To take account of the State Pension, a deduction may be applied to your pension in payment.
The date the deduction applies is set out in the Scheme Rules. The deduction originally applied at the age State Pension was paid. However, over the years, the Government has changed the State Pension age, so it no longer aligns with the date the deduction applies in the Scheme Rules.
As these changes were introduced, the Trustee reviewed whether this impacted how the deduction was applied under the Scheme Rules and if any updates were required by law.
When the deduction is applied it is not the same for all members and it depends on your period of membership in the Scheme and the Scheme Rules that apply to your pension.
If you joined the Scheme on or before 31 December 1995 the deduction is applied to your pension at either age 65, or (if earlier) your State Pension age. However, if you’re a female member who stopped earning benefits in the Scheme before 1 January 1997, any part of your deduction earned before 17 May 1990 applies at age 60.
If you joined the Scheme on or after 1 January 1996, the information provided below does not apply to you and you do not need to take any action. The deduction was taken into account when you stopped earning benefits and we calculated the pension you had earned.
Due to a change in law in 1990, the Government was required to make sure that the age the State Pension was paid was the same for men and women. Under the Pensions Act 1995, it gradually increased the State Pension age for women so that by April 2020 it would be age 65 for everyone.
In 2011, the Government accelerated this plan so that the State Pension age became 65 for everyone by 2018. It has increased since and remains under review as life expectancy continues to rise.
The Trustee has a legal obligation to apply the deduction at the date set out in the Scheme Rules (as described above). This means that for some members the date the deduction applied will be earlier than when their State Pension is put into payment.
The State Pension deduction is applied to your pension automatically. We will contact you around six months before it is applied to remind you, and then a month before it is applied to confirm how much will be deducted.
You should find out when your State Pension age is, which is easy to do by entering a few details on the GOV.UK website. You can then see if the deduction will apply before you start receiving your State Pension and take account of it in your financial planning. If you’re not sure when your State Pension deduction will apply or you’d like an indication of the amount that will be deducted, you can find this information on a retirement quotation or your retirement finalisation letter, you can also contact the Pensions Administration Team.
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