About Your Benefits
Increases to deferred pensions
Deferred pensions increase before and after retirement. Increases to pensions in payment are described in the section Benefits on Retirement. This section explains how pension will increase before retirement.
Deferred pensions are made up of three components - Guaranteed Minimum Pension (GMP) (for those members who contributed after 6 April 1978, an increasing component (the increasing pension); and a non-increasing component (the non-increasing pension).
Guaranteed Minimum Pension (GMP) - if you contributed to the MPS after 6 April 1978
Before retirement, the GMP will increase broadly in line with the rate of increase of National Average Earnings.
An increasing component (the increasing pension)
The increasing pension, which includes benefits earned during Scheme membership (but excluding any GMP element) and any additional benefits awarded from surplus before privatisation, will increase in line with price inflation as measured by any annual increase in the Retail Prices Index. All of these increases are provided by the Scheme.
A non-increasing component (the non-increasing pension)
The non-increasing pension is made up of bonuses awarded from surpluses after 1994. No increase will be paid on this part of the pension, although (as with pensions in payment) new bonuses may be paid in future to help keep total pension in line with retail price changes.
Bonuses
Bonuses have been added to deferred pensions in 1997, 2000 and 2006 when reviews showed that there were surpluses in the Scheme. These bonuses are not guaranteed and do not increase annually.
Continuing payment of bonuses is not guaranteed; bonuses can actually decrease if a review shows that there is a large deficit in the Scheme, although overall pension will not be reduced.
Statements
Benefit statements, showing a deferred member’s entitlement under the Scheme, are sent out every three years. Where an MPS member also has active membership of one of the Industry Wide schemes, these statements are sent out annually.
When pension is due for payment
Full pension is payable from age 60, the Scheme’s normal Pensionable age. Three months before your 60th birthday, the Administration Office will confirm the amount of benefits payable and the arrangements which need to be made in order to draw them. If you have not heard from the administration office two months before his 60th birthday, you should contact the Administration Office directly.
