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

DRS1

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.

At the risk of being alarmist are you saying that

your current pension is say £10,700 

you calculate the state pension deduction as £10812

you are therefore worried that your pension will reduce to nil

or worse that you will end up paying the pension scheme £112 pa?

I am pretty sure others on here have a similar deduction - perhaps search state pension deduction or Midland Bank and see what their posts say.

As an aside are you sure about the 41.7 years figure? Is there no cap on that eg 40 years.  Do you really have 41.7 years of scheme membership all in the DB scheme?

retiredbanker1

E-mail sent - I await their reply.

retiredbanker1

DRS1 said:

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.

At the risk of being alarmist are you saying that

your current pension is say £10,700 

you calculate the state pension deduction as £10812

you are therefore worried that your pension will reduce to nil

or worse that you will end up paying the pension scheme £112 pa?

I am pretty sure others on here have a similar deduction - perhaps search state pension deduction or Midland Bank and see what their posts say.

As an aside are you sure about the 41.7 years figure? Is there no cap on that eg 40 years.  Do you really have 41.7 years of scheme membership all in the DB scheme?

No the pension figure I quoted is what I have calculated as due under the 1/80th rule.
Yes I was in full pension scheme for 41.7 years.

I am aware of Midland Bank pension clawback campaign.
I am not worried that my works pension will be wiped out.

If I give you an example say that my current pension was £15k per annum now then next year I would expect a reduction of about 25% to bring it down to around £11250 - not a million miles from my calculated figure.

Now I am under that figure so was asking will they reduce it again next year.

I know its complicated.

Marcon

Nobody here has seen your scheme rules, so waiting for a reply from the administrators is by far the best idea.

hyubh

retiredbanker1 said:

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.

EQ now administer the legacy DB part of the HSBC scheme (https://myhsbcpension.eqtpa.co.uk/).

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

There are no 'general answers'. If you are a member of the Midland section of the HSBC scheme, you need to explicitly say that.

Nevertheless, and take this with a pinch of salt from an internet anon who may or may not have worked with the data at some point, but IIRC the state pension deduction does itself have a debit (or at least, that's how Towers used to record it), so whatever proportion of your pension you lost, the SPD is reduced by the same (or at least, had its own deduction calculation). EQ should be able to confirm however.

retiredbanker1

Update

Heard back from pension provider,
When I'm eligible for State pension my works pension will reduce by approximately 16%.

So I will be left with a little more than I thought.

So for future reference  any body with a pension debit will be deducted more when state pension kicks in.

MeteredOut

retiredbanker1 said:

Update

Heard back from pension provider,
When I'm eligible for State pension my works pension will reduce by approximately 16%.

So I will be left with a little more than I thought.

So for future reference  any body with a pension debit will be deducted more when state pension kicks in.

No, not anybody. Only those whose DB scheme has an inbuilt deduction at state pension age.

Google: State Scheme Deduction (SSD) or State Pension Deduction/Offset,