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  • FIRST POST
    • jennyjj
    • By jennyjj 22nd Aug 17, 4:44 PM
    • 316Posts
    • 402Thanks
    jennyjj
    BT Pension Scheme Review: Help please.
    • #1
    • 22nd Aug 17, 4:44 PM
    BT Pension Scheme Review: Help please. 22nd Aug 17 at 4:44 PM
    Hi,

    I'm reaching out to currently active members of the BTPS for information about the review.

    I'm a deferred member and only see what little appears in the press about the upcoming review.

    However, I've had sight of an email from the head of HR, Alison Wilcox, which she sent
    To "All active members of the BTPS"
    From "Alison Wilcox, group HR director"
    Status: "For information Pensions review update"

    In that email she links away to lots of lovely explanatory documents and videos. But those links were all on BT's internal network, or at least the snipped addresses were. So, even with the email, I'm none the wiser.

    Assuming that we deferred members MIGHT be impacted by changes following the review, I ask, can any person with access to those docs, provide externally available copies, or maybe give us some insight into the contents.

    I have emailed Alison, requesting the same.
    Don't breech BT security or data confidentiality rules, of course.

    JJ
Page 5
    • jennyjj
    • By jennyjj 19th Jun 18, 11:27 AM
    • 316 Posts
    • 402 Thanks
    jennyjj
    I didn't think the lump sum was actuarially reduced. Have I got this wrong?
    Originally posted by tigerspill
    Yes. the actuarially reduced standard TFLS is 3x the actuarially reduced pension.
    • jennyjj
    • By jennyjj 19th Jun 18, 1:47 PM
    • 316 Posts
    • 402 Thanks
    jennyjj
    Yes. the actuarially reduced standard TFLS is 3x the actuarially reduced pension.
    Originally posted by jennyjj
    An FYI for BT Deferred members. I just spoke to BT Pensions. Advisor confirmed that the new actuarial reduction rates WILL apply to me as a deferred member.

    Taking mine 1 year early will mean it's (mostly) reduced by 3.4% rather than 5.1%. That's the clincher for me. Awaiting my quote, which she told me could take up to 30 days (14 has been more typical)

    The new rates are,... (forgive the formatting)

    Section B Members

    Early payment of actuarially reduced pension after age 50 effective from the 1st of June 2018.

    Pre April 09 service:
    Retirement age 50 51 52 53 54 55 56 57 58 59 60
    % reduction 26.4 24.4 22.2 20.0 17.6 15.0 12.4 9.5 6.6 3.4 0.0

    Post April 09 service:
    Retirement age 50 51 52 53 54 55 56 57 58 59 60
    % reduction 38.2 36.6 34.8 33.0 31.0 29.0 26.8 24.5 22.1 19.5 16.7

    Retirement age 61 62 63 64 65
    %reduction 13.8 10.7 7.4 3.8 0.0

    The old rates were...
    Section B 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 38.4 35.6 32.5 29.3 25.9 22.3 18.4 14.2 9.8 5.1 0

    Post April 09 service
    Retirement age 50 51 52 53 54 55 56 57 58 59 60
    % Reduction 52.5 50.4 48.1 45.7 43.1 40.4 37.4 34.3 31 27.5 23.7

    Retirement age 61 62 63 64 65
    % Reduction 19.7 15.3 10.6 5.5 0
    • tigerspill
    • By tigerspill 19th Jun 18, 4:58 PM
    • 339 Posts
    • 131 Thanks
    tigerspill
    Yes. the actuarially reduced standard TFLS is 3x the actuarially reduced pension.
    Originally posted by jennyjj
    Thanks for clarifying.
    • tigerspill
    • By tigerspill 19th Jun 18, 5:00 PM
    • 339 Posts
    • 131 Thanks
    tigerspill
    An FYI for BT Deferred members. I just spoke to BT Pensions. Advisor confirmed that the new actuarial reduction rates WILL apply to me as a deferred member.

    Taking mine 1 year early will mean it's (mostly) reduced by 3.4% rather than 5.1%. That's the clincher for me. Awaiting my quote, which she told me could take up to 30 days (14 has been more typical)

    The new rates are,... (forgive the formatting)

    Section B Members

    Early payment of actuarially reduced pension after age 50 effective from the 1st of June 2018.

