How it is done
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The information in this file is based on an official publication. You can see it at OCOP_pensions_increase.doc
When people were in public sector employment between 1978 and 1997, they acquired a Guaranteed Minimum Pension (GMP). This is not additional to their scheme pension; it was just a requirement under contracting out requirements that the scheme pension would not be less than the GMP.
It was also enacted that the scheme would not be required to index the GMP component. Instead, the DWP would calculate how much the indexation would have been, and would then pay this amount as part of the normal state pension. These rules applied equally to public sector and private sector employment. The DWP does it by setting up a "phantom" pension in their records
When a pensioner moves to a frozen country, the DWP no longer indexes this "phantom" pension.
In the case of private sector employment, that's the end of the story.
People in public sector employment get a special dispensation, as described in the official publication.
By the way, "public sector" or "public service" does not refer only to the civil service. It includes local government employment, teachers, policemen, doctors and nurses in the NHS, and lots more. If your pension comes through a local government scheme, or the teachers' scheme, or if it is paid by an agency such as Capita or Paymaster, then it is a public service scheme.
What is supposed to happen - and this publication seems to suggest it is automatic - is that the expatriate's GMP becomes indexed. Unfortunately, it is not automatic. DWP simply have no automatic procedure for telling the scheme managers that you are now in a frozen country and that consequently they should index the GMP portion of your pension. And the scheme is not allowed to do it on their own initiative.
Most pensioners in this position just do not know what their rights are. Nobody tells them. Not the DWP, not the scheme managers, just typical DWP -- nobody don't never tell nobody nuffin.
It is entirely up to you. You must tell the managers of the scheme. But even then many will not believe you. So you must insist. Ask them to tell the DWP, and to ask for permission to index your pension.
Once the DWP get around to it they will send a copy of form IPC SU 1131 to the scheme managers, who will then fill it up and send it back. Then your GMP will be indexed. The increase in the pension will be backdated.
You can see a copy of the form at IPCSU1131.pdf.
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