DB Pension: What is a Full Year

[heathmount]

Hi

I have a small defined benefit pension due in about 13 years when I'm 65 and have a question around the revaluation of the pension and full tax years.

My Normal Retirement age for this DB pension is 65 which for me is the end of March.
My date of leaving the scheme was the end of April.
Under the "Revaluation of Deferred Benefits" section it says (my bold):
Guranteed Minimum Pension: This part of your pension revalues by the fixed rate of 6.25% for each complete tax year between date of leaving and age 65. If your date of retirement is after 65, further statutory increases will be applied.
Under the Pension in excess of GMP: This part of your pension accrued before 01/04/1998 revalues at 5% per annum compound for each complete year between date of leaving and date of retirement.

It's unlcear to me if revalution benefits stop as soon as I reach 65 or if they continue to accrue until I instruct the provider that I wish to take the pension? In my case it's only a few days from reaching 65 at the end of March and a new tax year so I would never do anything in that time period anyway but I wondered if when April 6th came around I'd have another year of accrued benefits or whether they'd stop on my 65th birthday and although I'd had 11 out of 12 months it wouldn't be a full year? Also the GMP section references "tax year" and the excess section just references "year", I'm not sure if they are different.

I'll be asking my provider these same questions but thought I'd post anyway.

heathmount

[mc2fool]

Hi

I have a small defined benefit pension due in about 13 years when I'm 65 and have a question around the revaluation of the pension and full tax years.

My Normal Retirement age for this DB pension is 65 which for me is the end of March.
My date of leaving the scheme was the end of April.
Under the "Revaluation of Deferred Benefits" section it says (my bold):
Guranteed Minimum Pension: This part of your pension revalues by the fixed rate of 6.25% for each complete tax year between date of leaving and age 65. If your date of retirement is after 65, further statutory increases will be applied.
Under the Pension in excess of GMP: This part of your pension accrued before 01/04/1998 revalues at 5% per annum compound for each complete year between date of leaving and date of retirement.

It's unlcear to me if revalution benefits stop as soon as I reach 65 or if they continue to accrue until I instruct the provider that I wish to take the pension? In my case it's only a few days from reaching 65 at the end of March and a new tax year so I would never do anything in that time period anyway but I wondered if when April 6th came around I'd have another year of accrued benefits or whether they'd stop on my 65th birthday and although I'd had 11 out of 12 months it wouldn't be a full year? Also the GMP section references "tax year" and the excess section just references "year", I'm not sure if they are different.

I'll be asking my provider these same questions but thought I'd post anyway.

heathmount

There's a number of variables, including what choices your scheme made and the legislation in place when you left it. However, I thought the norm, the statutory minimum at least, was for the excess of GMP to be revalued by The Occupational Pensions (Revaluation) Order issued each year, and that applies (bizarrely for the UK!) on a calendar year basis.

This is the most recent one: https://www.legislation.gov.uk/uksi/2023/1265/made

Here's some reading: https://www.barnett-waddingham.co.uk/comment-insight/blog/revaluation-for-early-leavers/

[Seasider]

I would have thought that the DB pension would start to be paid when you got to normal retirement date. The deferred pension would only increase until the pension starts to be paid (so until NRD). After it starts to be paid then a different set of increases would apply (those that apply to pensions in payment).