When i transferred from previous employer to L E & S scheme - it went into a " TRANSFER ACCOUNT "

How does the account work:

Your transfer value is allocated to your own account.

The account is adjusted year by year, fully in line with the investment performance of the Lucas Pension Scheme.

When you retire:

# Your account is first used to provide any Guaranteed Minimum Pension from State Pension Age, any balance is then converted into a lifetime pension and added to the pension you have earned as a member of the Scheme.

# If your total pension exceeds the minimum level required by the State, the excess can be used on the Scheme's retirement options. These options are :

# Tax free cash

# A temporary pension to State Pension Age - if you retire early.

# Spouse's additional pension.

FRom reading the link that xylophone provided :

My understanding is that an "underpin" serves as an alternative to your "main pension" and the one that gives the best end result is selected - so you do not receive both..

My " underpin" ( The AVC fund ) originated from money i transferred from a previous employer, so if the above dfinition is correct, then if this AVC fund was not as good as the "main pension" then what happens to the AVC fund ? It cannot just vanish into thin air can it ?

regards - confused.com :-)

Think i will have to write a letter to the scheme trustees ( Mercer )



Looking at the details you have given I think that the situation must have been that you had a contracted out occupational pension with Wright - if so, you would have pre and post 88 GMP.

If so, Chapter 9 of the first link refers.

When Lucas accepted your transfer in, I think it must have been on the basis that at age 65, the Wright Pension must in the first instance be used to cover your revalued GMP.

With regard to

Tax free cash

# A temporary pension to State Pension Age - if you retire early.

# Spouse's additional pension.

the information here seems relevant


After TUPE, CSC became responsible for your pension.

I am assuming that when you left CSC, you had a statement which showed your deferred pre 88/ post 88 and excess pre 1997 DB pension.

(In 1997 the GMP system for COSR schemes ended in favour of the Reference Scheme Test).

As far as I can make out, you cannot access the so called AVC because it must first be used to pay you your revalued GMP at age 65.

However, this is only a best guess from a non-expert - Mercer should be able to clarify.

Have you obtained a new state pension statement?


As far as I can make out, you cannot access the so called AVC because it must first be used to pay you your revalued GMP at age 65.
Originally posted by xylophone

I get it if this is with respect to the transferred-in GMP, but how does it effectively frank the Lucas/CSC scheme pension which (it seems?) includes its own GMP? (Genuine question - I'm not 100% familiar with the possible ins and outs of private sector DB, and my first thought was that the Lucas/CSC plan must have been contracted-in.)

Thanks again for further replies both

Will draft a letter to Mercer asap asking them for an explanation ( in non-technical terms if possible )

And at same time will request an updated statement of main pension.

( They are happy to send these, as long as no more than one request per year, but tends to be a bit of a delayin me receiving them )

I get seperate statements for the " AVC" component, which shows the size of pot, where it is invested, etc. - had that one very recently which showed position as of July 2016.

Had a look at the Revaluation i had done in 2015.

At time of leaving CSC ( 1996 )

Post 88 GMP - £304.72

Pre 97 Excess - £413.60

Revaluation ( 19/08/15 )

Post 88 GMP - £1179.17

Pre 97 Excess - £681.61

This is for " main " final salary pension of course.

Does this help to explain how they are treating the " AVC" fund ?

Apologies, i should have posted this info in first post, it was stapled on the back of another letter, and i didnt notice it till now

From the information given in OP's latest post, it appears that there is no mention of a pre 88 GMP on the Statement of Deferred Benefits from CSC.

This could indicate that the Wright Pension was not contracted out but was a CIMP scheme.

This could indicate that in effect, the transfer value of the Wright pension (the so called AVC), is being used to frank the post 88 GMP on the Lucas/CSC pension?

At age 65, the "AVC" will first be applied to securing the revalued post 88 GMP with the balance being treated as the excess?

This would mean that in payment, the CSC scheme would have to index link the revalued post 88 GMP up to 3% CPI and the balance by scheme rules?

Again, this is a best guess because like hyubh, I am not over familiar with private schemes.

There is some information here https://ompensions.co.uk/media/255935/kb-franking.pdf

about franking.

And have you obtained a new state pension statement?


I've never seen a situation in which a DC transfer in is used to offset the scheme pension accrued under its own right. I would be surprised if this were legal.

That's not to say I won't be surprised, but...

The OP worked for Wright between 83/4 and 1990 and was a member of the pension scheme.

I can't make out whether the Wright Scheme was contracted in or contracted out, (COSR, COMP, or CIMP) and the OP has no record.

At all events, in 1990, he transferred his Wright pension to Lucas (which appears to have provided a COSR scheme) on the terms described in post 5 above in 1990.

If there was a pre/post 88 GMP in the Wright scheme, then one would have expected the Lucas Scheme to have taken on the responsibility for it?

Lucas TUPED to CSC in 1996 and the OP left the company shortly afterwards.

However, the statement from CSC shows no reference to pre 88 GMP.

Although the OP has been told that his Wright pension is separately accounted for as an "AVC" he is also being told that he cannot take it separately from the main pension since it is providing an underpin for the CSC pension.

Therefore it is "franking" the post 88 GMP in CSC and any part of the "AVC" not used for this will be added to the excess and provide standard CSC benefits?

Presumably Mercer will clarify in response to a direct request from the OP.

The OP's NI record might also throw some light?


Thanks for further feedback

Its all going over my head a bit now so i will draft an email to Mercer and report back on here.

To xylophone : Yes i have had a pretty recent state pension forecast and on track for full pension, my retirement date is July 2026 when i will be 66 +7 months.

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