BT Pension Retirement Statement

mbee123 wrote: »

Just received the below, this helps me understand the fairly high figure after deductions for taking pension early, reduction factor is a lot lower than my other scheme (TATA) which is around 4% per year.

GMP
Retirement age 50 51 52 53 54 55 56 57 58 59 60
% reduction 12.1 11.3 10.4 9.4 8.4 7.2 6.0 4.7 3.2 1.7 0.0


Post April 09 service:

Retirement age 50 51 52 53 54 55 56 57 58 59 60
% reduction 41.9 40.1 38.2 36.2 34.1 31.8 29.4 26.9 24.3 21.4 18.4

tigerspill wrote: »

New Sec. C reduction rates below. Got these in June.

Section C Members

Early payment of actuarially reduced pension after age 50

Pre April 09 service:

Retirement age 50 51 52 53 54 55 56 57 58 59 60
% reduction 30.9 28.6 26.1 23.5 20.7 17.8 14.7 11.4 7.8 4.0 0.0


Post April 09 service:

Retirement age 50 51 52 53 54 55 56 57 58 59 60
% reduction 41.9 40.1 38.2 36.2 34.1 31.8 29.4 26.9 24.3 21.4 18.4

Retirement age 61 62 63 64 65
%reduction 15.2 11.8 8.1 4.2 0.0

Unless I've mis-understood these two reduction tables posted in this thread have different rates for per-2009 service...…? The quote I've had also seems to be even lower still..... I am awaiting my response from BT Pensions quite eagerly

robin61 wrote: »

If you are 51 and your service is all pre 2009 you are only concerned with the first lot of figures the second lot are for post 2009 service. So according to this table there will be a reduction of 28.6% for taking your pension at age 51. It's worked out on a daily basis but this gives you a very good idea of the amount of pension you are giving up in order to get it 9 years before your normal retirement age.

Yes I do understand this. My query is that mbee123 seemed to have quoted a different reduction rate for pre 2009 reductions with a figure of 11.3% for someone of 51 rather than the 28.6% Tigerspill posted.
In another twist on this, the formal quote I received for taking my pension in October at the age of 51 only has a 6% reduction applied to it.
I have queried this over the phone and obviously went to the call centre whose response was 'it is reduced by 6% because you are taking it early'. I don't think they quite understood that my question was around why it was such a small reduction. I am now awaiting a reply to an email that I have sent querying the quotation.

robin61 wrote: »

The figures were revised in June 2018 and I think Tigerspill got those recently. There is no way that you will get only a 6% reduction at age 51. And there is no way that the figures will be 11.3% either. Why don't you ask the administrators to send you the tables and then you can be assured When I asked them for scheme B figures I got them the same day.

Something is wrong somewhere. What have you received that leads you to believe that you are being quoted only a 6% reduction ?

By the way the set of figures that mbee posted look like they refer to GMP ? Isn't that guarantee minimum pension. If it is then that's not what we've been talking about here and probably not relevant to you. So I would ignore.

I have asked for the reduction figures and details of what my pension would be at age 60. I think I must have missed something fundamental in how the pension is calculated at age 60.
I thought is was straightforward for a Section C member 'years service/60 x final salary'?
I have 20 years service (OK 19 years and 350 days) and my final salary on leaving in 2008 was £44,430.which by my estimation gives a pension of £14,810 (give or take a few pounds for the few days).
The quote I received for retiring on 18th October 2018 at age 51 gives me a standard scheme pension of £14,004.51 with no lump sum.
Whilst I wait for BT pensions to come back to me if anyone can shed any light on what I've missed in all this I would be grateful.

robin61 wrote: »

I

Since you left your pension has been index linked to RPI. So if you wait until your normal retirement age of 60 your pension will be a lot higher than the original £14810 i.e. 20/60ths of your final salary when you left BT.
So you are wrongly comparing the figure you have been given which has had the benefit of index linking with the figure you thought you would get at 60.

Thank you

That makes sense, I did wonder if there was something like this as it was the only thing that made sense. Have now seen it in the handbook - don't know why I missed it.
<<heads off to get eyes tested>>

tigerspill wrote: »

New Sec. C reduction rates below. Got these in June.

Section C Members

Early payment of actuarially reduced pension after age 50

Pre April 09 service:

Retirement age 50 51 52 53 54 55 56 57 58 59 60
% reduction 30.9 28.6 26.1 23.5 20.7 17.8 14.7 11.4 7.8 4.0 0.0

These figures are much better than the equivalent LGPS ones. For example, at age 55 there is a reduction of 24% compared to 14.7% at BT. I am not sure how that can be justified since both are supposed to be actuarialy neutral.