Pension / does this sound correct
Discussion
I got home yesterday & the wife said you’ve got a letter from Rolls Royce about your pension , which was a real suprise to me as I left apx 43 yrs ago & have not heard anything since , I believed I’d shut pension down but going onto its pension site I had £44 in the pension that is now worth £1,238 Pa , does that sound correct , it’s not a huge amount but anything is better than nothing .
It just all seems a bit strange , 43 yrs apx with not one bit of correspondence then this .
Though it has got me thinking what other pensions have I that I’ve forgot about .
It just all seems a bit strange , 43 yrs apx with not one bit of correspondence then this .
Though it has got me thinking what other pensions have I that I’ve forgot about .
Last year I started getting £400/mth from my first job, where I worked for 4yrs and left 40yrs ago.
I've always (since I left) had a letter telling me how much it would be but never quite believed it - I thought it was to make up the basic state pension to its full amount, but I get that in full anyway. Only thing is that, at least in my case, it won't increase - it'll be paid at the same amount until I snuff it.
I've always (since I left) had a letter telling me how much it would be but never quite believed it - I thought it was to make up the basic state pension to its full amount, but I get that in full anyway. Only thing is that, at least in my case, it won't increase - it'll be paid at the same amount until I snuff it.
Yes, it sounds right.
It's probably mostly (if not all) Guaranteed Minimum Pension which was created by being contracted out of the additional state pension. £44 is the amount when you left the scheme (either by it closing to further accrual or switching employer). Then with fixed rate revaluation on the GMP at 8.5%pa that's how you end up with so much 43yrs later (it's probably 41yrs based on the numbers and is by complete tax years only).
NB: I expect it's a level payment without any further increase.
It's probably mostly (if not all) Guaranteed Minimum Pension which was created by being contracted out of the additional state pension. £44 is the amount when you left the scheme (either by it closing to further accrual or switching employer). Then with fixed rate revaluation on the GMP at 8.5%pa that's how you end up with so much 43yrs later (it's probably 41yrs based on the numbers and is by complete tax years only).
NB: I expect it's a level payment without any further increase.
Edited by steve_n on Wednesday 3rd April 19:51
As Steve says, at a guess it’s pre 88 Guaranteed Minimum Pension (all or mostly). GMP was what you got in return for being contracted-out of the State Earnings Related Pension Scheme.
If you left in the early 80s, the fixed rate GMP revaluation was 8.5% pa - looks crazy to 2024 eyes.
So £44 x 1.085^41 = £1,248
If you left in the early 80s, the fixed rate GMP revaluation was 8.5% pa - looks crazy to 2024 eyes.
So £44 x 1.085^41 = £1,248
Zigster said:
As Steve says, at a guess it’s pre 88 Guaranteed Minimum Pension (all or mostly). GMP was what you got in return for being contracted-out of the State Earnings Related Pension Scheme.
If you left in the early 80s, the fixed rate GMP revaluation was 8.5% pa - looks crazy to 2024 eyes.
So £44 x 1.085^41 = £1,248
But he's getting that per year, not as a one off payment. If you left in the early 80s, the fixed rate GMP revaluation was 8.5% pa - looks crazy to 2024 eyes.
So £44 x 1.085^41 = £1,248
As we’re talking a DB scheme, you can’t really ‘shut them down’ without transferring out, which isn’t a process you’d go thru and not remember! (I.e it’s a ball ache)
Sounds legitimate to me.
Is the website you’re using:
https://www.rolls-roycepensions.com/Homepage
Sounds legitimate to me.
Is the website you’re using:
https://www.rolls-roycepensions.com/Homepage
He had an annual pension entitlement of £44 43 years ago. The level of funding that went into it would have been notably more than just £44, although not that much. Let's say £1,000 worth of contracting out money went in and that resulted in £44 of GMP. This is why these things no longer exist, they were unfeasibly expensive to fund.
GMP revaluation rates were reduced the later the date of leaving, 8.5% was the highest but by 2007 that had been reduced to 4%.
GMP revaluation rates were reduced the later the date of leaving, 8.5% was the highest but by 2007 that had been reduced to 4%.
TwigtheWonderkid said:
That's not what he said. He said he had a pension with £44 in it. Not worth £44/year. Just £44.
Yeh, but if you know about pensions then you know he meant £44pa. Just written a bit lazily, or possibly not clear to the OP that it was per annum. Rolls Royce was a defined benefit pension and those figures stack up as GMP as expected. If he had £44 then he would not have £1.2kpa now. Bluevanman said:
With inflation that £44 would be £380 now so he's done very well
The revaluation rate of 8.5% was set when inflation was running as high. The quirk is that the rate was fixed and continued to be used throughout until age 65. The later the date of leaving the lower the fixed rate GMP revaluation, corresponding to the fact inflation had dropped.https://techzone.abrdn.com/public/pensions/Tech-gu...
Sheepshanks said:
Mine must have been calculated when I left, as it simply stated the GMP amount at 65, and that's the amount I get.
Approaching 65 I got a letter asking me to claim it from the pension admin people and that told me the value for LTA purposes - it was just over £100K.
They were able to calculate the future value when you left because it used fixed rate revaluation. The LTA value would have been 20 times the initial starting annual figure as it went into payment. Approaching 65 I got a letter asking me to claim it from the pension admin people and that told me the value for LTA purposes - it was just over £100K.
Less commonly, GMP is revalued by National Average Earnings and if that was the case they would only have been able to estimate and not calculate the GMP at 65, when you left below age 65.
steve_n said:
TwigtheWonderkid said:
That's not what he said. He said he had a pension with £44 in it. Not worth £44/year. Just £44.
Yeh, but if you know about pensions then you know he meant £44pa. Just written a bit lazily, or possibly not clear to the OP that it was per annum. Rolls Royce was a defined benefit pension and those figures stack up as GMP as expected. If he had £44 then he would not have £1.2kpa now. TwigtheWonderkid said:
That's not what he said. He said he had a pension with £44 in it. Not worth £44/year. Just £44.
He said " I had £44 in the pension that is now worth £1,238 Pa"As steve_n says, it's spot-on for schemes at the time - mine was 4 x £44 and is now worth 4x £1,238. Pa.
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