    Pre April 09 service:
    Retirement age 50 51 52 53 54 55 56 57 58 59 60
    % reduction 26.4 24.4 22.2 20.0 17.6 15.0 12.4 9.5 6.6 3.4 0.0

    Post April 09 service:
    Retirement age 50 51 52 53 54 55 56 57 58 59 60
    % reduction 38.2 36.6 34.8 33.0 31.0 29.0 26.8 24.5 22.1 19.5 16.7

    Retirement age 61 62 63 64 65
    %reduction 13.8 10.7 7.4 3.8 0.0

    The old rates were...
    Section B 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 38.4 35.6 32.5 29.3 25.9 22.3 18.4 14.2 9.8 5.1 0

    Post April 09 service
    Retirement age 50 51 52 53 54 55 56 57 58 59 60
    % Reduction 52.5 50.4 48.1 45.7 43.1 40.4 37.4 34.3 31 27.5 23.7

    Retirement age 61 62 63 64 65
    % Reduction 19.7 15.3 10.6 5.5 0
    Originally posted by jennyjj

    I think I need the Section C numbers. Could I ask which number you called for this info?
    Thanks
    • jennyjj
    • By jennyjj 19th Jun 18, 5:09 PM
    • 316 Posts
    • 402 Thanks
    jennyjj
    I think I need the Section C numbers. Could I ask which number you called for this info?
    Thanks
    Originally posted by tigerspill
    I called the 0203 number, but both seem to go the same way...

    0800 731 1919
    Outside the UK
    0203 0233420

    I have the old section C numbers if you need them
    Last edited by jennyjj; 19-06-2018 at 5:14 PM.
    • tigerspill
    • By tigerspill 19th Jun 18, 6:03 PM
    • 339 Posts
    • 131 Thanks
    tigerspill
    I called the 0203 number, but both seem to go the same way...

    0800 731 1919
    Outside the UK
    0203 0233420

    I have the old section C numbers if you need them
    Originally posted by jennyjj
    Thanks for this. Have the old Section C numbers. W@W gave me a different story today from yesterday.
    • jennyjj
    • By jennyjj 19th Jun 18, 10:07 PM
    • 316 Posts
    • 402 Thanks
    jennyjj
    Thanks for this. Have the old Section C numbers. W@W gave me a different story today from yesterday.
    Originally posted by tigerspill
    Different how? Please don't say we don't get these better rates !!!

    One thing not mentioned anywhere yet are the other actuarial factors that will modify commutation rates for those who wish to take greater or lesser lump sums than the standard 3 years.

    Really itching to get my quote. Sitting behind the letter box every day like a nutty jack russell waiting for his master to come home.

    I figure they have a backlog, though some say that there's a freeze on quotes 'because of the scheme closing'
    • skycatcher
    • By skycatcher 19th Jun 18, 10:55 PM
    • 25 Posts
    • 5 Thanks
    skycatcher
    Different how? Please don't say we don't get these better rates !!!

    One thing not mentioned anywhere yet are the other actuarial factors that will modify commutation rates for those who wish to take greater or lesser lump sums than the standard 3 years.

    Really itching to get my quote. Sitting behind the letter box every day like a nutty jack russell waiting for his master to come home.

    I figure they have a backlog, though some say that there's a freeze on quotes 'because of the scheme closing'
    Originally posted by jennyjj
    If it's overdue I would chase it.... They lost my request for a quote and in the end it took 2 months to arrive last year!
    • jennyjj
    • By jennyjj 19th Jun 18, 11:40 PM
    • 316 Posts
    • 402 Thanks
    jennyjj
    If it's overdue I would chase it.... They lost my request for a quote and in the end it took 2 months to arrive last year!
    Originally posted by skycatcher
    Thanks. I chased it today, but nominally it's not overdue. Just due
    When it comes, I have the task of figuring out what reduction rates they applied. I believe i have what it takes to do that. Then sign and post.... My pen is ready and my hand is twitching.
    • skycatcher
    • By skycatcher 19th Jun 18, 11:57 PM
    • 25 Posts
    • 5 Thanks
    skycatcher
    Thanks. I chased it today, but nominally it's not overdue. Just due
    When it comes, I have the task of figuring out what reduction rates they applied. I believe i have what it takes to do that. Then sign and post.... My pen is ready and my hand is twitching.
    Originally posted by jennyjj
    It would be interesting to hear what your analysis is of the changes when you eventually get the quote. I'll be 59 in Nov this year and starting to seriously consider taking it then.
    • jennyjj
    • By jennyjj 20th Jun 18, 12:03 AM
    • 316 Posts
    • 402 Thanks
    jennyjj
    It would be interesting to hear what your analysis is of the changes when you eventually get the quote. I'll be 59 in Nov this year and starting to seriously consider taking it then.
    Originally posted by skycatcher
    Will do. Maybe watch personal messages...
    • tigerspill
    • By tigerspill 20th Jun 18, 7:22 PM
    • 339 Posts
    • 131 Thanks
    tigerspill
    Got this from BT Pensions today

