DB Pension Contracted Out - Work pension reduction after receiving state pension

retiredbanker1

I am after some thoughts here please.

I was in a Final salary pension scheme - contracted out for most of the 40 years.
Not going to get state pension for another 12 months but trying to work out my finances to plan ahead.

I was subject to a pension debit - roughly 25% after divorce - so pension amount received is a quarter less than if I had not divorced.

I am aware next year that my works pension will reduce once the state pension kicks in. I think I understand the 1/80th rule about how much my works pension should reduce by.

However my question is this - my salary at retirement was say £x.
When I work out how much I think the works pension will be it seems similar to what I get now.

How do pension trustees treat pension debits after divorce?

Will they just work it out on my final salary received as at date of retirement or will they take into account the pension debit?

(i.e. will they adjust my final salary down to take into account of the debit?)

Is there a minimum pension they must pay me?

DRS1

Your heading doesn't seem to bear much relation to your actual question.

The pension debit is set against your pension not your final salary.

If the pension you are getting does not reflect the pension debit does the scheme actually know about the debit and has everything been done for it to be enforced - court order made, fees paid?

Are you actually asking how the pension debit operates when there is a later deduction from your pension for the state pension deduction?

retiredbanker1

Sorry if I was not clear.
Yes the pension debit has been enforced since my retirement.

What I am asking is will they reduce my pension again in 2026 by simply reducing it when state pension kicks in OR will they calculate the reduction based on my final salary in 2020? (Using 1/80?)

If they work it on final salary then I expect little or no reduction as I'm already on 25% less monthly pension already.

Hope this is clearer and thanks for your reply.

Cobbler_tone

Very confusing post to interpret. If it is a PSO then your ex may effectively have her own slice of the pension at her choosing and you may have yours.
As for your works pension reducing when the state pension kicks in, this suggests you have a bridging pension in payment?

Waving a finger in the air!!  

retiredbanker1

Cobbler_tone said:

Very confusing post to interpret. If it is a PSO then your ex may effectively have her own slice of the pension at her choosing and you may have yours.
As for your works pension reducing when the state pension kicks in, this suggests you have a bridging pension in payment?

Waving a finger in the air!!  

Sorry to confuse. Pension debit has already taken place and I was aware of it before retiring. 25% of my pension pot was transferred to her pension scheme - that is all done and dusted.

I don't know what a bridging pension is?

leosayer

Have you asked the pension administrator?

They should tell you what the state pension reduction will be. 

I don't think your pension sharing order will have any bearing on this.

NoMore

The devil is in the detail when it comes to pensions and unfortunately you are assuming everyone knows the details that's what's making your post hard for people to understand. It's not really your fault if this is your only pension, you wouldn't necessarily know that not all pensions are the same.

 A bridging pension is a pension which pays out a higher amount before state pension age and then reduces when you receive the State pension, giving you a consistent total income throughout the years. Is this what your pension does ? Not all do.

xylophone

By State Pension Reduction do you mean  that your scheme operates clawback/integration?

https://www.pensionbee.com/uk/pensions-explained/pension-rules/what-is-pension-clawback

Example
https://www.midlandclawbackcampaign.co.uk/history/

retiredbanker1

xylophone said:

By State Pension Reduction do you mean  that your scheme operates clawback/integration?

https://www.pensionbee.com/uk/pensions-explained/pension-rules/what-is-pension-clawback

Example
https://www.midlandclawbackcampaign.co.uk/history/

Yes exactly this.

I was going to get in touch with Tower Willis but wondered if anybody here had been in a similar position - bearing in mind I am already on a reduced pension because of pension debit.

retiredbanker1

To give some more context my salary when I retired was £20743.

So using the 1/80 calculation gives me 20743 x 41.7(years worked) =864,983 divide by 80 to give pension of £10,812

My actual pension now is slightly under this amount.

So generally speaking will my pension get reduced again next year when I receive state pension or because my actual pension is under the amount calculated above, will the deduction not happen??

Only looking for general answers from someone who perhaps has gone through this.

Marcon

retiredbanker1 said:

To give some more context my salary when I retired was £20743.

So using the 1/80 calculation gives me 20743 x 41.7(years worked) =864,983 divide by 80 to give pension of £10,812

My actual pension now is slightly under this amount.

So generally speaking will my pension get reduced again next year when I receive state pension or because my actual pension is under the amount calculated above, will the deduction not happen??

Only looking for general answers from someone who perhaps has gone through this.

Why - apart from the wholly understandable  'because it'll take ages to get an answer from the administrators...'? Wouldn't it be better to wait for an accurate answer from them so you know where you stand? General answers and war stories from other people aren't going to provide that, and could seriously mislead you.