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  • FIRST POST
    • steveh6874
    • By steveh6874 30th Sep 18, 8:57 PM
    • 10Posts
    • 2Thanks
    steveh6874
    frozen pension advise please
    • #1
    • 30th Sep 18, 8:57 PM
    frozen pension advise please 30th Sep 18 at 8:57 PM
    Hi everybody i need some pension advise please , i have a frozen pension of 23.500 it is a money purchase pension with a GMP underpin Should i transfer this into my current workplace pension where i have a bigger fund
    I dont really understand what the frozen pension is really and if it as any special features or anything but i just feel with it being a low value fund i wouldnt gain anything much from the features anyway,

    I wont be charged a transfer fee if i did transfer so i am seriously considering transfering

    Any advise would be very much appreciated

    Thank You
Page 1
    • xylophone
    • By xylophone 30th Sep 18, 10:21 PM
    • 26,923 Posts
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    xylophone
    • #2
    • 30th Sep 18, 10:21 PM
    • #2
    • 30th Sep 18, 10:21 PM
    i have a frozen pension of 23.500 it is a money purchase pension with a GMP underpin
    Not frozen but deferred?

    The Scheme (at GMP age presumably) offers you the better of the MP benefits (which hopefully have shown investment growth over the years) OR the GMP revalued to GMP age?

    Is the GMP pre 88/post 88/both?

    How is the GMP revaluing in deferment (fixed rate? full rate?)


    If fixed rate, what is the expected value at GMP age?

    Because of the underpin, if the value of the benefits is greater than 30,000, the advice of a pension transfer specialist would be required before transfer out.

    https://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/18/what-is-a-gmp/
    • Brynsam
    • By Brynsam 30th Sep 18, 10:59 PM
    • 1,676 Posts
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    Brynsam
    • #3
    • 30th Sep 18, 10:59 PM
    • #3
    • 30th Sep 18, 10:59 PM
    23,500 is lower than 30,000 so advice not needed.
    • greenglide
    • By greenglide 1st Oct 18, 11:14 AM
    • 3,180 Posts
    • 2,067 Thanks
    greenglide
    • #4
    • 1st Oct 18, 11:14 AM
    • #4
    • 1st Oct 18, 11:14 AM
    But the underpin may be greater than 30k in which case it would be required?
    • xylophone
    • By xylophone 1st Oct 18, 3:03 PM
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    xylophone
    • #5
    • 1st Oct 18, 3:03 PM
    • #5
    • 1st Oct 18, 3:03 PM
    23,500 is lower than 30,000 so advice not needed.
    The OP does not state whether the figure he gave included GMP revalued to GMP age.
    • steveh6874
    • By steveh6874 1st Oct 18, 10:12 PM
    • 10 Posts
    • 2 Thanks
    steveh6874
    • #6
    • 1st Oct 18, 10:12 PM
    • #6
    • 1st Oct 18, 10:12 PM
    hi everybody the pension is deferred and the value ive been given to transfer is 23.500 with the value of the GMP is 20,622 but it says guaranteed annuity rates do not apply to this plan which is very confusing

    The plan was started july 1988 and was deferred august 1991

    Its giving an example of guaranteed minimum pension as follows



    pre 1988 date of leaving 59 current value 417
    post 1988 105 current value 740
    thank you for replies much appreciated
    • xylophone
    • By xylophone 2nd Oct 18, 1:36 PM
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    xylophone
    • #7
    • 2nd Oct 18, 1:36 PM
    • #7
    • 2nd Oct 18, 1:36 PM
    How old are you?

    Have you obtained a new state pension forecast?

    https://www.gov.uk/check-state-pension
    • xylophone
    • By xylophone 2nd Oct 18, 2:18 PM
    • 26,923 Posts
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    xylophone
    • #8
    • 2nd Oct 18, 2:18 PM
    • #8
    • 2nd Oct 18, 2:18 PM
    The plan was started july 1988 and was deferred august 1991
    Then how can you have pre 88 GMP?

    Service from 6th April 1978 to 5th April 1988 becomes the Pre 88 GMP, and service from 6th April 1988 until 5th April 1997 becomes the Post 88 GMP.

    Ask the administrator to confirm how the GMP is revaluing in deferment.

    A guaranteed annuity rate is not relevant in this case - at scheme retirement age (65?) your pension is based on the better of the GMP or the DC pension?

