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Transfer of benefits

PaulBullet
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Transfer of benefits

#165465

Postby PaulBullet » September 10th, 2018, 12:19 pm

I worked for Barclays bank for a year or so give or take in 1985/6

I was a member of the following scheme

The Barclays Bank UK Retirement Fund (the UKRF)
The 1964 Pension Scheme

The scheme had a GMP (Guaranteed minimum pension) of 17.68 as of 11 April 1986 and I have been given a total transfer value of 8,916.05

How do I work out if this is fair value? if i try to get the GMP as of todays date on the scheme website it does not calculate it.

I intend to call them about this but what other questions should I ask

Thanks

Paul

Alaric
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Re: Transfer of benefits

#165478

Postby Alaric » September 10th, 2018, 1:18 pm

PaulBullet wrote:I intend to call them about this but what other questions should I ask


You ask them when is your normal retirement date and what could you take by way of benefits, both in cash form and annual lifetime payment.

Is the GMP figure you quote, per year, per month or per week?

A way of assessing the reasonableness or otherwise of the transfer value could be to recall what you earned at Barclays in that period and what it might be worth today had 10 to 20% of it been set aside in a FTSE tracker conventional or indexed Gilts.

OLTB
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Re: Transfer of benefits

#165502

Postby OLTB » September 10th, 2018, 3:14 pm

PaulBullet wrote:I worked for Barclays bank for a year or so give or take in 1985/6

I was a member of the following scheme

The Barclays Bank UK Retirement Fund (the UKRF)
The 1964 Pension Scheme

The scheme had a GMP (Guaranteed minimum pension) of 17.68 as of 11 April 1986 and I have been given a total transfer value of 8,916.05

How do I work out if this is fair value? if i try to get the GMP as of todays date on the scheme website it does not calculate it.

I intend to call them about this but what other questions should I ask

Thanks

Paul


Hi Paul

The revaluation rates for GMP prior to 6 April 1988 is a fixed rate of 8.5% p.a. https://assets.publishing.service.gov.u ... nsions.pdf so roughly, this £17.68 pension from 1986 will be re-valued in the region of £240 p.a.. This will increase each year in deferment until drawn (usually age 65). There is no requirement for GMP income to be increased in payment before April 1988 (I think), but State Pension would get amended as compensation for this.

So, you could give up a fixed 8.5% revalued pension, or leave it and transfer out when it's time to draw (if, of course that option is still open!). Currently, it seems that the transfer figure is about 37 times the pension, but I would wait until you hear directly from the Barclays scheme as this is just a rough guesstimate based on the information above. Just ask them to confirm that the revaluation rates are correct, the GMP increase in payment is correct and that you can transfer without the need for IFA authorisation (I expect so as transfer figure is below £30k).

Cheers, OLTB.

mc2fool
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Re: Transfer of benefits

#165539

Postby mc2fool » September 10th, 2018, 6:02 pm

OLTB wrote:The revaluation rates for GMP prior to 6 April 1988 is a fixed rate of 8.5% p.a. https://assets.publishing.service.gov.u ... nsions.pdf

That's only so if the scheme chose to use fixed rate revaluations. They could, as the document you link to points out, have chosen to revalue by National Average Earnings (aka section 148 orders) instead, and there was also a "limited rate revaluation" which also linked to National Average Earnings but was capped at 5%pa over the whole in-deferment period.

While it's most likely that something like the Barclays scheme would use the fixed rate revaluation, the OP should check and ask them.

There is no requirement for GMP income to be increased in payment before April 1988 (I think), but State Pension would get amended as compensation for this.

The first part is so, and that's why you may see "pre-88 GMP" and "post-88 GMP" on a pension statement. The second part is no longer so for anyone reaching state pension age after April 2016. The transition to the new state pension effectively stopped the ASP provided GMP increases.

Currently, it seems that the transfer figure is about 37 times the pension...

That's assuming that the GMP (as calculated) will make up the whole of the pension, which isn't necessarily a good assumption and also needs to be checked.

PaulBullet
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Re: Transfer of benefits

#165876

Postby PaulBullet » September 12th, 2018, 1:12 pm

thanks for the replies

I have asked the questions and should get an answer in about a week

OLTB - your calculations agree with what I was thinking.

mc2fool - The GMP is the only part of the pension that there is.

Paul

PaulBullet
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Re: Transfer of benefits

#167127

Postby PaulBullet » September 18th, 2018, 10:46 am

Got a very useful PDF from the administrator with maybe too much information to digest

however the summary is

I can confirm that your Guaranteed Minimum Pension (GMP) is payable from 65. The value of your GMP at the date of leaving was £17.68 per annum and it receives deferred increases of 8.5% each completed tax year between the date of leaving on 11 April 1986 and 65, in line with the attached guide.

Paul


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