HPS2 Deferred Benefit Statements

[jsouthwell]

Aplogies if I'm beeing naive but I was shocked to receive my HPS2 statement recently. It states that my starting pension will be significantly less than I had been expecting, amounting to a 11% reduction compared with pensions team estimate in 2011. I was aware of the less favourable inflation protection in the new scheme but not aware of any significant affect before the pension start date. Is this something to do with the factors used to increases pre 1-3-01 accrued years before the normal retirement date age change? I would be interested to know if such a reduction is a known aspect of HPS2 and whether anyone else's experience is similar. Incidentally I left Halcrow in 2009 and my NRD is this July.

Best regards to all,
Justin Suthwell.

[Tony Green]

Justin
The revaluation of the pension before retirement will be affected by the move to HPS2 just as the increases thereafter will be but as the statement of benefits is on the transfer in October 2016 you wouldnt really expect to see that as it gives (my version at least does) the benefit at that date under HPS and under HPS2 for the pension and any temporary pension.  There may be some small increase from October 2016 to your NRD so I would suggest you go back to the pensions team  (if you have not already) to get an update for expected benefit at retirement and any explanation for the 11% difference that they may be able to offer.  I have a document saying there will be no increase in the temporary pension for 2016 even under HPS and though there was the 1% uplift in October you will have lost a 5% rise (more of less) at the end of the year and part of 2017. 11% still sounds a lot though.
Ideally share the outcome with those of us in a similar position!
Thanks
 

[Adam Schofield]

Any reduction does seem very odd - I would cross-check and as Tony suggests, ask the Pensions Team for an explanation. Have they missed a transfer in value, for example?
My HPS2 statement came thru last week, indicating the inflation increase since leaving and separate transfer in value, which all seemed correct and well presented so I could follow everything
I also see that we get CPI (with limits) on that deferred benefit until NRD on the whole lot. Whereas I had thought pre-1997 benefit would get zero indexation from date of transfer to HPS2, but actually this only starts from NRD itself. So that was (marginally) better that I was expecting.
Of course, no more 5% & RPI as it once was...

[Steve_2]

The column headed "HPS scheme revalued..." is actually your HPS2 pension excluding any uplift, not what your HPS would have been. You'll see it's 1% less than the next column.

My recollection is the revaluation under PPF and HPS2 is to 31st December 2007, or date leaving the scheme. I think the five year capped salary link from that date might be ignored? (Edit: perhaps its only ignored where the PPF underpin revaluation is more favourable, i.e. Where salary rise was lower than cpi)

[jsouthwell]

Thanks for all the feedback, I've raised my concerns with the pensions team and asked for the calculation. On re-reading the future revaluation criteria for years accrued before 01/03/2001 I'm wondering if the quoted figure doesn't include the late retirement factor for not taking that element of the pension until age 65. It hadn't read that way initially. I'll report back once I hear from the pensions team.