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  • FIRST POST
    • Nomercer
    • By Nomercer 7th Apr 18, 7:58 PM
    • 5Posts
    • 0Thanks
    Nomercer
    No GMP indexation - really?
    • #1
    • 7th Apr 18, 7:58 PM
    No GMP indexation - really? 7th Apr 18 at 7:58 PM
    From 1979 to 1985 I paid into a private sector index linked defined benefit pension scheme and was contracted out of SERPs. I am retiring after April 2016. The pension documentation makes no mention of any part of the indexation being dependent on a third party such as the government so it was an unwelcome surprise when the pension administrators advised me late last year that the GMP part of this pension will not be index linked.
    1 Was I miss sold the pension in 1979 given there was no mention of GMP, government paid indexation etc?
    2 How can one party to a contract unilaterally downgrade the contract without even informing the other party?
    3 Does the pension administrator not have a duty of care to communicate significant changes to their customers?
    My apologies if this has been covered before, but I cant find answers to these questions.
Page 2
    • Dox
    • By Dox 10th Apr 18, 9:37 PM
    • 938 Posts
    • 719 Thanks
    Dox
    GMP equalisation has been rumbling around for years but successive governments have made pronouncements about taking remedial action and then put it into the 'too difficult' pile. Any legal ruling will be more than a tad interesting!

    What is often overlooked is the fact that (depending on how a particular scheme revalues the GMP) that the GMP element of a final salary pension revalues in deferment (i.e. the time between the member leaving active membership of the scheme and their pension coming into payment) at a higher rate than the rest of the pension. You never hear any mention of that when people start complaining they were 'missold' their pension, but given how technical the point is, that's no surprise - but you do wish the media, and indeed the schemes themselves, would ensure people had adequate information presented in a way they stand a sporting chance of understanding.
    • hyubh
    • By hyubh 10th Apr 18, 11:55 PM
    • 2,256 Posts
    • 1,738 Thanks
    hyubh
    The idea of a GMP must have been a good idea when it was introduced, but now many pensioners seem to suffer from lower increases and inequality when their pension includes an element for GMP.
    Originally posted by dampsquib
    This ignores (a) revaluation between leaving and GMP age (b) the government's (generous) 'transitional' treatment for public sector scheme members' with a GMP, who are the biggest number of people as a class that would otherwise be affected.

    As GMP still kicks in at 60 for women, they start to receive lower occupational pension rises than men of the same age, until men also become entitled to GMP at 65. There's a case going to court this year in an attempt to establish if this inequality needs to be tackled by pension schemes.
    More complicated than it may first appear, since GMPs were (are) calculated relative to the number of qualifying years required for a 'full' state pension. Since women's SPA was historically five years before men's, their number of qualifying years was lower, and their GMP accruals consequently affected. Put another way: when a scheme does enter a GMP equalisation exercise, at what point GMPs are equalised makes a crucial difference to the end result.

    The legal case was first mooted by the union at Lloyds, but I gather the union, Lloyds, and their pension scheme trustees are now jointly seeking a legal ruling.
    IMO, if Brexit has any use (I'm a 'soft Remainer, so let's accept the result and get on with it'-type person if it helps!), it will quietly put this issue to pasture, notwithstanding my professional interests for GMP issues to run and run (I work in pensions)...
    • Billopp
    • By Billopp 14th Jul 18, 8:55 PM
    • 34 Posts
    • 8 Thanks
    Billopp
    I have only just seen this Forum about GMP indexation. It is a subject that I know something about.
    I am going to start at when contracting out started and what Bbarbara Castle said when she was putting it through Parliament in HC Deb 18 March 1975 vol 888 cc1486-583
    1486

    Order for Second Reading read. 4.46 p.m.

    The Secretary of State for Social Services (Mrs. Barbara Castle) I beg to move, That the Bill be now read a Second time.
    https://api.parliament.uk/historic-hansard/commons/1975/mar/18/social-security-pensions-bill

    Her are her words

    I will explain the division of responsibility between the State scheme and the private schemes.
    Once pensions have been put into payment, [B]responsibility for increasing both the basic and additional components to take account of inflation will fall to the State scheme even where a pensioner is receiving some or all of the additional component from his occupational scheme.

