Will my work pension be backdated when first paid?

Roy1234

I have a deferred Final Salary pension with my current employer. The scheme was closed down over a decade ago, and replaced with a Money Purchase one, as so many schemes were.

I am considering retiring soon and drawing this deferred company pension, but not the subsequent money purchase one for now. The work pension adviser thought that (without checking) schemes generally need about 3 months notice for this. I would be retiring after one month's notice not three, so living on savings initially.

My question is, after the (say) three months when the deferred work pension is paid to me, will it be backdated to the date I first applied to draw it, or not?

flaneurs_lobster

Roy1234 said:

My question is, after the (say) three months when the deferred work pension is paid to me, will it be backdated to the date I first applied to draw it, or not?

Generally yes, unless there is a minimum age or Normal Pension Age stipulation that is relevant and would mean that the pension can't be put into payment until this date is reached.

Albermarle

Some of the big pension administrators are very slow to do anything, and often make mistakes as well.

I first applied around 3.5 months from before my actual retirement date, but it was over a month after I retired before the pension officially started ( and even that took many e mails/complaints and getting the Trustees involved).
I was told the pension would be paid in advance, but this was an error as it was paid in arrears. Even then the first payment never arrived. I think it as around 7 months in all before it was finally sorted and some cash arrived in my bank.

There was no backdating at all, not even to the original date requested, never mind back to when I first applied. I just assumed as the start date was a bit later than I anticipated, then the commutation for taking it early was marginally less, and the monthly payments marginally more.

As I was still getting a salary for most of the period, it did not cause me any money issues as such. Just a lot of hassle.

Of course the actual missed first payment was credited in the following month ( when I got a double payment).

Roy1234

flaneurs_lobster said:

Roy1234 said:

My question is, after the (say) three months when the deferred work pension is paid to me, will it be backdated to the date I first applied to draw it, or not?

Generally yes, unless there is a minimum age or Normal Pension Age stipulation that is relevant and would mean that the pension can't be put into payment until this date is reached.

Thanks, I've over 55 so no age limits now.

@Albermarle - your experiences do worry me. My wife has a Scottish Widows pension to draw, a year or so back their Trust Pilot reviews gave experiences like yours; they seem better rated though now.

Were your delays with a private or a works pension? I am 'hoping' perhaps vainly that the latter are more straightforward?

RogerPensionGuy

My guess is if the OP is above the minimum age requirement, probably 55 or maybe 50 years old, the OP can just activate the DB pension anytime, now, next month or last month and they will just process it no worries, this DB probably not linked up to the job or the DC pension.

Normally I hear people just picking a date say 3 months away, like 20DEC2025 maybe, pension will be paid in December or may be the 20JAN2026, if its paid 1st in Jan, that initial payment will include payment for Dec & Jan.

I also hear pension people may say using a persons birth date/day of the month may get the best pension value outcome.
  

Roy1234

RogerPensionGuy said:

My guess is if the OP is above the minimum age requirement, probably 55 or maybe 50 years old, the OP can just activate the DB pension anytime, now, next month or last month and they will just process it no worries, this DB probably not linked up to the job or the DC pension.

Normally I hear people just picking a date say 3 months away, like 20DEC2025 maybe, pension will be paid in December or may be the 20JAN2026, if its paid 1st in Jan, that initial payment will include payment for Dec & Jan.

I also hear pension people may say using a persons birth date/day of the month may get the best pension value outcome.
  

You're right there's no link or age limit now applicable. Payments are backdated, seems the general view.  My retirement 'may' be at shorter notice than intended due to work circumstances, but that's TBC. My question is therefore tentative.

Re your comment on getting a better pension by retiring on a birthday, do I assume that means the annuity tables calculate on whole years and don't prorata for months? Quite crude if so in the era of AI.

Marcon

RogerPensionGuy said:

My guess is if the OP is above the minimum age requirement, probably 55 or maybe 50 years old, the OP can just activate the DB pension anytime, now, next month or last month and they will just process it no worries, this DB probably not linked up to the job or the DC pension.

Probably better not to guess, especially as your guess is likely to be wrong in this case. If someone applies for early retirement, it normally requires trustee and/or employer consent.

RogerPensionGuy said:

Normally I hear people just picking a date say 3 months away, like 20DEC2025 maybe, pension will be paid in December or may be the 20JAN2026, if its paid 1st in Jan, that initial payment will include payment for Dec & Jan.

I also hear pension people may say using a persons birth date/day of the month may get the best pension value outcome.
  

Hearsay probably isn't the most reliable source of information.

Roy1234 said:

I have a deferred Final Salary pension with my current employer. The scheme was closed down over a decade ago, and replaced with a Money Purchase one, as so many schemes were.

I am considering retiring soon and drawing this deferred company pension, but not the subsequent money purchase one for now. The work pension adviser thought that (without checking) schemes generally need about 3 months notice for this. I would be retiring after one month's notice not three, so living on savings initially.

My question is, after the (say) three months when the deferred work pension is paid to me, will it be backdated to the date I first applied to draw it, or not?

The work pension adviser should be checking, not speculating. Either ask them to do so, or check for yourself. This sort of fuzzy 'advice' is worse than useless.

RogerPensionGuy

Roy1234 said:

RogerPensionGuy said:

My guess is if the OP is above the minimum age requirement, probably 55 or maybe 50 years old, the OP can just activate the DB pension anytime, now, next month or last month and they will just process it no worries, this DB probably not linked up to the job or the DC pension.

Normally I hear people just picking a date say 3 months away, like 20DEC2025 maybe, pension will be paid in December or may be the 20JAN2026, if its paid 1st in Jan, that initial payment will include payment for Dec & Jan.