    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
    • jennyjj
    • By jennyjj 2nd Jul 18, 10:21 PM
    • 316 Posts
    • 402 Thanks
    jennyjj
    It would be interesting to hear what your analysis is of the changes when you eventually get the quote. I'll be 59 in Nov this year and starting to seriously consider taking it then.
    Originally posted by skycatcher
    Got my quote today for taking it at end of month of 59th birthday (Aug)
    I can confirm that the actuarial reduction on the pre 2009 contributions will be 3.4% and reduction on post 2009 service will be 19.5% which gives me an aggregate actuarial reduction of 4.2% or about 2,100 off my lump sum 560 per year off my pension after tax, in perpetuity.... But I get to pick up that extra year of pension and get to earn interest on that and on my tfls for a year.
    That compares to aggregate 6.22% reduction under the old actuarial reduction rates. So the new rates instantly enriched me by 2% of (TFLS + all future benefits). I'd have been pi55ed if I'd started drawing before June.
    For anyone with most of service pre 2009, it would seem that the New AR rates are a very significant boost.
    I'd actually estimated to within 100 what they would be quoting me as reduced annual pension.
    It seems a no-brainer for me to commence taking it now, under my circumstances.
    I still need to decide which of the options to take, but standard terms 3x TFLS seems to be the consensus.
    The conversion rate for buying extra lump sum seems slightly changed at extra lump sum = 21.2 x reduction in annual pension, where it used to be 20.56x

    This is scheme b, by the way.
    • robin61
    • By robin61 3rd Jul 18, 11:37 AM
    • 669 Posts
    • 486 Thanks
    robin61
    Got my quote today for taking it at end of month of 59th birthday (Aug)
    I can confirm that the actuarial reduction on the pre 2009 contributions will be 3.4% and reduction on post 2009 service will be 19.5% which gives me an aggregate actuarial reduction of 4.2% or about 2,100 off my lump sum 560 per year off my pension after tax, in perpetuity.... But I get to pick up that extra year of pension and get to earn interest on that and on my tfls for a year.
    That compares to aggregate 6.22% reduction under the old actuarial reduction rates. So the new rates instantly enriched me by 2% of (TFLS + all future benefits). I'd have been pi55ed if I'd started drawing before June.
    For anyone with most of service pre 2009, it would seem that the New AR rates are a very significant boost.
    I'd actually estimated to within 100 what they would be quoting me as reduced annual pension.
    It seems a no-brainer for me to commence taking it now, under my circumstances.
    I still need to decide which of the options to take, but standard terms 3x TFLS seems to be the consensus.
    The conversion rate for buying extra lump sum seems slightly changed at extra lump sum = 21.2 x reduction in annual pension, where it used to be 20.56x

    This is scheme b, by the way.
    Originally posted by jennyjj
    I'm coming around to taking the higher starting pension in return for a semi index linked option. Scheme B. I've assumed an average CPI of 3% - it will take 11 years for the fully index linked option to catch up and for total pension paid it will take 20- years for the fully index linked option to overtake.

    I've got a large AVC and the bigger starting pension means I can use it all and have no residual maximising my tax free lump sum. The smaller starting pension means I'll have to pay tax on the residual.

    I'll get my State pension at nearly 67.