    As you
    can see nothing can be clearer. When contracting out started in 1978 the occupational pension scheme onl had to provide the element of pension without any indexation. This is known as GMP

    Then in 1986 Norman Fowler announced to Parliament a change to GMP indexation which stated the following to take place in 1988 which is now known as post 1988 GMP. If you read the note below you will see that he said, "but if inflation goes above 3 per cent., the state will fully inflation-proof over 3 per cent. a year" again nothing can be clearer.

    If you then fast forward to 2004 and have a look at a DWP booklet .NP46

    Hansard
    Interpretation
    HC Deb 15 April 1986 vol 95 cc748-92



    If you then fast forward to 2004 and have a look at a DWP booklet .NP46 "A guide to state pensions dated April 2004 http://www.pensions-advice.me.uk/pdf/np46/np46apr04.pdf
    and look at page 51 and 52

    Protection against inflation

    Each year the part of your pension earned from 6 April 1978
    that replaces additional State Pension will be reviewed to ensure that
    it is protected against inflation.
    Occupational pensions built up before 6 April 1988 will have all the
    increases needed to keep up with inflation added directly to your
    additional State Pension.
    Occupational pensions built up from 6 April 1988 to 5 April 1997
    and personal pensions built up from 6 April 1987 to 5 April 1997, will
    be at least partly protected by the scheme. The rate of increase will
    be 3%, or equal to the rate of inflation if this is less. The rate of your
    additional State Pension will be increased by any amount that
    inflation goes up above 3%.

    Again nothing can be clearer. The last booklet NP 46 was dated August 2008 and if you look at it on the web you will see that it no longer included the wording about GMP indexation being added to the state pension.

    NP 46A detailed guide to
    State Pensions for
    advisers and others
    August 2008
    Part of the Department for Work and Pensions
    https://www.taxation.co.uk/files/np46-guide-to-state-pensions.pdf


    Up until then the DWP were happy to say that part or all of a persons GMP indexation was payable via the state pension

    When the coalition Government was formed it was decided to change the state pension

    Green paper "A state Pension for the 21st century" Consultation document issued 4 April 2011
    . No mention of loss of GMP increases.

    Pensions Bill MP's Information pack issued 19 May 2011 which mentioned that GMP increases were paid with the state pension under the existing system. No mention that GMP indexation was not going to be paid via the new state pension.to people reaching pension age on and after 6 April 2016/7

    Pensions Bill 2011


    MPs!!!8217; information pack
    To be read in conjunction with the Pensions Bill, as read for a first time
    in the House of Commons on 27 April 2011, and accompanying
    Explanatory Notes
    Version One
    http://webarchive.nationalarchives.gov.uk/20110601202012/http:/www.dwp.gov.uk/docs/pensions-bill-mpip.pdf

    If you read pages 18 to 20 which mentions the old system for working out GMP indexationex

    page 20 paragraph 17
    17. The 7.00 AP payable is how all the indexation of i) the GMP from 1978 to
    1988; and ii) anything above three per cent for post-1988 GMPs, is provided by
    the state

    Again nothing can be clearer,some or all of the indexation is provided by the state..
    I have had a read of the whole document and coud not see any mention of GMP indexation not being paid via the state pension.

    When the White Paper dated January 2013. No mention of people not receiving GMP increases via the way the state second pension under the New State Pension.

    Under a freedom of information request I started corresponding with the DWP trying to find out what was going to happen about GMP indexation because it had not been mentioned in any of the new state pension documents
    https://www.whatdotheyknow.com/request/150015/response/376658/attach/2/FoI.1358.response.pdf?cookie_passthrough=1
    Response
    (1)Following the introduction of the new flat-rate State pension, there will no longer be any
    direct comparison between the contracted-out pensions in payment and the State Pension.
    Salary- related pension schemes will continue to increase pensions in line with existing
    legislation.

