Deferred DB pension help

Greenwindow

Hi, I'm new here and could do with some help with a small and ancient defined benefit pension from a company my wife worked for between 1983 and 88, which was long ago taken over by a larger company with outsourced pension admin. She received a letter a year or so ago laying out her options for a £2,500 DB pension starting at age 65. Amazingly, she had filed away a copy of a letter from from the original company from 1988, listing her deferred benefit ("entitlement" was the word used in the letter) - which was a £4,000 p.a. pension starting at age 60. She wrote to the pension admin enclosing a copy of the letter and suggesting the company should have contacted her a few months ahead of her 60th birthday and laid out the options for her retirement then. She added that the letter used the term "entitlement" and that she expected the annual sum to be £4,000 as the letter stated. Ten months later, the pension admin company wrote back and say the 1988 letter was estimated using an assumption not in line with the scheme rules. And that while the pension could have been paid out at 60 on request, it cannot be backdated beyond the date of their 'options' letter last year. They did, however, revalue the pension to £3,000 p.a.
Surely they cannot have changed her normal retirement age from 60 to 65 without telling her? Similarly, can they change the deferment terms of her old pension without informing her?
It's always been my understanding that under TUPE rules, employees keep their original employment terms after a takeover. Does the same apply for deferred DB pension fund members?

It's not a life changing amount of money, but I think the pension administrators are having a laugh. Thanks, in advance, for your help

QrizB

Welcome to the forum.

A lot is going to depend on what the scheme rules say. Can you name the original employer? Someone here might be familiar with the scheme and its rules.

Greenwindow

It was Bristol United Press

xylophone

This?

Bristol United Press (Historical Newspaper Group)

• Legacy: The original Bristol United Press was a company that owned local newspapers, including the Western Daily Press.
• Evolution: This newspaper business eventually transitioned, with its assets and name being used by different entities over time, leading to the modern university press. 

The "Bristol United Press Pension Scheme" (UBPAS) refers to the University of Bristol Pension and Assurance Scheme, a defined benefit (final salary) scheme that closed to new accrual for many staff around 2016, transitioning them to other schemes like the Universities Superannuation Scheme (USS) or University of Bristol Group Personal Pension (UBGPP), with administrators like Barnett Waddingham managing queries for deferred UBPAS members. If you're looking for details about your pension, contact the administrators via their website ubpas.co.uk or by calling 0333 11 11 222 for information on your benefits from the closed UBPAS fund. 

But is your wife's pension now part of some other scheme and if so which?




Your wife has her statement of benefits on Date of Leaving the scheme. Does she have her copy of the Scheme Guide?

Was she advised when she left that it was her responsibility to advise the Trustees of any change of circumstances and to claim the pension at NRD?

Does the statement show

 Guaranteed Minimum Pension


Excess over GMP.



What is your wife's DoB?

With regard to the NRD, as I understand it, changes to a pension scheme that diminish benefits a member has already earned (accrued rights) are prohibited. The right to a pension at a specific Normal Retirement Date, without actuarial reduction, is typically considered an accrued right for benefits built up to that point.




 BUT the trust deed and rules of the pension scheme are the definitive documents that outline the powers of the trustees and the rights of members. The rules may contain specific powers of amendment, but these must be exercised lawfully and usually cannot override statutory protections for accrued benefits.

Marcon

Greenwindow said:

Hi, I'm new here and could do with some help with a small and ancient defined benefit pension from a company my wife worked for between 1983 and 88, which was long ago taken over by a larger company with outsourced pension admin. She received a letter a year or so ago laying out her options for a £2,500 DB pension starting at age 65. Amazingly, she had filed away a copy of a letter from from the original company from 1988, listing her deferred benefit ("entitlement" was the word used in the letter) - which was a £4,000 p.a. pension starting at age 60. She wrote to the pension admin enclosing a copy of the letter and suggesting the company should have contacted her a few months ahead of her 60th birthday and laid out the options for her retirement then. She added that the letter used the term "entitlement" and that she expected the annual sum to be £4,000 as the letter stated. Ten months later, the pension admin company wrote back and say the 1988 letter was estimated using an assumption not in line with the scheme rules. And that while the pension could have been paid out at 60 on request, it cannot be backdated beyond the date of their 'options' letter last year. They did, however, revalue the pension to £3,000 p.a.
Surely they cannot have changed her normal retirement age from 60 to 65 without telling her? Similarly, can they change the deferment terms of her old pension without informing her?
It's always been my understanding that under TUPE rules, employees keep their original employment terms after a takeover. Does the same apply for deferred DB pension fund members?

It's not a life changing amount of money, but I think the pension administrators are having a laugh. Thanks, in advance, for your help

Ten months...?

