Deferred Pension Question

I have an old deferred pension from a company I left some 28years ago. I get a statement once a year on the projected final pension etc. As of late say over the last 6 years the projected final pension has not increased but remained the same.

Before I go into writing with the company who now manages this I would like to know how I can challenge this and also if it is correct. One year I received a projection that was double what it is now but have recently received a letter saying that they had made a mistake and the figure went down again to what it was 5 years ago. Prior to the last 6 years it increased every year albeit by a small amount.

Any assistance greatly appreciated.

Comments

  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    Normally, deferred pensions increase every year by inflation or 5% whichever is the lower. This appears to be what used to happen?

    Write and ask for an explanation of the change.
    Trying to keep it simple...;)
  • dunstonh
    dunstonh Posts: 116,039
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    I have noticed a trend over the last 12 months or so where some occupational (final salary) pension statements are no longer increasing annually.

    I dealt with one two weeks ago which had a transfer value of just over £10k 4 years ago but is just over £15k now. However, the statement of income is identical to the one from four years ago. Not a penny increase in the income.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    Have the regulations changed?IIRC it was a Government requirement that deffered pensions were increased.

    You could try asking http://www.pensionsadvisoryservice.org.uk
    Trying to keep it simple...;)
  • dunstonh
    dunstonh Posts: 116,039
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    I wrote for clarification on that scheme but still awaiting a response.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • MIKELSOK
    MIKELSOK Posts: 39 Forumite
    Just had another letter today with an even further reduction in the estimate. I am very concerned and am wondering if this is something I might take up with the FSA, or other appropriate financial body.

    As a first shot I am going to write to the company concerned and get a fuller detailed explanation as to why their forecasts are going down and why they have made such a material mistake. It is now 50% of what it was after they first admitted in having made a mistake on their projection.
  • pefwin
    pefwin Posts: 24 Forumite
    MIKELSOK wrote:
    I have an old deferred pension from a company I left some 28years ago. I get a statement once a year on the projected final pension etc. As of late say over the last 6 years the projected final pension has not increased but remained the same.

    Before I go into writing with the company who now manages this I would like to know how I can challenge this and also if it is correct. One year I received a projection that was double what it is now but have recently received a letter saying that they had made a mistake and the figure went down again to what it was 5 years ago. Prior to the last 6 years it increased every year albeit by a small amount.

    Any assistance greatly appreciated.

    I'm afraid Ed's not quite correct.

    I assume that you left the scheme in approx. 1978 - 79. At this time there was no requirement to revalue pensions except the proportion of your pension relating to the GMP (the bit for contracting out of SERPS). This changed in the 1985 Social Security Act. Additionally the trustees could 'frank' your GMP increases, in essence, rolling them into your existing non GMP pensions entitlement. The administration error could be related to the fact that they did not frank when that could have. '; Anti-franking legislation was again part of the 1985 Act and related to leavers post 31/12/1984. Sorry to be the bearer of bad news.

    Additionally, if the administration is outsourced it could be connected with the change of administrators and their differing processes and quality.
  • pefwin
    pefwin Posts: 24 Forumite
    EdInvestor wrote:

    Which relates to pensions in payment not the revaluation of deferred entitlements.

    This link is ok; but again does not describe the environment as it relates to a leaving service date in the late 70's.

    http://www.sharingpensions.co.uk/leavingser.htm
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    Here's a better link on revaluation of deferred pensions

    It's quite amazing how much legislation there is on company pensions. Act after Act after Act.All supposed to improve protection for members.

    And yet hundreds of thousands of people have lost their pensions in the last few years, sometimes while still working at the same company.

    Makes you wonder. :huh:
    Trying to keep it simple...;)
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