Company pension reduced

[Mcandrew]

confused re company pension and state pension. I took my company pension at 55 knowing it was reduced payments as taken early. The company is PwC. I get my state pension in October (age 66) and today I got a letter from the people dealing with the PwC pension to say this pension will be reduced by 37% because of the state pension. Has anyone else ever heard of this. I thought company and state pensions were completely separatw.

Sounds like you dont have a clue what you are talking about.

The whole premise of the HSBC pensioners campaign is that noone ever heard of clawback until it was virtually upon the staff.

The HSBC example isn't levelling (i.e. taking a larger pension until SP kicks in, then reducing), it is simply a reduction in bank pension at SPA. The formula for it is very weird and disproportionately affects lower paid workers. It was a common feature of private sector DB schemes in the past but many organisations (other banks in particular) canned it along the line as these pension schemes were phased out in favour of DC schemes.

A quick Google suggests the PWC DB scheme doesn't have clawback HSBC style but DOES have 'levelling'.

I worked for another of the big retail banks and this will happen to my pension. I’ll have to check the details but it’s something called the Guaranteed Minimum Payment or something like that My bank pension is going to be reduced by this amount ( can’t remember how much it is off the top of my head) when I receive the state pension. I’ll have a look when I have time. I was a bit pissed off when I saw it I have to admit. The serps thing is something different and that reduces the amount of state pension I can receive. Feel like I’ve been penalised with both pensions!

I’ve just checked and it’s not the GMP. It’s called a “state pension reduction” and it says refer to the scheme booklet for details which I guess I ought to do. There’s nothing I can do about it now so I just have to accept it but I don’t remember anything about the SERPS thing or this state pension reduction being explained at the time.

Been looking into it a bit more. Pension clawback. I will have to see how I will be affected.

I worked for a large insurer and once I hit retirement age the amount of pension I received from them reduced slightly due to me receiving old age pension. It was all explained in the letter I was sent and the scheme rules. Certainly not uncommon in old DB schemes.

What a horrible shock . I’ve never heard of a scheme reducing on receipt of a state pension

Interesting.

I think most of us don't read the small print of our workplace pensions, or maybe that's just me (at the time of starting the job I was too young to really care and it's not like there was anything we can say or do to make it different. And right now with my failing memory, it's quite possible I just forgot all about it.)

If you take a DB pension at state pension age (IE not "early") does the reduction often still occur? I'm assuming not, but i also know I'm not familiar my pension documents (not is MN!)

SERPS wouldn't cause you to have less than the full pension, SERPS would boost your pension. The thing that would reduce your pension is any period that you were contracted out of the state scheme. But in return you would have paid less national insurance and had a work place pension, which would have given a higher return

My husbands does this. Although they don't describe it as a reduction but as an enhancement before state pension. Same thing but sort of seems more palatable!

It seems grossly unfair and does impact lower earners more. It’s a set figure not a %. So the example I read. If the clawback amount is £2.5k and your pension is £50k we’ll not too terrible but if your pension is £10K then the impact is huge. Women in banking, particularly branch banking, when I joined in the 80’s were rarely promoted beyond the highest clerical grade. There was an unseen cut-off at the first managerial level.

No, because it’s not really a reduction - rather, the payment during period before state pension age has been enhanced from what it would otherwise have been. This is specifically related to choosing to take it early, so is irrelevant to pensions taken at normal pension age.

Why so rude? Are you like this in RL or just behind a keyboard....

If so called small print isn't explained and the drop off in pension is large, its not a % but a set amount... due to clawback that pension scheme members weren't aware off, then yes much like PPI or Emissions, its a scam.

As the pp said look at the Midland HSBC campaign? and learn...

Yes I think my pension is of the HSBC type as I worked for one of the other big retail banks and their employment packages were usually all very similar

I was redundant at 50, the privatisation of a nationalised industry led to our local offices closing. I got an enhanced pension (final salary scheme) straight away, which I knew would reduce when my SP kicked in at 60 (I was born before the WASPI women). It was a lifesaver, as I was the only earner, and the next job I got was initially much lower paid. I joined that pension scheme, and it made up the difference in income when I reached SP age. My SP is much less than even the old basic, partly my own fault. I had a few years of being a SAHM/casual worker before there were NI credits, then paid the reduced rate NI (Married women’s stamp) for a while, as well as being contracted out of SERPS.

No, with clawback, the reduction in your DB pension payment always occurs at SPA, irrespective of whether DB pension payments started early, late or on the scheduled age. Even if you delayed your SP, clawback kicks in on your DB.

Yours may not be the same, but do check.

My DH - John Lewis pensioner - has this. He didn't understand / clock this, but I did (it is indeed on the pension statements).
Does it only affect employees in large organisations? It's not in mine, thankfully.

Oh god another thing to worry about. I have an Anglian water final salary pension which I can take without reduction at 55yo. It’s obviously from ages ago and will only be worth about 2k a year. I have no idea if the figure they send me on my statements will go down at 67yo.

Well it's only DB pensions which only really existed in big organisations so pretty much yes.

If it affects your scheme it should be clearly stated on your annual pension statement so 🤞not.

On the ones I have seen this shows as additional amounts due between scheme retirement age and State Pension so they are selling it as an extra rather than a reduction.