Deferred DB pension help

Greenwindow

Thanks. From all this very useful information, it seems to me very likely the administrators have applied the current Hamsworth scheme rules, rather than the BUP pension scheme rules from the time my wife left and became a deferred member. And as far as my wife is concerned, there has been no communication for many years prior to last year's 'options' letter. 

xylophone

Let us know how you get on.

xylophone

She's due a full state pension, I'll have check if there's any mention of being contracted out there.

See my post above re Personal Tax Account and COPE.

For Rebate Derived Amount read COPE.

https://assets.publishing.service.gov.uk/media/5a7c2e95e5274a25a9140fdc/single-tier-valuation-contracting-out.pdf

She may or may not have been contracted out 1983/88 - was she a member of any contracted out scheme post 88?

https://www.barnett-waddingham.co.uk/comment-insight/blog/revaluation-for-early-leavers/

DRS1

Re COPE there is a useful post by @molerat with a link to click here.  Make sure she is logged in first
Contracting Out and State Pension Forecast question — MoneySavingExpert Forum

PensionsStuff

Not too uncommon for older Schemes to use quite wild inflationary assumptions and when you're talking about a good 30 odd years that can have a huge impact against the real values .

A £2,000 pension at leave date with real inflation average of 4% over 30 years is about 6.5k if the scheme assumed it was 5% its a good 2k more, purely as a random example 

As many others have said, answer Is in the detail, and i just hope they give you a proper one.

hyubh

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.

With those dates, there is statutory revaluation only on service from 1 January 1985, i.e. the part of pension accrued in the first two years does not get any uplift from exit by default. That said, you haven't made clear what exactly the statement of deferred benefits on leaving says. A guaranteed amount at NRA would be very unusual (if not impossible); instead, the 'entitlement' would be the value at leaving revalued according to certain defined rates.

Maybe to be 'helpful' a statement might project to NRA, but unless all revaluation is fixed rate (again, not impossible!), such a projection would be an estimate for info only. What was quoted as the pension at leaving exactly though, split between GMP and excess if applicable? And the revaluation basis, both in respect of the GMP, and the excess (will be different)...?

Speaking generally, some possible explanations:

• The 6K projection assumed fixed rate GMP, the current administrators are assuming full rate (full rate generally did not prove better, especially for someone who left in the 1980s)
• The excess (or overall pension) attracted a scheme-specific revaluation that the current administrators haven't taken account of
• The original statement assumes (a) the pension is split into GMP and excess, (b) any GMP would carry fixed rate revaluation (c) the current administrators think the pension is all excess. (Fixed rate GMP revaluation for a leaver before April 1988 was 8.5%, for the rest of the year 7.5%.) 
• As PensionsStuff says, the original statement used an inflation assumption that proved well off
• The base figures got corrupted over however many data migrations there's been since the mid-1980s and now