    That was the first time the DWP mentioned to me that GMP indexation would no longer be paid via the New State Pension.

    When all this was happening I contacted the Treasury and they told me that they had been in correspondence with the DWP regarding what to do about non payment of GMP indexation for people in the Public sector .

    By the time the DWP issued the White Paper in January 2013 they knew about non payment of GMP indexation but purposely left it off the white paper because the knew if it was mentioned there would be a great deal of trouble trying to explain why GMP increases would no longer be paid via the state pension.

    questions were asked in parliament by Teressa Pearce and she received a reply from Steve Webb on the 6 January mentioning
    https://www.theyworkforyou.com/wrans/?id=2014-01-06c.181793.h

    (1) what estimate his Department has made of the number of people affected by ending the payment of guaranteed minimum pension increases;

    (2) what impact assessment his Department has conducted of ending the payment of guaranteed minimum pension increases;

    (3) what estimate he has made of the average loss to persons affected by ending the payment of guaranteed minimum pension increases;

    (4) what estimate his Department has made of the total saving to the public purse as a result of ending the payment of guaranteed minimum pension increases.
    He did not answer any of the Questions.
    Steve Webb The Minister of State, Department for Work and Pensions
    The Department for Work and Pensions does not pay increases on guaranteed minimum pensions (GMPs).

    That was a strange reply from Steve Webb because he must have known that the Treasury and DWP were in discussion about GMP indexation for people in the public sector.
    There was a good article in the independent which mentions possible loss of up to about 20,000.

    I think this was the first article to mention loss of GMP indexation.

    Losers who never knew in the switch to single-tier pensions | The .Independent 10 Jjanuary 2014

    https://www.independent.co.uk/money/pensions/losers-who-never-knew-in-the-switch-to-single-tier-pensions-9052425.html..

    Just before the new state pension was due to start the treasury announce

    Government one step closer to introducing new State Pension this year

    https://www.gov.uk/government/news/government-one-step-closer-to-introducing-new-state-pension-this-year
    Government will fully index public service pensions for workers reaching State Pension Age from April 2016 to 5 December 2018

    This seems strange asSteve Webb had mentioned to parliament on 6 january 2014 that the DWP did not pay GMP indexation so why was the Treasury now making public service schemes pay the GMP increases previously paid by the DWP for people reaching state pension age on and after 6 April 2016 and befre 6 December 2021.

    Why did Steve Webb tell a porky.

    As you can see the DWP have known about the loss of GMP indexation since at least as early as January 2012 and possibly earlier yet chose not top mention it to Parliament.
    in my oppinion they have trie to introduce the change by stealth

    Anyone affected by the loss of GMP indexation should write to the pension minister via their MP. Don't do it direct as you will receive a reply from the DWP

    I think there are mostlt probably over ten million people affected by the loss of GMP indexation which only affects people in the private sector at the moment.

    If anyone is interested I have a great deal of information on this subject.Hf .
    Last edited by Billopp; 15-07-2018 at 3:10 PM.
    • xylophone
    • By xylophone 14th Jul 18, 10:12 PM
    • 26,495 Posts
    • 15,735 Thanks
    xylophone
    Government will fully index public service pensions for workers reaching State Pension Age from April 2016 to 5 December 2018
    See latest House of Commons Briefing Paper by Djuna Thurley



    BRIEFING PAPER
    Number CBP-4956, 2 May 2018
    Guaranteed Minimum Pension (GMP) increases



    On 22 January 2018 it announced that the interim solution (full-indexation of GMPs earned in public service) would be extended for a further two years and four months, covering people who reach SPA on or after 6 December 2018 and before 6 April 2021.

    I think there are mostlt probably over ten million people affected by the loss of GMP indexation which only affects people in the private sector at the moment.

