Zero revaluation for Non-GMP?

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DEFERREDPENS
DEFERREDPENS Posts: 12 Forumite
in Pensions, annuities & retirement planning
I have been advised by the pension trustees of a former employer that the non-GMP element of my employment, as it was before 1985, will not be increased at all since my leaving date in 1984.
This doesn't seem fair - Is this correct?

Thank you for any advice

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  • hugheskevi
    hugheskevi Posts: 3,858 Forumite
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    I have been advised by the pension trustees of a former employer that the non-GMP element of my employment, as it was before 1985, will not be increased at all since my leaving date in 1984.
    Statutory revaluation of non-GMP deferred pensions was introduced by Social Security Act 1985 and applies to pension accrued after 1 January 1985, applying to those who left the scheme on or after 1 Janauary 1986. Prior to this, there is no statutory entitlement to revaluation of pension in excess of GMP.
    This doesn't seem fair
    You are being provided with the pension you were contractually promised, in accordance with legislation.
    Is this correct?
    Unless the Trust Deed promises more than statutory minimum (which is very unlikely given the information you have been provided with), yes.
  • xylophone
    xylophone Posts: 44,418 Forumite
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    https://www.barnett-waddingham.co.uk/comment-insight/blog/2012/07/24/revaluation-for-early-leavers/
  • zagfles
    zagfles Posts: 20,323 Forumite
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    On the positive side, if your scheme uses fixed revaluation for the GMP (most seem to) then you'll be getting 8.5% compound on the GMP, which is massively above inflation.
  • xylophone
    xylophone Posts: 44,418 Forumite
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    But the company will have no obligation to increase the pre 88 GMP in payment.
  • brewerdave
    brewerdave Posts: 8,508 Forumite
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    xylophone wrote: »
    But the company will have no obligation to increase the pre 88 GMP in payment.


    ....and in my experience most don't :(
  • xylophone
    xylophone Posts: 44,418 Forumite
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    .
    ..and in my experience most don't

    Quite so, but for many of those in this situation, inflation protection is provided through the old State Pension - by no means all however, and of course with the New State Pension, the link is completely broken.
  • zagfles
    zagfles Posts: 20,323 Forumite
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    xylophone wrote: »
    .

    Quite so, but for many of those in this situation, inflation protection is provided through the old State Pension - by no means all however, and of course with the New State Pension, the link is completely broken.
    It's also broken in that revaluation of the GMP doesn't reduce the additional state pension, so again it's swings and roundabouts. Getting 8.5% revaluation for 30-35 years and then getting zero indexation in payment for 25 years or so could be a better deal than getting inflation revaluation & indexation in payment.
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