Big bike forced off road by car on Bangkok highway - video

[stewjon]

I am looking for some informed input on some issues concerning my pension plan, about which I have been made aware of by the Trustees of the plan, as a result of my specific queries to them over the past two years.

I have been retired on pension since 1/1/95, and am a pensioner of a U.K. multinational insurance group, having been made redundant on 31/12/94.

I was divorced in March 2009, and married again in August 2010 in UK to a Thai citizen. We have lived in Thailand since Sept 2006.

There are two Rules of the scheme that I have now been made aware of, the combined effects of which very much reduce what I had believed would be the pension payable to my wife on my death.

There was always a general understanding on my part that the survivor's pension would be two thirds of my pension, this having been stated in various bulletins from the scheme over the years since I began employment in 1961.

I have also been aware that 'age disparity' rules that could reduce the two thirds base starting figure would be applied to a surviving spouse's pension, but I have only recently been provided with the precise details/ formula.

The Trustees have told me that the provisions below (despite one of them being clearly discriminatory in my view) are of very long standing in the pension scheme, although they did not give me an answer to when exactly they were introduced, which is what I had asked them. The have stated that the scheme sponsor (my ex-employer) makes the rules, and they (the Trustees) carry them out.

Age Disparity Rules (Survivor benefit)

a). Reduction of 2% per annum on the base two thirds amount, for each year by which the survivor is younger, excluding the first 10 years of difference.

. For pensioners who married or remarried after retirement, the base of two thirds is cut to one third (i.e. halved compared to a). and a reduction of 3% per year, excluding the first 5 years difference applies to the one third base.

It seems to me that . is both arbitrary and discriminatory. Any scheme funding concerns about big age differences between those who married in retirement, would be compensated for by the bigger percentage reduction at 2 % due to the greater number of years to which it would apply.

This rule . gets further complicated. I noticed on the photocopy of the scheme rules the Trustees sent me at my request that there was a hand-written annotation 'see supplement'.

On further enquiry I was told in writing that effective 6/4/97 rule . was changed so that the base amount was increased to two thirds (in line with a). I had asked for a copy of this 'supplement' but one was not provided to me.

However, the benefit of that improvement applied only to members who both retired and remarried after 6/4/97. The pension for those potentially qualifying under this rule supplement was effectively doubled compared to what it would have been under the original rule.

Under existing rules my wife would get 19.3% of my pension, because the position of those who retired prior to 6/4/97 remained at on third. Had the rule change applied to all, my wife's potential pension would be 38.6% of mine, which would be an amount she could live reasonably on

This 'supplement' change seems the most discriminatory of all against those who retired earlier than 6/4/97 (even as little as one day earlier).

Occupational pensions in U.K. fall under scrutiny of and regulation by the government.

What I would like to know is whether or not the rule change 6/4/97 is legal / permissible under the terms of regulations relating to such schemes in U.K.

If I end up thinking it might be worthwhile, I would then have to consider raising a query with the Occupational Pensions Advisory Service in U.K, but would like to have some feedback first to decide whether or not prospects exist for a further rule change.

Any knowledgeable input would be much appreciated

Stewjon

[symeoud]

Hi. We probably worked for the same company in the UK.

However, I do not see anything wrong with the requirement for a reduction in pension of a spouse in the event of re marrying to a much younger woman, before or after retirement. After all, the money paid by the company in the pension fund was more than generous, and did not provide for the pension to be paid, potentially, for tens of years after our deaths. We should be grateful new wives get something, without contributing anything to the pension fund.

[stewjon]

I agree with you point so far as it goes.

However,the surviving spouse reduction (two thirds to one third) for those who marry in retirement is double that for those who die with a spouse they married when in employment.

On top of that the age reduction percentage is double (3% compared to 2% per year) and applies to years above 5 years age difference, compared to years above 10 years for others.

The least equitable difference however is that from 6/4/97 those who retired after that date and remarried, had the spouse base point increased to the two thirds basis.

I disagree that money paid in was 'more than generous'. The non-contributory pension plan was a company requirement, and in some measure recognised the fact that salaries paid while actually in employment were (and probably still are) overall significantly lower than those in comparable financial service industries.

We each have on opinion on this. What I am trying to establish is whether the 6/4/97 change was legal as it did not benefit the whole pension 'community', but only those potentially benefited those affected from that date forward.

Thanks for your input. I hope to get some more. Stewjon

[stewjon]

One point I overlooked from your message.

The plan does not contemplate pay-out of surviving spouse benefit 'tens of years' after pensioner's death. The benefit is in fact payable immediately on death of the pensioner, regardless of the age of the surviving spouse at that date.

[symeoud]

Hi. You left out the word "for" from your quote. Makes all the difference to the meaning of the sentence (i.e. the pension could be paid FOR many years after the pensioner's death.

[stewjon]

Sorry, you are right, I misread your comment, which is true, but I remain sceptical that the 6/4/97 change (for some)would be considered a 'fair' change by pension scheme regulatory authorities as it is discriminatory in that it does not benefit all.

Pension contributions by the company to the scheme are a factor of salary in service, and pensions built up prior 6/4/97 inevitably cost the scheme relatively less than pensions built up subsequent to that date and on-going.

Thanks for your interest.

[PattayaPhom]

The fact is, rules can be changed at anytime. RPI-CPI, minimum age 50-55. Its unfair but thats the way it seems to be.

[stewjon]

You are right on that point, but I think only if such changes do not discriminate, which the 6/4/97 definitely does.