    Guaranteed Minimum Pensions will vary widely. The type of
    person who will do comparatively worse under the reforms is
    someone who has spent long periods in a contracted-out pension
    scheme and is close to retirement on 6 April 2016, so has little
    time to build up additional entitlement to new state pension. The
    Department estimates that 180,000 people who will reach state
    pension age in 2016-17 will have Guaranteed Minimum Pensions
    from before 1988. The amount by which people will be affected
    depends on their specific employment history. The Department!!!8217;s
    modelling forecasts that 50,000 of these people will be worse off
    in 2017-18 as a result of the introduction of new state pension
    (paragraphs 3.13 to 3.17).
    • Terron
    • By Terron 15th Jul 18, 12:31 AM
    • 293 Posts
    • 251 Thanks
    Terron
    I am a bit comfused by this discussion. I have a post-88 GMP of ~500 in a schem I intend to start using next year though my SPA is 2025.


    My understanding was that the GMP portion would be index linked up to a cap of 3%, whereas the rest of the pension is index linked up to 5%. Is that right?


    I was expecting not to get any increases related to the GMP with the new SP>
    • xylophone
    • By xylophone 15th Jul 18, 8:44 AM
    • 26,495 Posts
    • 15,735 Thanks
    xylophone
    Are you a deferred member of this Scheme?

    If so, do you have your statement of deferred benefits on leaving?

    If so, by what method did the GMP revalue in deferment?

    Is it a public service scheme or is the pension aligned to a public service scheme?

    Are you taking the pension at Normal Scheme Retirement Age?

    Are you male or female?

    Do you have a copy of the scheme booklet?
    • Terron
    • By Terron 15th Jul 18, 2:13 PM
    • 293 Posts
    • 251 Thanks
    Terron
    Are you a deferred member of this Scheme?

    If so, do you have your statement of deferred benefits on leaving?

    If so, by what method did the GMP revalue in deferment?

    Is it a public service scheme or is the pension aligned to a public service scheme?

    Are you taking the pension at Normal Scheme Retirement Age?

    Are you male or female?

    Do you have a copy of the scheme booklet?
    Originally posted by xylophone

    I actually have 2 pensions with GMPs, both in deferrment.
    For the older snaller one it looks like the GMP should be increased by 7% a year for someone who left when I did. Unfortunately i the company that now owns it has been giving very few increases. This was discussed in parliament - https://www.theyworkforyou.com/whall/?id=2017-01-17a.269.0
    I haven'tfound the GMP uprating system for the other scheme.


    Neither are public sctor schemes or lnked to sych.


    The first scheme has a NRA of 60 - next year when I plan to take both. The other has a NRA of 65.


    I probably have the original booklets somewhere, but I can't find them at the moment.
    Last edited by Terron; 15-07-2018 at 2:16 PM. Reason: Typo
    • xylophone
    • By xylophone 15th Jul 18, 2:50 PM
    • 26,495 Posts
    • 15,735 Thanks
    xylophone
    https://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/18/what-is-a-gmp/

    The scheme must pay your GMP.

    Are you male or female?
    • hyubh
    • By hyubh 15th Jul 18, 3:25 PM
    • 2,256 Posts
    • 1,738 Thanks
    hyubh
    For the older snaller one it looks like the GMP should be increased by 7% a year for someone who left when I did. Unfortunately i the company that now owns it has been giving very few increases. This was discussed in parliament - https://www.theyworkforyou.com/whall/?id=2017-01-17a.269.0
    Originally posted by Terron
    No, these are two different things:
    1) The 7% refers to fixed rate revaluation for GMP in deferment for members who left in the 93/94 to 96/97 tax years.
    2) The parliamentary discussion linked to is about increases on the excess in payment

    A scheme doesn't get a choice as to whether to revalue GMP or not, though it does in respect of the revaluation type used (fixed vs. S148, and back in the day, 'limited') - while most private sector schemes use fixed, not all do.

    The first scheme has a NRA of 60 - next year when I plan to take both. The other has a NRA of 65.
    GMP ages are independent of scheme NRAs. If the latter is lower than the former, then a common approach is to treat the GMP as excess between retirement and GMP age, but that isn't a requirement.
    • Billopp
    • By Billopp 15th Jul 18, 3:27 PM
    • 34 Posts
    • 8 Thanks
    Billopp
    Terron



    Your occupational pension scheme should pay you up to 3% max on post 1988 GMP and if higher the balance under the old system would have been paid via the state pension but won't now be paid under the new sate pension. What you say in the paragraph below is most probably correct.