    The revalued post 88 GMP must escalate in payment up to 3% CPI.
    • steveh6874
    • By steveh6874 6th Oct 18, 11:28 AM
    • 10 Posts
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    steveh6874
    • #9
    • 6th Oct 18, 11:28 AM
    • #9
    • 6th Oct 18, 11:28 AM
    ive been in touch with the provider and received the following

    the gmp underpin is the minimum amount of pension we are allowed to pay upon your 65th birthday

    upon retirement your MPTfund is converted into a pension per anim , if the the pension provided by the MPT fund is lowerthan the GMPpayable then the underpin bites and the benefits would not become payable until the earliest of age 62

    for example

    if the GMPunderpinon your plan was 100pa this would be the minimum amount we could pay from age 65 , if the MPT fund was to provide a pension of 800pa we would be unable to pay you before the scheme retirement age of 62

    from age 62you would then receive 800pa and from 65 the pension would increase to 1000pa in line with the GMP payable
    if theMPT fund was to provide a pension of 1200per annum {after early retirement factors ad been applied } you would be able to this pension prior to scheme retirement age but not before 55
    as well as your pension the plan also provides an additional lump sum upon retirement and the plan provides a spouses pension of 50% upon your death



    so what i need to know is it better to stick with this pension even though its only a very small pension per annum or transfer into my workplace pension where it as the potential to grow more

    thanks for your help much appreciated
    • luckyfool151
    • By luckyfool151 6th Oct 18, 1:43 PM
    • 20 Posts
    • 15 Thanks
    luckyfool151
    The info you have provided is not very clear and I don't think you have asked all of the relevant questions. For example.

    How old are you?
    What is the revaluation rate applied to your GMP from date of leaving?
    Do you definitely have pre and post-88 GMP?
    What is the GMP at SPA (State Pension Age)?
    Have they given you a CETV (Cash Equivalent Transfer Value)? If so is it higher than the current fund value?
    Will they let you take the GMP early if there is a funding shortfall if your NRD is less than SPA?
    Do you need a spouse pension?
    What is the growth rate/ projected fund value of your GMP fund?
    Is your other fund DC and what is its growth rates/projected fund at retirement?
    When would you like to retire?

    These are just some of the questions that you need to provide the answer to.
    Last edited by luckyfool151; 07-10-2018 at 1:26 PM.
    • sandsy
    • By sandsy 6th Oct 18, 2:25 PM
    • 1,391 Posts
    • 848 Thanks
    sandsy
    so what i need to know is it better to stick with this pension even though its only a very small pension per annum or transfer into my workplace pension where it as the potential to grow more

    thanks for your help much appreciated
    Originally posted by steveh6874
    It looks like your GMP pension income is increasing in value at about 7.5% each year. That will continue until 65. That's a healthy rate of growth and would be hard to beat consistently, year after year, after charges, if you transferred. As indicated above, the income you get once you start taking it would also increase, although at a lower rate.

    It might be a small pension but it's already worth 1157pa. It might be helpful to retain as a guaranteed income if your other pensions are not guaranteed. If you were 65 already and the amount would start paying out immediately, it's unlikely you'd be able to better that level of guaranteed, increasing lifetime income based on the underlying transfer value.
    • steveh6874
    • By steveh6874 9th Oct 18, 3:20 PM
    • 10 Posts
    • 2 Thanks
    steveh6874
    hi everybody ive received some more imformation about my plan

    the GMP at date of leaving plan was 59.28 and post 88 was 105.04 and the revauation is fixed at 7.5%
    the GMP at state pension age would be pre 88 861.12 and post 88 1,525.68 totalling 2,386.80
    the NRA for the scheme is 65 however the member pension age is 62 allowing members to take scheme benefits from this point unreduced , if the pension is lower than the GMP the pension will increase to the GMP payable from 65th birthday , for benefits to be taken prior to age 62 the scheme pension payable must be higher than the GMP payable

    the spouses pension is payable in retirement as 50% of full pension in deferment a widows GMP is payable with excess payable as a discretionary lump sum , this does not have an affect on the member pension

    we are unable to project pension benefits more than 6 months in advance so are unable to provide a quotation for your 62nd birthday



    by the way i am 54 and i am forecast to receive the full state pension

    i am now very confused

    thank you
    • xylophone
    • By xylophone 9th Oct 18, 4:11 PM
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    xylophone
    As far as I (no expert) can see, the pension payable at age 65(?) is the higher of the DC pension or the GMP.

    The administrator refers to State Pension Age but GMP age is 65 which is no longer SPA for you. You might like to clarify this with the administrator.


    The scheme must pay you at least 2386.60 per annum from GMP age.

    The scheme must escalate the post 88 GMP in payment post age 65 by up to 3% CPI (or just possibly RPI depending on scheme rules). You might wish to clarify with the administrator.