    I'm thinking that this is a good way of smoothing out the amount of revenue I have in retirement. I think I'd like a bit more when I'm younger.
    • jennyjj
    • By jennyjj 3rd Jul 18, 11:14 PM
    • 316 Posts
    • 402 Thanks
    jennyjj
    I've assumed an average CPI of 3% - it will take 11 years for the fully index linked option to catch up and for total pension paid it will take 20- years for the fully index linked option to overtake.
    Originally posted by robin61
    I never really try to model these cpi increases: Seems to me that any increase for cpi is not an increase in 'value': It's just an adjustment for the different 'currency value' we'll be working in at the end of that period of time. So long as cpi reasonably reflects inflation, then there is no 'increase' or 'catch-up' or 'overtake'. Having a portion of my pension not increasing with inflation is too risky for me to contemplate.
    Last edited by jennyjj; 03-07-2018 at 11:28 PM.
    • tigerspill
    • By tigerspill 4th Jul 18, 7:33 PM
    • 339 Posts
    • 131 Thanks
    tigerspill
    I never really try to model these cpi increases: Seems to me that any increase for cpi is not an increase in 'value': It's just an adjustment for the different 'currency value' we'll be working in at the end of that period of time. So long as cpi reasonably reflects inflation, then there is no 'increase' or 'catch-up' or 'overtake'. Having a portion of my pension not increasing with inflation is too risky for me to contemplate.
    Originally posted by jennyjj
    This is in essence exactly what I have done.
    • robin61
    • By robin61 5th Jul 18, 9:08 AM
    • 669 Posts
    • 486 Thanks
    robin61
    I never really try to model these cpi increases: Seems to me that any increase for cpi is not an increase in 'value': It's just an adjustment for the different 'currency value' we'll be working in at the end of that period of time. So long as cpi reasonably reflects inflation, then there is no 'increase' or 'catch-up' or 'overtake'. Having a portion of my pension not increasing with inflation is too risky for me to contemplate.
    Originally posted by jennyjj
    Agreed, but you have two choices one which is fully CPI linked so keeps up with CPI inflation and a second choice where the overall increases will be below CPI so diminishes in value.

    With option 1 you start with a lower pension but get bigger increases. With option 2 you start with a higher pension but get smaller increases. So it's about predicting at what stage in your retirement you are likely to be better off with option 1. If you have an idea of that you can make a more informed decision regarding whether you want more money early in retirement or more later (if you live that long).

    I found it a useful exercise and it changed my way of thinking once I had an idea where the crossover points were likely to be (making a reasonable assumption for future CPI rates). I'll probably be pushing 80 by the time I am better off and by then I'll have had my state pension for over a decade. I asked myself do I want a higher relative income at age 80 (ish) or age 58.

    I don't think there is a right or wrong answer to this it's all down to personal circumstances and what you are comfortable with.
    Last edited by robin61; 05-07-2018 at 9:16 AM.
    • jennyjj
    • By jennyjj 5th Jul 18, 9:49 AM
    • 316 Posts
    • 402 Thanks
    jennyjj
    Agreed,
    Originally posted by robin61
    I'm glad you agree that I agree
    but you have two choices one which is fully CPI linked so keeps up with CPI inflation and a second choice where the overall increases will be below CPI so diminishes in value.
    ...
    I found it a useful exercise and it changed my way of thinking once I had an idea where the crossover points were likely to be (making a reasonable assumption for future CPI rates). I'll probably be pushing 80 by the time I am better off and by then I'll have had my state pension for over a decade. I asked myself do I want a higher relative income at age 80 (ish) or age 58.

    I don't think there is a right or wrong answer to this it's all down to personal circumstances and what you are comfortable with.
    While CPI is below about 3% It's no big deal. is it? And yes, if a higher starting pension is your goal, opt 2 is a good one. But I fear even a brief period of high >7% inflation could be very destructive if about a 1/3 of my pension was not inflation proofed.
    • robin61
    • By robin61 5th Jul 18, 10:18 AM
    • 669 Posts
    • 486 Thanks
    robin61
    I'm glad you agree that I agree


    While CPI is below about 3% It's no big deal. is it? And yes, if a higher starting pension is your goal, opt 2 is a good one. But I fear even a brief period of high >7% inflation could be very destructive if about a 1/3 of my pension was not inflation proofed.
    Originally posted by jennyjj
    Well yes there is a risk involved as you rightly say if inflation is high then the crossover points will be reached more quickly. I guess like a lot of things it's also about individual attitude to risk.
    • skycatcher
    • By skycatcher 5th Jul 18, 4:32 PM
    • 25 Posts
    • 5 Thanks
    skycatcher
    I'm sure the actuaries must have a spreadsheet to model all the options and the impact of inflation... Pity we don't have access! Why should it be a secret... It's our pension and do we not employ them via the trustees?
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