    Have you been officially been told by your occupational pension scheme that you will not receive GMP indexation under the NSP.. I would be interested to know how you found out about the change to GMP indexation. It is the people with pre 1988 GMPs that have most to loose.. Could be over 15,000.


    My understanding was that the GMP portion would be index linked up to a cap of 3%, whereas the rest of the pension is index linked up to 5%. Is that right?


    I was expecting not to get any increases related to the GMP with the new SP>
    • Billopp
    • By Billopp 15th Jul 18, 3:50 PM
    • 34 Posts
    • 8 Thanks
    Billopp
    xylophone

    I have seen the the House of Commons Briefing note

    I think you will find out the DWP have tried to justify the change by saying that people will gain by other changes which are not all true. If this is the case why are people in the public sector having their GMP indexation on GMPs paid via t their occupational pension if they reach state pension age prior to 6 April 2021.
    They have kicked the bucket down the road regarding what to do about people in public sector who reach state pension age on and after 6 April 2021 .

    None of this affects me as I reached state pension age prior to the New state pension starting. I reached state pension age in 2005 and my actual AP was about 2 pw and is now almost 35 pw because of my GMP indexation payable by the DWP with my state pension.
    For some reason I can't fathom out Steve Webb told Parliament that the DWP does not pay GMP indexation..

    As far as I can see the change in legislation has been done by stealth. It was never mentioned in rGeen or White Papers or Pensions Bill 2011 MPs' information pack issued in May 2011.GAD in their reports about the affect of loss of GMP indexation give examples of where the loss of GMP indexation by the DWP can be greater than 20,00 .Women suffer a greater loss than men.tpe

    Guaranteed Minimum Pensions will vary widely. The type of
    person who will do comparatively worse under the reforms is
    someone who has spent long periods in a contracted-out pension
    scheme and is close to retirement on 6 April 2016, so has little
    time to build up additional entitlement to new state pension. The
    Department estimates that 180,000 people who will reach state
    pension age in 2016-17 will have Guaranteed Minimum Pensions
    from before 1988. The amount by which people will be affected
    depends on their specific employment history. The Department!!!8217;s
    modelling forecasts that 50,000 of these people will be worse off
    in 2017-18 as a result of the introduction of new state pension
    (paragraphs 3.13 to 3.17).
    • Terron
    • By Terron 15th Jul 18, 6:11 PM
    • 293 Posts
    • 251 Thanks
    Terron
    Thanks for the responses.


    I am male.
    I joined the first scheme in 1989 and left in 1994 and joined the second one, which is a bit of a hybrid but the DB underpin will almost certainly apply. It was replaced by a pure DC scheme warly this millenium.



    As I understand it the index linking of my DB pensions will be
    a) inflation subject to a cap of 5% on the newer scheme minus its GMP.
    b) inflation subject to a cap of 3% on both GMP parts

    c) at the discretion of the current owners for the remainer of the first scheme.


    It is from this forum that I have learned most about GMPs in particular the change to GMP indexation. I hadn't realized it was indexed in a different way to the rest of the scheme until a few months ago.
    • hyubh
    • By hyubh 15th Jul 18, 8:45 PM
    • 2,256 Posts
    • 1,738 Thanks
    hyubh
    I think you will find out the DWP have tried to justify the change by saying that people will gain by other changes which are not all true.
    Originally posted by Billopp
    I'm pretty sure xylophone is aware of the issues . In the case of someone with an old private sector DB pension with 7% revaluation on their GMP and some years to state pension age, this justification will likely hold however (under the old system, it would be some years before the 7% falls behind full rate revaluation and increases kick in with the state pension).