If I were your wife, I'd go back and complain about:

• the lack of contact before her 60th birthday, confirming her options [it may be that the onus was on her to contact them, and/or they didn't have her current address, so beware getting too stroppy on the point. She should have been receiving something called a Summary Funding Statement on a roughly annual basis for some years unless the scheme was exempt - if it had fewer than 100 members, say - and if they had issued this to an old postal address and had the correspondence returned, she's not blameless!]
• the delay in responding to her letter (assuming she hadn't been sent any 'holding' letters in the meantime explaining why it would be a while before they could answer)
• what appears to be an increase to her Normal Retirement Age long after she became a deferred member of the scheme in 1988.

The area where she can certainly ask, but is unlikely to succeed, is the level of pension she'll be paid. In 1988 it was common for schemes to provide leaving service statements which assumed, and showed, that the pension revalued at the maximum statutory level (because inflation was never, ever going to drop below those levels...). The reality was something else, and although the statement refers to entitlement, it is entitlement to 'a pension from the scheme' - and somewhere in the paperwork she received back in the day was the necessary disclaimer that the Trust Deed & Rules would override anything and everything else.

I would also ask for a copy of the scheme's Internal Dispute Resolution Procedure in case she needs to use it - but don't do that until the administrators have had a reasonable chance to reply. The fact a member has asked for the IDRP indicates that they are serious about their complaint and often sparks a speedier response than might otherwise be the case.

Greenwindow

It was the local newspaper group, taken over by the Daily Mail Group in 1999, long after she left. It looks as if the scheme is now part of the Harmsworth pension fund. She doesn't have BUP pension scheme rules. There is no mention in the letter of her having to claim her pension. It does say she is entitled to £4,000 a year at age 60, a spouse's pension if she predeceases me, a cash sum if she had died before age 60 and the option of a defined lump sum at 60, which would result in reduction of pension. She was born in March 1961

Greenwindow

thank you both for your help. I'll go back to the pension admins

xylophone

Is a GMP shown on the statement of deferred benefits?

It is very likely (though not certain) that the scheme was contracted out of SERPS.

Was she a member of any contracted out scheme between 1988 and 2016?

Does she have a personal tax account?

https://www.gov.uk/personal-tax-account

https://forums.moneysavingexpert.com/discussion/comment/81788339/#Comment_81788339

Click here https://www.tax.service.gov.uk/check-your-state-pension/account/cope whilst logged into your tax account and you will see how your 2016 new scheme starting amount was affected by contracting out. 

Has your wife obtained a State Pension Forecast?

https://www.gov.uk/check-state-pension

Which firm currently administers the scheme?

DRS1

Does the scheme have some sort of website or online portal (for which she may have to register)?  That might have useful links or information on it (perhaps not a link to the rules though).  It may have copes of old correspondence sent to her about any changes.  It may also have  a way to contact the administrators which may be quicker than writing a letter (especially at Christmas).

Greenwindow

Thanks again for all the help. I've no idea if the BUP scheme was contracted out, I'll check. She has registered for the portal with administrator Barnett Waddingham, but last we looked there was no backdated correspondence. I'll look again. She's due a full state pension, I'll have check if there's any mention of being contracted out there.
One question: In terms of companies that have been taken over, is it normal for deferred DB pensions to be governed by the rules of the scheme at the time gtghe pension was deferred, or the rules of the scheme that took it over in later years?

Marcon

Greenwindow said:

Thanks again for all the help. I've no idea if the BUP scheme was contracted out, I'll check. She has registered for the portal with administrator Barnett Waddingham, but last we looked there was no backdated correspondence. I'll look again. She's due a full state pension, I'll have check if there's any mention of being contracted out there.
One question: In terms of companies that have been taken over, is it normal for deferred DB pensions to be governed by the rules of the scheme at the time gtghe pension was deferred, or the rules of the scheme that took it over in later years?

The rules which apply to a member are those in force at the time they leave the scheme, whether as a 'deferred' member (one with a pension payable at some future date) or as a pensioner. Although it is sometimes possible to slightly 'reshape' the benefits (ie provide the same overall value in slightly different way, usually for administrative simplicity/member understanding reasons), any changes to the rules which would result from a scheme merger would only relate to future service - and then only after any relevant consultation/communication processes have been followed. 

Greenwindow said:

It's always been my understanding that under TUPE rules, employees keep their original employment terms after a takeover. Does the same apply for deferred DB pension fund members?

TUPE doesn't usually cover pensions, unless employees have a contractual right to a certain level of contribution to a defined contribution pension plan. See my answer immediately above re deferred DB members.