FAS (PPF) May Start Offering Inflation Increases on Pensions Prior to 1997

Marcon

westv said:

Marcon said:

Kryten_the_Titan said:

westv said:

Just got an email today from the FAS to say that there was an announcement about pension inflation increases (capped at 2.5%) for service prior to 1997. I have no idea if I will benefit (all mine was prior to 97) or if it will just be future members when they reach pension age.

I wanted to thank original poster here as this is how I found out about this possible change to pre-'97 indexation for PPF/FAS members.

It brings me some hope.  The first 11 years of my working career was in to a DB scheme which ended up in the PPF, 90% of which was pre-'97.  To hear that legislation is being discussed in parliament now and next year in order to give PPF/FAS members indexation up to 2.5% (where their original pension scheme give pre-'97 indexation), gives hope to a better outcome in retirement.

Unfortunately it will give false hope to a lot of people who were in a scheme which didn't give pre-97 indexation....

Are there many? I can't imagine many older DB wouldn't have had inflation increases when in payment but that is just my guess.

Plenty! There was no statutory requirement to provide such increases, and sponsoring employers didn't rush to increase their already-hefty liabilities.... https://www.lexisnexis.co.uk/legal/news/government-confirms-no-change-to-pre-1997-defined-benefit-pension-indexation

Where schemes have already been 'bought out' with insurance companies, the benefits will secured will be on the basis of those promised at the time of the buy out. The insurers aren't going to pay out any more than that.

westv

Marcon said:

westv said:

Marcon said:

Kryten_the_Titan said:

westv said:

Just got an email today from the FAS to say that there was an announcement about pension inflation increases (capped at 2.5%) for service prior to 1997. I have no idea if I will benefit (all mine was prior to 97) or if it will just be future members when they reach pension age.

I wanted to thank original poster here as this is how I found out about this possible change to pre-'97 indexation for PPF/FAS members.

It brings me some hope.  The first 11 years of my working career was in to a DB scheme which ended up in the PPF, 90% of which was pre-'97.  To hear that legislation is being discussed in parliament now and next year in order to give PPF/FAS members indexation up to 2.5% (where their original pension scheme give pre-'97 indexation), gives hope to a better outcome in retirement.

Unfortunately it will give false hope to a lot of people who were in a scheme which didn't give pre-97 indexation....

Are there many? I can't imagine many older DB wouldn't have had inflation increases when in payment but that is just my guess.

Plenty! There was no statutory requirement to provide such increases, and sponsoring employers didn't rush to increase their already-hefty liabilities.... https://www.lexisnexis.co.uk/legal/news/government-confirms-no-change-to-pre-1997-defined-benefit-pension-indexation

Where schemes have already been 'bought out' with insurance companies, the benefits will secured will be on the basis of those promised at the time of the buy out. The insurers aren't going to pay out any more than that.

Behind a paywall. The headline is a bit of date though. Presumably withing the body of the article, it provides information on how many (or what percentage of) pre 97 DB schemes offered inflation increases.

Edit: Thinking about it, if there was a large number then the Government probably wouldn't have even considered changing the rules I expect!

Marcon

westv said:

Marcon said:

westv said:

Marcon said:

Kryten_the_Titan said:

westv said:

Just got an email today from the FAS to say that there was an announcement about pension inflation increases (capped at 2.5%) for service prior to 1997. I have no idea if I will benefit (all mine was prior to 97) or if it will just be future members when they reach pension age.

I wanted to thank original poster here as this is how I found out about this possible change to pre-'97 indexation for PPF/FAS members.

It brings me some hope.  The first 11 years of my working career was in to a DB scheme which ended up in the PPF, 90% of which was pre-'97.  To hear that legislation is being discussed in parliament now and next year in order to give PPF/FAS members indexation up to 2.5% (where their original pension scheme give pre-'97 indexation), gives hope to a better outcome in retirement.

Unfortunately it will give false hope to a lot of people who were in a scheme which didn't give pre-97 indexation....

Are there many? I can't imagine many older DB wouldn't have had inflation increases when in payment but that is just my guess.

Plenty! There was no statutory requirement to provide such increases, and sponsoring employers didn't rush to increase their already-hefty liabilities.... https://www.lexisnexis.co.uk/legal/news/government-confirms-no-change-to-pre-1997-defined-benefit-pension-indexation

Where schemes have already been 'bought out' with insurance companies, the benefits will secured will be on the basis of those promised at the time of the buy out. The insurers aren't going to pay out any more than that.

Behind a paywall. The headline is a bit of date though. Presumably withing the body of the article, it provides information on how many (or what percentage of) pre 97 DB schemes offered inflation increases.

Edit: Thinking about it, if there was a large number then the Government probably wouldn't have even considered changing the rules I expect!

It was the article summary I was flagging - it's recent and an authoritative source. Longer article here if you're interested: https://www.pensionsage.com/pa/SPP-warns-against-blanket-pre-1997-pension-increases.php

There's been a load of nonsense talked about 'defective' legislation with a 'loophole' meaning that some pensioners don't get increases to their pre-97 pension, and that the 'easy remedy' is to change the law. Completely overlooks the cost to the sponsoring employers of this 'remedy' - and the fact that pensioners are getting the pension they were promised at the time they were building up benefits in the scheme.

westv

Marcon said:

westv said:

Marcon said:

westv said:

Marcon said:

Kryten_the_Titan said:

westv said:

Just got an email today from the FAS to say that there was an announcement about pension inflation increases (capped at 2.5%) for service prior to 1997. I have no idea if I will benefit (all mine was prior to 97) or if it will just be future members when they reach pension age.

I wanted to thank original poster here as this is how I found out about this possible change to pre-'97 indexation for PPF/FAS members.

It brings me some hope.  The first 11 years of my working career was in to a DB scheme which ended up in the PPF, 90% of which was pre-'97.  To hear that legislation is being discussed in parliament now and next year in order to give PPF/FAS members indexation up to 2.5% (where their original pension scheme give pre-'97 indexation), gives hope to a better outcome in retirement.

Unfortunately it will give false hope to a lot of people who were in a scheme which didn't give pre-97 indexation....

Are there many? I can't imagine many older DB wouldn't have had inflation increases when in payment but that is just my guess.

Plenty! There was no statutory requirement to provide such increases, and sponsoring employers didn't rush to increase their already-hefty liabilities.... https://www.lexisnexis.co.uk/legal/news/government-confirms-no-change-to-pre-1997-defined-benefit-pension-indexation

Where schemes have already been 'bought out' with insurance companies, the benefits will secured will be on the basis of those promised at the time of the buy out. The insurers aren't going to pay out any more than that.

Behind a paywall. The headline is a bit of date though. Presumably withing the body of the article, it provides information on how many (or what percentage of) pre 97 DB schemes offered inflation increases.

Edit: Thinking about it, if there was a large number then the Government probably wouldn't have even considered changing the rules I expect!

It was the article summary I was flagging - it's recent and an authoritative source. Longer article here if you're interested: https://www.pensionsage.com/pa/SPP-warns-against-blanket-pre-1997-pension-increases.php

There's been a load of nonsense talked about 'defective' legislation with a 'loophole' meaning that some pensioners don't get increases to their pre-97 pension, and that the 'easy remedy' is to change the law. Completely overlooks the cost to the sponsoring employers of this 'remedy' - and the fact that pensioners are getting the pension they were promised at the time they were building up benefits in the scheme.

Nobody here was suggesting a blanket change in pre 97 indexation. My original question queried how many DB schemes offered inflation increases for pre 97 service irrespective of legislation at the time