    If this is the case why are people in the public sector having their GMP indexation on GMPs paid via t their occupational pension if they reach state pension age prior to 6 April 2021.
    The answer to your 'why' question is twofold:

    1) Technically, it has always been the case that if a member did not get 'full' increases on their GMP once the state pension is included, then a public sector scheme was liable to make up the difference. Clearly CETV calculations (and for the LGPS in particular, employer contribution rates and charges) were not calculated on the basis that the normal situation would be that the scheme paid 'full' increases on GMP. However, the principle that a public sector scheme member gets 'full' increases overall (no more no less) wasn't dreamt up in the past few years.

    2) Not treating GMP as excess, when the state pension no longer tracks contracted-out deductions, creates a sex inequality issue for public sector schemes that did not exist before, keeping in mind that so-called 'Barber equalisation' for excess pensions did not affect public sector schemes because they were gender-neutral in the first place (GMP, in itself, is not gender-neutral because it reflects the state pension of its time).
    • hyubh
    • By hyubh 15th Jul 18, 8:57 PM
    • 2,256 Posts
    • 1,738 Thanks
    hyubh
    I joined the first scheme in 1989 and left in 1994 and joined the second one, which is a bit of a hybrid but the DB underpin will almost certainly apply.
    Originally posted by Terron
    You need to be a bit more precise - how was it 'a bit of a hybrid', surely it either was a hybrid or was not? And if it was, was this a DC scheme with a DB underpin? Or a pure DB scheme...?

    As I understand it the index linking of my DB pensions will be
    a) inflation subject to a cap of 5% on the newer scheme minus its GMP.
    b) inflation subject to a cap of 3% on both GMP parts

    c) at the discretion of the current owners for the remainer of the first scheme.
    Statutory increases for excess in payment only started in 1997. This does not mean scheme rules failed to grant increases for service before then. However, this may have been in terms of them still being formally discretionary... or may not, all depends on the scheme rules.

    As noted before though, it's important to distinguish between 'revaluation' between leaving and a pension becoming due, and 'pension increases' once on in payment. For public sector schemes this is a distinction without a difference, for private sector schemes, not so.
    • Terron
    • By Terron 15th Jul 18, 9:45 PM
    • 293 Posts
    • 251 Thanks
    Terron
    You need to be a bit more precise - how was it 'a bit of a hybrid', surely it either was a hybrid or was not? And if it was, was this a DC scheme with a DB underpin? Or a pure DB scheme...?



    Statutory increases for excess in payment only started in 1997. This does not mean scheme rules failed to grant increases for service before then. However, this may have been in terms of them still being formally discretionary... or may not, all depends on the scheme rules.

    As noted before though, it's important to distinguish between 'revaluation' between leaving and a pension becoming due, and 'pension increases' once on in payment. For public sector schemes this is a distinction without a difference, for private sector schemes, not so.
    Originally posted by hyubh

    It is a DC scheme with a DB underpin on the core contribution. I paid extra so part of my fund is not covered by the underpin..I got an estimate this year so I have a fair idea of what it is worth amd what options are available for taking it.


    For the earlier schme increases once it is in payment are discetionary for service prior to 1997. Since 2002 most years there has been no increase. In 2004 and 2008 there were increases of 1%. Thus has been raised with the ombusman and in parliament, but nothing has changed.
    • xylophone
    • By xylophone 15th Jul 18, 11:08 PM
    • 26,495 Posts
    • 15,735 Thanks
    xylophone
    I am male.
    I joined the first scheme in 1989 and left in 1994 and joined the second one, which is a bit of a hybrid but the DB underpin will almost certainly apply.
    Male GMP age is 65.

    With regard to the first scheme, you are going to draw this pension at Normal Scheme Retirement Age but this is earlier than GMP age.

    The question is how your scheme handles this situation and you need to check this with the administrator.


    By way of example, look at how the Barclays Scheme does it

    post 167 here

    https://forums.moneysavingexpert.com/showthread.php?t=4736856&highlight=mikefloutier&pa ge=9

    After GMP age your scheme is not obliged to index link the post 88 GMP above 3%.