Thanks for your comments.

I'm still hoping for more comments that would help me decide if referring the issue to the Occupational Pensions Advisory Service would be a good idea. I don't want the Trustees / ex-employer in the loop about my concerns until I have some solid support for my viewpoint.

[changnaam]

Also you need to consider the history of such pension schemes. They were developed in times when husbands worked and wives looked after children, and supported the husband so he could concentrate on being the breadwinner. When the husband passed away the wife, if still alive was entitled to part of the pension as she had contributed towards his career.

Times have changed and pensions have changed to take consideration of this. I am not an actuary but imagine the cost to a pension scheme to provide for a 28 year old Thai wife when they are able to claim 60% of pension for potentially another 60 years?

[stewjon]

Thank you for your comments. Not really on my point, but appreciated nonetheless.

You might be surprised to see an example of how this works in my scheme.

Assume the 28 year old wife was married when in retirement, and the husband (the pensioner) is aged 65. This wife would receive 1/3rd of the deceased's pension as a starting point. Say his pension is £21,000 per year, this spouse's base survivor pension would be £7,000 pa.

That amount is then subject to the age difference reduction ( 37 years less the first 5 years) i.e. 32 years x 3% = 96% reduction on the £7,000 for an actual survivor's pension of £560 per annum.

We are not talking about actual figures that are likely to seriously impact a sound pension scheme. No-one in my wife's position is going to be other than able to get by under such a provision, even if the same rules applied. I am simply trying to ensure that I do the best for my spouse after my death, and this is one area that I am working on to see if anything can be done before I die (not imminent fortunately).

For a surviving spouse married while still in pensionable service, and with the same age difference, her pension would be 2/3rds base for a base of £14,000. The age reduction for this spouse would be 37 yrs less the first 10 yrs i.e. 27 years x 2% (not 3%) = 54 % reduction, producing an actual survivor's pension of £6,440.

This is 11.5 times greater than what the spouse married in retirement would get.

I think this example shows clearly what I consider to be the inequality, and discriminatory nature of the conditions applying for spouses married while in retirement.

It is even more galling for me (and those few others likely to be in my position)that the condition was changed 6/4/97 so that

those who retired after that date and subsequently married or remarried, have had the spouse base amount reinstated to the generally applying 2/3rds. I retired 2.5 years before that date on redundancy, so miss out on that improvement.

So far no-one seems to think along the same lines as me, but the interesting comments I have had so far are all appreciated.

[symeoud]

Hi, again.

About 10 years ago I was playing poker in a casino in the UK. I needed a 10 of diamonds to make a Royal Flash, and I got a 9 of diamonds. The 10 would have given me £980,000, instead I got about £20 for the Flash. That is life.

Having said that, there is nothing to stop you from applying to the pension service mentioned earlier, and wait for the outcome. Are you afraid your ex employer will not give you a good reference for your next job? Good luck.

[stewjon]

Can't think of any suitably funny reply, but I'm not a gambler, and I've got pretty much a full time job looking after wife, daughter and granddaughter, niece, and mother-in law. No complaints, just enough to keep me on my toes.

[PattayaPhom]

Your pension was vested before the budget legislation took effect in 97 thats the simple answer.

Sent from my ST27a using Thaivisa Connect Thailand mobile app

[PattayaPhom]

Even now when asking fir a transfer or vesting quote from a provider it will detail benefits pre and post 97

Sent from my ST27a using Thaivisa Connect Thailand mobile app

[changnaam]

Stewjon, your last post sums it up, if I am reading correct. A wife, who was a wife before retirement is entitled to more benefits than one who became a wife after retirement.

Makes sense, the wife in situ when working is entitled to more than the wife who appears when the work is finished. Harsh but fair IMHO

Sorry it is not what you want to hear, wish you luck with it.

[stewjon]

Hi Changnaam. Yes you are right about how the plan treats one set of survivors v. another set. That is what I believe to be discriminatory.

I've started new lines of research and have found The Equality Act 2010, U.K.

From my layman's initial review of this law, I am convinced that that the pension scheme can not continue to do what they currently are doing, because they are discriminating on the basis of marriage in an employee benefits area, which is appears to be action specifically prohibited by the law.

I guess they are now well aware of this law and either are currently working on changes to comply with it, or alternatively 'keeping their heads down' and waiting to see if anyone starts to 'make waves'.

While an age disparity percentage reduction may be allowed by the law if it applies to all, ( despite discrimination on the basis of Age being forbidden under the act), the fact that because of marriage alone, other heavier 'penalties' apply to another group almost certainly will not be allowed.

Of course most Brits in Thailand will know that as regards U.K. State pensions, the govt. does not pay inflation increases for Thai residents, that they do give for residents of many other countries (e.g. USA). While clearly discriminatory, a legal action on that issue (for a resident of Australia) went all the way to the European Court of Human Rights. Despite the legal case being a virtual 'slam dunk' for a win, the case was rejected by that court, ruling that it was a subject on which the member state had final jurisdiction.

I would appreciate any more input that can be provided, especially from anyone who has some level of knowledge of the Equality Act 2010.

Thanks again.

[stewjon]

I guess I will close this subject now. I am in touch with The Pensions Advisory Service in U.K. about The Equality Act 2010.

Initial brief feedback from them does not look promising for my case, but I am providing full facts, and still have some optimism. It seems that despite this law, in the context of occupational pension plans at least,discrimination on the basis of marriage may be allowed in some circumstances.

Thank you all for your input on my original enquiry.