Contracted out of SERPS - I think?

[cashmax]

I seem to recall signing something to contract out of SERPS decades ago. Don't ever recall seeing any communication and got no idea if I'm still out. I did in in my early twenties when a pension was a meaningless word to me. Now I'm 45 and just wondered how to find out if I did, when I did, who I did it with and if I'm still out?

Any pointers much appreciated.

[uknick]

If you contracted out of SERPS, what did you contract into? Personal pension or company pension?

If either of the above you should have been getting annual statements from the pension provider.

[anonymous-user]

As above, to contract out of SERPS you would need to have a pension those funds went into.

The payment into a pension from SERPS stopped in 2012, but you will have a pension somewhere that was receiving those payments until 2012.

Check your pension for Protected Rights benefits, that's what the SERP portion of payments was called.

[FiF]

Also don't forget if you have been contracted out for a good few years it will affect your state pension.

According to the new rules mine would be reduced from the standard 155 quid by 82 quid per week. That's even with having well over 40 qualifying years of full contributions. So you need to think how you're going to fix that side of things too. Don't rely on pensions office to give you much help, long story won't bother you with, but useless gits basically.

[cashmax]

The problem is I have no paperwork and have never received a statement. The pension was a personal one I seem to recall. How would I go about finding out?

[FiF]

You need to start here

[The Leaper]

I agree with the recommended starting point. TPAS are well experienced with pension tracing, but it does not always bring about a positive result, and when it does it can take a surprising amount of time. TPAS's services are free, by the way.

If you are going to need to use the government's free online Pension Tracing Service then I'd strongly recommend doing so through the link on TPAS's website. There are many organisation out there offering their services and none are for free and many are scams, and you could find this out, unfortunately, if you went through, say, a Google search.

R.

[The Leaper]

Being contracted out of SERPS means that:

• your own and your employer's National Insurance contributions are reduced;

• the reduced contributions must be redirected into an approved UK pension scheme;

• that scheme must guarantee minimum benefits at State pension age;

The theory is that the redirected money should be better used in the private sector rather than the State sector. Put another way, for the same outlay you should get a better pension privately than via the State. However, this depends on many factors such as age (the younger you are when contracting out the better), what the guaranteed benefits are, where the money is invested if in a personal pension, etc.

The problems met with tracing a pension usually are a combination of the following:

• you have changed your address from time to time and not told the pension provider, so they lose the ability to contact you; it's your responsibility to keep the parties informed about your address changes;

• the pension provider has been acquired, merged etc, perhaps many times, so you getting to the party now responsible is really a challenge;

• your employer, who you may have left years ago, has been acquired, merged etc, such that you can have problems getting to the company that is now responsible for the pension liability.

R.

[cashmax]

Thanks for the pointers. I don't even know if it was a personal or company pension. The company no longer exists. How do I find out if I'm still contracted out?

[C0ffin D0dger]

You won't be still contracted out because the government stopped you being able to do so a number of years back. If you were at the time then the payments from national insurance would have stopped being made to whatever scheme you were in and you'd then be back in SERPS. For whatever time you were out of SERPS you'd have that money in a private scheme somewhere, think it's known as protected rights though I may be wrong.

[triple5]

swerni said:

Thanks for that, I opted out many years ago as well and hadn't thought about impact on state pension.
Already up to £152.87 a week and many many year left to work

Got nervous for a sec

Did you find that out through the site, or did you need to call?

[FiF]

triple5 said:

swerni said:

Thanks for that, I opted out many years ago as well and hadn't thought about impact on state pension.
Already up to £152.87 a week and many many year left to work

Got nervous for a sec

Did you find that out through the site, or did you need to call?

Clearly I don't know how swerni obtained his quote but my experience was a prime example of joined up Government systems.

To get a quote online you need to have a Government Gateway identity and login. As I had one for tax returns, and child benefit, used that when, eventually, they decided they could give me an actual quote, as opposed to what was previously given being "both you and Mrs FiF have sufficient qualifying years so you will definitely get the full pension.