I also hear pension people may say using a persons birth date/day of the month may get the best pension value outcome.
  

You're right there's no link or age limit now applicable. Payments are backdated, seems the general view.  My retirement 'may' be at shorter notice than intended due to work circumstances, but that's TBC. My question is therefore tentative.

Re your comment on getting a better pension by retiring on a birthday, do I assume that means the annuity tables calculate on whole years and don't prorata for months? Quite crude if so in the era of AI.

Obviously do you own research and investigation on everything. 

The OP appears a bit concerned about alining leaving that employment with activating that deferred DB scheme.

Retirement just means a person has stopped working with that employer. 

The OP could of probably activated DB pension months or years ago and likewise probably activate it next year or 2027.

The OP could of left employer months or years ago and likewise stay employed there till 2026 or 2027.

Leaving, starting or staying at that employer probably isn't hard linked to activing pensions. 

IMHO I so often hear organisations, IFAs and FAs 99% of time hard linking any employment to pension stuff, I see them as ofter being very independent and hard linking them together may not achieve best results. 

Albermarle

Roy1234 said:

flaneurs_lobster said:

Roy1234 said:

My question is, after the (say) three months when the deferred work pension is paid to me, will it be backdated to the date I first applied to draw it, or not?

Generally yes, unless there is a minimum age or Normal Pension Age stipulation that is relevant and would mean that the pension can't be put into payment until this date is reached.

Thanks, I've over 55 so no age limits now.

@Albermarle - your experiences do worry me. My wife has a Scottish Widows pension to draw, a year or so back their Trust Pilot reviews gave experiences like yours; they seem better rated though now.

Were your delays with a private or a works pension? I am 'hoping' perhaps vainly that the latter are more straightforward?

It was a deferred DB employer pension ( you can not have a private DB pension).
The administrator was Mercer ( now Aptia) . I do not think my experience with this company was unique.

Your wife's pension with SW is most likely a DC pension, so a different type altogether.

Roy1234

RogerPensionGuy said:

Roy1234 said:

RogerPensionGuy said:

My guess is if the OP is above the minimum age requirement, probably 55 or maybe 50 years old, the OP can just activate the DB pension anytime, now, next month or last month and they will just process it no worries, this DB probably not linked up to the job or the DC pension.

Normally I hear people just picking a date say 3 months away, like 20DEC2025 maybe, pension will be paid in December or may be the 20JAN2026, if its paid 1st in Jan, that initial payment will include payment for Dec & Jan.

I also hear pension people may say using a persons birth date/day of the month may get the best pension value outcome.
  

You're right there's no link or age limit now applicable. Payments are backdated, seems the general view.  My retirement 'may' be at shorter notice than intended due to work circumstances, but that's TBC. My question is therefore tentative.

Re your comment on getting a better pension by retiring on a birthday, do I assume that means the annuity tables calculate on whole years and don't prorata for months? Quite crude if so in the era of AI.

Obviously do you own research and investigation on everything. 

The OP appears a bit concerned about alining leaving that employment with activating that deferred DB scheme.

Retirement just means a person has stopped working with that employer. 

The OP could of probably activated DB pension months or years ago and likewise probably activate it next year or 2027.

The OP could of left employer months or years ago and likewise stay employed there till 2026 or 2027.

Leaving, starting or staying at that employer probably isn't hard linked to activing pensions. 

IMHO I so often hear organisations, IFAs and FAs 99% of time hard linking any employment to pension stuff, I see them as ofter being very independent and hard linking them tog8may not achieve best results. 

Just to clarify something @Marcon queried, my work pension adviser was only vague as I asked him the notice question in passing, he being from the firm handling the current DC scheme, not the old DB scheme. He advised me to contact the DB scheme handlers, which I hadn't yet as this question of retirement much sooner has only just arisen.

@RogerPensionGuy - you raise a moot point about the hard linking of employment to pensions. A colleague of mine drew his DB pension whilst still working in my company, to finance his hours reduction. They could have refused this in many DB schemes (need to find docs for mine) but to what end? More likely to lose the person completely. If pension was granted with reduced working hours, he could have quit his shortened working week job once the DB pension was being paid, effectively early retirement by the back door they might have otherwise refused. If the DB scheme says no to early retirememt and the person goes anyway, will it really be withheld for the remaining X years until age 67 etc?

DRS1

Roy1234 said:

I have a deferred Final Salary pension with my current employer. The scheme was closed down over a decade ago, and replaced with a Money Purchase one, as so many schemes were.

I am considering retiring soon and drawing this deferred company pension, but not the subsequent money purchase one for now. The work pension adviser thought that (without checking) schemes generally need about 3 months notice for this. I would be retiring after one month's notice not three, so living on savings initially.

My question is, after the (say) three months when the deferred work pension is paid to me, will it be backdated to the date I first applied to draw it, or not?

You really need to check with the pension scheme.  Many have websites and a page describing how to claim your pension.  That will tell you if you need to give 3 months notice to claim and if there will be any backdating to the date of claim (Doubt it - it will probably say give x months notice IN ADVANCE).  

Bear in mind that as @Marcon said just because you have reached age 55 that won't mean you have a right to claim your pension from that age.  The DB scheme will have had a normal pension age (65?) and if you try to claim before then you will probably need someone's consent (employer and/or trustees).  And then there will be a reduction for early payment.  Worth looking to see if you can find out what that will be.

Also are you sure you can take one pension without taking the other?  If it was two different schemes with two different employers then of course you could but it is the same employer and maybe it is the same scheme.