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3.13.2 Deferred Pension
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Benefits earned to date can be 'preserved' in previous employer's
pension scheme. There is a legal right to a preserved benefit if
the individual leaves with 2 or more years pensionable service.
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It should be borne in mind that:-
- Paid up pensions may benefit from discretionary increases made
by the ex-employer's scheme.
- There may be associated benefits (e.g. widow(er)'s pensions).
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In the case of a Money Purchase scheme, the accrued individual
entitlement will be allowed to increase with the value of the fund.
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In the case of a Final Salary scheme:
- There will be a guaranteed benefit.
- Pension benefits accrued after 1.1.85, in excess of any GMP or
requisite benefits, have to be revalued until retirement by 5% p.a.
or RPI if lower. For leavers on and after 1.1.91 all pension benefits,
in excess of GMP or requisite benefits, have to be so increased.
- Scheme rules may allow for higher revaluation than (ii) but not
at such a rate that would exceed maximum benefit levels by the time
NRD is reached.
- Pensions, once in payment, may benefit from guaranteed increases
(possibly in line with LPI depending on when the benefits were secured)
or discretionary increases.
- Paid up pensions may benefit from any future surplus arising under
the ex-employer's scheme
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