So I signed in with my Government Gateway id and password, navigated to the appropriate bit of the government system, only to find that the pensions lot didn't use that gateway and you needed to apply for another gateway id which came through the post. Few days later the activation code arrived in the post and then can't remember whether it was a case of activating it and setting up my password straight away, or activating it then having to wait for my randomly generated password in the post and carry on from there. Which then gets you to the online quote.

Fast forward a while to the date when you are able to claim your pension as up for payment, it's a few months before your pension date. So you fight your way into the Pension Government Gateway you set up earlier, go to the claim bit, only to find that this needs yet another Government Gateway login id, apply, id comes in post, then activation code, comes in post, bla bla bla, password bla bla bla.

You could just ring them up, but then you don't have a record, could use snail mail. Marvellous isn't it, 2017, and we have to put up with that malarkey.

[uknick]

swerni said:

Thanks for that, I opted out many years ago as well and hadn't thought about impact on state pension.
Already up to £152.87 a week and many many year left to work

Got nervous for a sec

What do they quote as your COPE (Contracted Out Pension Equivalent) figure? This is the amount they'll deduct from the £155 per week when you finally start to claim your state pension.

My COPE is about £69 per week as I contracted out for most for my working years. Therefore £69 will be deducted from the maximum of £155 a week I could get as a state pension, giving me about £86 per week.

However, it's not quite as simple as that.

They've built in rules which say I'll get the higher of the state pension as it was under the old rules prior to the changes in April 2015 (about £130) or the new state pension calculation taking into account my COPE deduction. So, I should get £130 at todays prices instead of the £86 at today's prices.

But, as all this crystallises for me in 2029 I'm not assuming there'll be no more changes before then.

[FiF]

swerni said:

It's dead easy
https://www.gov.uk/check-state-pension

Log in using gateway ID and password. It then emails you a code
Type it in and the first thing you are shown is what you are due in big numbers

take all of 2 minutes

I agree, ONCE you have the right gateway id etc THEN it's easy. Maybe they have integrated it better since I did it. Certainly when I did my forecast, there was no link available from the general government gateway site, hence having to apply for another id.

[FiF]

swerni said:

£39.18 Thanks for pointing that out.

So pension is only related to the amount of years you pay on the qualifying amount, not how much you pay in then?

Yep, so for example Mrs FiF has fewer qualifying years than me, 39 and a bit, vs 43 years, plus her contributions in monetary terms were much lower than mine, yet she would get in today's money 133pw under the new scheme, whereas mine was 155 minus 82 = £55 per week. As above I qualify under the rule where it would have been more under the old system, so my starting pension is that. £122ish.

To be fair and totally honest, I don't actually need the state pension, having saved into schemes since starting work, including holiday jobs at uni, that includes significant payments into such as AVC schemes.

[triple5]

swerni said:

It's dead easy
https://www.gov.uk/check-state-pension

Log in using gateway ID and password. It then emails you a code
Type it in and the first thing you are shown is what you are due in big numbers

take all of 2 minutes

Thanks.

[FiF]

swerni said:

FiF said:

swerni said:

It's dead easy
https://www.gov.uk/check-state-pension

Log in using gateway ID and password. It then emails you a code
Type it in and the first thing you are shown is what you are due in big numbers

take all of 2 minutes

I agree, ONCE you have the right gateway id etc THEN it's easy. Maybe they have integrated it better since I did it. Certainly when I did my forecast, there was no link available from the general government gateway site, hence having to apply for another id.

Same ID as self assessment

Ok accept what you're saying, now. But it didn't used to be like that, good job things have changed.

[cashmax]

So I checked out the government website and din't have my ID, but you can get instant access by getting verification from a 3rd party. (using your passport or driving license and asking you loads of questions about stuff like credit cards if you get Experian to do it) Which took about 20 mins.

Pension £155.65
25 years of contributions with 3 of them having gaps

It says I was contracted out for some of the time, but no details as to who with.

The cope estimate was £40.06