzola said:

Hi, I'm sorry if this sounds naive, but is COPE the same as GMP?

COPE isn't the same as GMP, but the money you receive as GMP is the part of your pension you've got instead of the S2P you'd have got is you were contracted-in.

No - GMPs were built up in place of SERPS benefits. S2P wasn't introduced until well after the build up of further GMPs had been stopped. Sorry to nitpick, but it matters!

Ritzola said:

I have made multiple calls and sent emails to the DB provider to ask about the status of this, and even just to request if it's already included in my DB pension with them, but I have not received any answers. This has been going on for a couple of years. Their website has a generic note about a 2018 court case, stating that the matter is being looked into by the trustees.

Is this a class-action suit that everyone is waiting for a judgment on? Or is the company just holding onto the money? Any advice on what my options are would be greatly appreciated.

Thank you. 

No - it isn't the company 'just holding onto the money'. The 2018 case in question (Lloyds) relates to the equalisation of benefits paid by pension schemes which were contracted out of SERPS. It has given rise to some of the most complex, expensive and time-consuming calculations imaginable and very many schemes are still grappling with it. 

There's a good explanation of the issue included in this complaint which went to the Pensions Ombudsman: https://www.pensions-ombudsman.org.uk/decision/2025/cas-71351-p8x2/volkswagen-group-pension-scheme-cas-71351-p8x2

As you will note, the scheme has had to pay compensation for their failure to communicate with the member in question (points 75 to 78), given that he had specifically contacted the trustees to ask for information. 

Maybe time to raise a formal complaint about the lack of communication using your scheme's Internal Dispute Resolution Procedure? Not replying to correspondence for over two years certainly falls into the category of maladministration.

QrizB

Marcon said:

QrizB said:

Ritzola said:

Hi, I'm sorry if this sounds naive, but is COPE the same as GMP?

COPE isn't the same as GMP, but the money you receive as GMP is the part of your pension you've got instead of the S2P you'd have got is you were contracted-in.

No - GMPs were built up in place of SERPS benefits. S2P wasn't introduced until well after the build up of further GMPs had been stopped. Sorry to nitpick, but it matters!

Apols, I almost typed SERPS but changed my mind! Thank you for the correction.

xylophone

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

For Rebate Derived Amount read COPE (Contracted Out Pension Equivalent).

Ritzola

QrizB said:

Ritzola said:

Hi, I'm sorry if this sounds naive, but is COPE the same as GMP?

COPE isn't the same as GMP, but the money you receive as GMP is the part of your pension you've got instead of the S2P you'd have got is you were contracted-in.

Ritzola said:

I bought back as many of my missing National Insurance (NI) years as I could (thank you to the forum). My State Pension is £223 per week.

That's less than the £230.25 that would be a "full" New State Pension, but if you've bought all the years you could, and assuming the calculations have been completed, it will be as much as you can expect.
This is your previous thread?
https://forums.moneysavingexpert.com/discussion/6585409/voluntary-national-insurance-contributions-abroad-class-3-or-2

Did you buy all 18 years? Did HMRC/DWP advise how much your pension would be after buying them, and was that slightly short of the max?

Yes, I bought all 18 years, just before the cutoff date last year. 
HRMC wrote to me in July 2023 saying the most I could improve my pension forecast to was ukpd 197.63.  That was also the letter that they mentioned the COPE issue. 
I've rechecked the HRMC website and I have 36 paid years so would that qualify me to receive the ukpd 230.25?   

Marcon

Ritzola said:

QrizB said:

Ritzola said:

Hi, I'm sorry if this sounds naive, but is COPE the same as GMP?

COPE isn't the same as GMP, but the money you receive as GMP is the part of your pension you've got instead of the S2P you'd have got is you were contracted-in.

Ritzola said:

I bought back as many of my missing National Insurance (NI) years as I could (thank you to the forum). My State Pension is £223 per week.

That's less than the £230.25 that would be a "full" New State Pension, but if you've bought all the years you could, and assuming the calculations have been completed, it will be as much as you can expect.
This is your previous thread?
https://forums.moneysavingexpert.com/discussion/6585409/voluntary-national-insurance-contributions-abroad-class-3-or-2

Did you buy all 18 years? Did HMRC/DWP advise how much your pension would be after buying them, and was that slightly short of the max?

Yes, I bought all 18 years, just before the cutoff date last year. 
HRMC wrote to me in July 2023 saying the most I could improve my pension forecast to was ukpd 197.63.  That was also the letter that they mentioned the COPE issue. 
I've rechecked the HRMC website and I have 36 paid years so would that qualify me to receive the ukpd 230.25?   

No. Like everyone else born before 2000, you are under 'transitional' arrangements, so nobody here can comment on how many 'years' of NI you would need.

QrizB

Ritzola said:

Yes, I bought all 18 years, just before the cutoff date last year. 
HRMC wrote to me in July 2023 saying the most I could improve my pension forecast to was ukpd 197.63.

In 2023-24, the full New State Penion was £203.85, so even then you were being told that you wouldn't quaify for a full pension. Your forecast was just under 97% of a full pension.

Today the full pension is £230.25, and pro-rata you should be receiving about £223.22 a week. That's consistent with the figure you quoted earlier.