    The NRSA of the second scheme is male GMP age but it appears that you intend to draw this pension early - this is likely to mean an actuarial reduction and possibly different treatment of the GMP aspect - again the Barclays example (post 101) may be of interest but you will need to check how your scheme rules work.

    You may also wish to check whether there is any form of abatement/clawback at State Pension Age.

    http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN01121

    Have you obtained a new state pension statement?

    https://www.gov.uk/check-state-pension
    • Billopp
    • By Billopp 16th Jul 18, 9:37 AM
    • 34 Posts
    • 8 Thanks
    Billopp
    Can anyone tell me if the new state pension statements that people request now mention that people will not receive GMP indexation on GMPs via their state pension? I believe the DWP send out a booklet with it which would be a good opportunity to tell people about the change to GMP indexation.so am interested to find out if the DWP are telling people about the change in legislation.

    The other thing I would like to know is how you all found out about the loss of GMP. Indexation. Was it through DWP,your employer, newspaper articles,or through forums like this?.

    I am fairly fortunate as my occupational pension is not reduced by abatement/clawback and have all my occupational pension indexed by my scheme. No adjustment is made for my GMP. On top of that my scheme did not have fixed rate revaluation either so consider my self very fortunate.

    The reason I am interested in the subject is that I am trying to help some friends take a case to the Ombudsman regarding the DWP not telling people about the change in legislation regarding loss of indexation on GMPs. especially as it was not mentioned in Green or White Papers.The change has been done by stealth. In fact I am beginning to wonder if the law has actually been changed. so it is possible the DWP are not paying GMP increases without the authority of Parliament
    • greenglide
    • By greenglide 16th Jul 18, 10:16 AM
    • 3,164 Posts
    • 2,059 Thanks
    greenglide
    DWP are not paying GMP increases without the authority of Parliament
    Unfortunately the DWP is doing exactly what the pensions act said.


    You really need to differentiate between parliament/government who pass the laws and the civil service who implement them.


    How many MPs who voted for this actually understood what this change was is another matter. Successive governments have never really understood whole GMP/COD mess.
    Last edited by greenglide; 16-07-2018 at 10:17 AM. Reason: Fix quote
    • Billopp
    • By Billopp 16th Jul 18, 11:33 AM
    • 34 Posts
    • 8 Thanks
    Billopp
    Can you please point me to where it was mentioned in the Act. I don't think the new state pension was actually voted on as it went through on the nod, so we don't know which way MPs voted on it.

    How did you find out about the change to GMP increases legislation?
    • Terron
    • By Terron 16th Jul 18, 11:36 AM
    • 293 Posts
    • 251 Thanks
    Terron
    Male GMP age is 65.

    With regard to the first scheme, you are going to draw this pension at Normal Scheme Retirement Age but this is earlier than GMP age.

    The question is how your scheme handles this situation and you need to check this with the administrator.


    By way of example, look at how the Barclays Scheme does it

    post 167 here

    https://forums.moneysavingexpert.com/showthread.php?t=4736856&highlight=mikefloutier&pa ge=9

    After GMP age your scheme is not obliged to index link the post 88 GMP above 3%.

    The NRSA of the second scheme is male GMP age but it appears that you intend to draw this pension early - this is likely to mean an actuarial reduction and possibly different treatment of the GMP aspect - again the Barclays example (post 101) may be of interest but you will need to check how your scheme rules work.

    You may also wish to check whether there is any form of abatement/clawback at State Pension Age.

    http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN01121

    Have you obtained a new state pension statement?

    https://www.gov.uk/check-state-pension
    Originally posted by xylophone

    I have checked my new state pension. I am a few pounds short of the maximum. I am trying to pay class 2 contributions for last years whch should be enough to reach the maximum.


    I have spoke to the administrator of the second scheme. about GMP.
    They said currently before payment it revalues at 4.5% per year.
    If I take it at 60 as always planned I will get the money and it will be revalued like the rest of the scheme - CPI with a cap of 5% until GMP age.
    After GMP age the cap will become 3%.


    I am waiting for a callback about the other scheme.
    Last edited by Terron; 16-07-2018 at 12:20 PM.
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