    There is provision for your widow (if you leave one).

    To be permitted to take benefits before age 62 your scheme pension to date would need to be higher than the value of the GMP. The pension would be actuarially reduced for early payment.

    If you take your pension at age 62, if the value of the Scheme Pension at that point is not as high as the GMP then you would receive an increase at GMP age.

    Presumably there is provision to index link the pension in payment between Scheme Pension Age and age 65 (or possibly State Pension Age- check with administrator) - it is likely that any such increases would be set against the value of the GMP when it comes into payment. You can check this with the administrator.


    It really comes down to whether you wish to keep the guarantee of a pension partially index linked for your/ spouse's lifetime or transfer out into a personal pension or your current workplace pension.

    Be aware that despite the 30,000 rule to which reference is made above, there are pension schemes which will refuse to accept a transfer of safeguarded benefits without advice no matter the value.
    • xylophone
    • By xylophone 9th Oct 18, 4:16 PM
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    xylophone
    PS Although this pension has the DB underpin, it may be that a Pension Wise appointment (or even a discussion with an Adviser at TPAS could assist?

    You could check.

    https://www.pensionwise.gov.uk/en
    • steveh6874
    • By steveh6874 9th Oct 18, 7:05 PM
    • 10 Posts
    • 2 Thanks
    steveh6874
    thank you xylophone very helpful and very much appreciated thank you again
    • steveh6874
    • By steveh6874 11th Oct 18, 12:36 PM
    • 10 Posts
    • 2 Thanks
    steveh6874
    thank you luckyfool151 much appreciated i have made futher enquires with the scheme admin and waiting for the details

    basically i need need to know is is that figure i received of 2386.60 the least pension i can expect to receive per annum at age 65 and how many years in retirement is it paid out is it lifetime or for a certain amount of years

    thanks again
    • woolly_wombat
    • By woolly_wombat 11th Oct 18, 3:13 PM
    • 585 Posts
    • 384 Thanks
    woolly_wombat
    23,500 is lower than 30,000 so advice not needed.
    Originally posted by Brynsam
    23,500 looks like dreadful value considering the stated benefits due at age 65.
    • luckyfool151
    • By luckyfool151 13th Oct 18, 12:25 AM
    • 20 Posts
    • 15 Thanks
    luckyfool151
    thank you luckyfool151 much appreciated i have made futher enquires with the scheme admin and waiting for the details

    basically i need need to know is is that figure i received of 2386.60 the least pension i can expect to receive per annum at age 65 and how many years in retirement is it paid out is it lifetime or for a certain amount of years

    thanks again
    Originally posted by steveh6874

    They have to pay you this figure at 65 and it would be the least figure.

    Again I think it depends on the provider. We provide a 5 year guarantee as standard on GMP but I think this could exceed the statutory requirement (not sure on this). This means that if you die within the first 5 years we guarantee to make this payment to your estate until the end of the 5 year period and then your spouse pension worth 50% of the figures you have quoted at SPA would kick in - her pension would then continue until death. Alternatively, your provider could give overlap which means if you die within the 5 YG payments continue to be made to your estate until the end of that period but your spouse payments would be made concurrently during this period until the death of your spouse. Based on current life expectancy the difference between no guarantee period and 10 years etc means there isn't a huge difference in the annuity rate applied so doesn't matter hugely. Outside of the guarantee period, payment obviously continues until your death and then the spouse pension starts.


    If you live for 30 years then you are absolutely quids in especially if you have escalation provided on the post-88 GMP. I understand that the state will also pay the pre-88 escalation as well (not the provider). It really is a good benefit if you consider the revaluation rates and escalation that has to be provided.

    But there are no poor Pension providers though
    Last edited by luckyfool151; 13-10-2018 at 12:32 AM.
    • steveh6874
    • By steveh6874 13th Oct 18, 1:49 PM
    • 10 Posts
    • 2 Thanks
    steveh6874
    Hi luckyfool151

    I really appreciate you taking the time and trouble to give me this interesting imformation which i am studying

    i am still waiting for more information from the provider but they have provided this current transfer value



    the document shows the current tranfer value 23,525.87 is higher than the GMP payable 20,622.34 for transfer

    thank you again
    • steveh6874
    • By steveh6874 13th Oct 18, 7:12 PM
    • 10 Posts
    • 2 Thanks
    steveh6874
    Hi

    yes they said i could transfer for no fee and said the transfer value is 23,622.34 valid fpr 3 months

    i am totally confused again , i have posted all the information they have sent me it is all very vague though they have not really been very helpful at all and they dont seem interested really in helping me

    thank you
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