Section 32 and GMP Help

Eastwaykid54 · 15 July 2018 at 7:00PM

Can some of you good folk help me understand my pension, I’ve tried my own research but feel I'm on the wrong path. Because of recent news about my health, and annual statements don’t show the with profits element, I called up the provider last week to get a pension valuation, they gave me the up to date figure but also said that as this is a GMP, things are a bit more complicated and would need one of their specialists to look at it and come back to me with options.
A letter arrived yesterday but not with the information I was seeking, it mentioned if life expectancy is less than a year, it included a serious ill health form and a lifetime allowance questionnaire, it also went on to say that the fund is showing a shortfall to support the GMP, however this shortfall would be made up by the provider, I really wanted to know what this plan will pay as an annual pension.
Provider is Clerical Medical
Its an S.32 buy out policy - unit linked
Valuation of fund as of 9/7/2018 £35996.39
Guaranteed minimum pension £5105.36
Revaluation 7.5%
Contribution date 5/11/1991
Retirement date 4/9/2019
Not a 1989 regime annuitant

Also from a statement dated February 2000 £1402.46 of the GMP will escalate at a rate of 3% per year

I hope I've provided enough info for someone to give some much needed help

Dox · 15 July 2018 at 7:25PM

If the whole pension is GMP (as your post suggests), then the pension it will pay is £5,105.36 (I presume as of now - the paperwork should tell you).

If you are in serious ill health (i.e. with less than 12 months to live), you can take the whole fund as a tax free lump sum. I very much hope this isn't the case.

Eastwaykid54 · 15 July 2018 at 9:47PM

Thanks for the reply Dox, I will be able to take the Guaranteed Minimum Pension in about a years time (4/9/2019) just wondered the relevance of the 7.5% Revaluation figure.

xylophone · 15 July 2018 at 10:18PM

http://www.financialadvice.net/s32_buy_out_plan/zone/1288

An occupational pension was transferred to the S32 buyout bond?

https://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/18/what-is-a-gmp/

You have both pre and post 88 GMP?

What was the value of the GMP at date of transfer? That is the value that must be increased by 7.5% up to GMP age (which is 60 for a female and 65 for a male).

This thread

https://forums.moneysavingexpert.com/showthread.php?t=1217859

may be of interest but "protected rights" are no more - they were converted to ordinary pension rights.

The policy will pay an annual pension, but as you can see from the above the question is when it will pay it.

Eastwaykid54 · 16 July 2018 at 12:28AM

Many thanks for your reply Xylophone, yes indeed I was in a company pension scheme from which I was made redundant, on the advice of an IFA I transferred it to a S.32
Following info is taken from the Pension Transfer Account Certificate
Annuitants Date of Birth: 4/9/1954
Normal retirement date: 4/9/2019
Annuitants status for maximum retirement cash sum: Not a 1989 regime annuitant
Service: 8/10/1979 to 31/12/1990
Maximum retirement pension: £2911.59
Maximum retirement cash sum: £6551.09
Maximum lump sum death benefit: £65170.30
Contribution date: 5/11/1991
Contribution: £7180
Investment content of contribution: £6964.60
Fixed benefit content: £6613.98
Fixed benefits: Guaranteed minimum pension: £5105.36
Revaluation: 7.5%

so from this is the GMP at time of transfer £5105 ?

xylophone · 16 July 2018 at 8:18AM

See post 8 in the thread linked above.

As you can see, what is required for an accurate calculation is the pre 88 GMP, post 88 GMP and excess at date of transfer to CM.

It would appear that the £5105.36 is the GMP revalued to age 65 but you should check this with CM.

It would appear (but again check with CM) that in view of the low growth of the investments, you will receive only the GMP as an annual pension at age 65 with no lump sum option.

Once in payment, the post 88 part of the GMP will increase by up to 3% annually.

Have you obtained a new state pension statement?

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

Eastwaykid54 · 16 July 2018 at 8:39AM

Thanks again Xylophone,I'll put a call into CM and let you know what they say

xylophone · 16 July 2018 at 12:05PM

Thanks again Xylophone,I'll put a call into CM and let you know what they say

I'll be interested to know and it adds to the pool of knowledge for other posters.

Section 32 and GMP Help

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