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    • lexington013
    • By lexington013 5th Mar 17, 8:38 AM
    • 247Posts
    • 335Thanks
    lexington013
    CETV & DB pension
    • #1
    • 5th Mar 17, 8:38 AM
    CETV & DB pension 5th Mar 17 at 8:38 AM
    Just wanted some advice on the above. I requested a statement from a previous DB pension scheme outlining pension at 65.
    Basically the pension would provide £21,740 per annum. What is a CETV? and what does this mean regarding my above DB pension scheme? Do I request a CETV figure from the DB pension scheme.
    Are we talking a large cash figure to reinvest?
    Am I right in thinking I could reinvest the CETV in lieu of the £21,740 per annum at 65?
    I have a personal pension pot also with circa £90,000 in it that I could take 25% tax free at 55 and utilise drawdown thereafter.
    I'm paying into a DC company scheme at present, but have only being paying into this for 3 years at 7% and employer puts in 7%.
    I'm currently 50 and looking to reduce my hours at 55 To part time (probably 3 days per week).
    Many thanks in advance.
Page 1
    • ischofie1
    • By ischofie1 5th Mar 17, 9:02 AM
    • 154 Posts
    • 122 Thanks
    ischofie1
    • #2
    • 5th Mar 17, 9:02 AM
    • #2
    • 5th Mar 17, 9:02 AM
    Yes CETV stands for cash equivalent transfer value and if you accept this you would be taking a large pot of money in lieu of your guaranteed DB pension.
    Whether it's wise to take this is a whole new can of worms but the 1st step in the decision process would be to request a CETV valuation.
    • roysterer
    • By roysterer 6th Mar 17, 7:55 PM
    • 125 Posts
    • 66 Thanks
    roysterer
    • #3
    • 6th Mar 17, 7:55 PM
    • #3
    • 6th Mar 17, 7:55 PM
    Yes CETV stands for cash equivalent transfer value and if you accept this you would be taking a large pot of money in lieu of your guaranteed DB pension.
    Whether it's wise to take this is a whole new can of worms but the 1st step in the decision process would be to request a CETV valuation.
    Originally posted by ischofie1
    Not guaranteed to get a large pot of money.
    I recently requested a CETV from a deferred DB valued at date of leaving £14250 including gmp in 2009
    Current value today is £17000 including gmp.
    Current age is 58. I was disappointed to receive a value of £290000 this only equates to x17 against today's value.
    Why can others equate to x30 or more??
    Do different schemes apply widely varied figures when calculating transfer values??
    I checked to confirm that the figure was correct and was assured that it was,
    So I have an easy decision to make by staying put.
    • sandsy
    • By sandsy 6th Mar 17, 8:09 PM
    • 1,132 Posts
    • 655 Thanks
    sandsy
    • #4
    • 6th Mar 17, 8:09 PM
    • #4
    • 6th Mar 17, 8:09 PM
    Not guaranteed to get a large pot of money.
    I recently requested a CETV from a deferred DB valued at date of leaving £14250 including gmp in 2009
    Current value today is £17000 including gmp.
    Current age is 58. I was disappointed to receive a value of £290000 this only equates to x17 against today's value.
    Why can others equate to x30 or more??
    Do different schemes apply widely varied figures when calculating transfer values??
    I checked to confirm that the figure was correct and was assured that it was,
    So I have an easy decision to make by staying put.
    Originally posted by roysterer
    Multiples are generally higher the closer you are to normal retirement age. But will also vary based on the exact mix of GMP to excess, relative rates of revaluation and indexation on each slice of benefit, spouse's benefits etc.
    • fifeken
    • By fifeken 9th Mar 17, 11:20 AM
    • 2,136 Posts
    • 1,097 Thanks
    fifeken
    • #5
    • 9th Mar 17, 11:20 AM
    • #5
    • 9th Mar 17, 11:20 AM
    Not guaranteed to get a large pot of money.
    I recently requested a CETV from a deferred DB valued at date of leaving £14250 including gmp in 2009
    Current value today is £17000 including gmp.
    Current age is 58. I was disappointed to receive a value of £290000 this only equates to x17 against today's value.
    Why can others equate to x30 or more??
    Do different schemes apply widely varied figures when calculating transfer values??
    I checked to confirm that the figure was correct and was assured that it was,
    So I have an easy decision to make by staying put.
    Originally posted by roysterer
    To look at the other side of the argument, if you took the cash you would need to get < 6% on it to get £17,000 per year, which should be achievable. 7 (?) years of that before the pension kicks in would take a lot of making up. Your thoughts?
    • kidmugsy
    • By kidmugsy 9th Mar 17, 2:10 PM
    • 9,368 Posts
    • 6,143 Thanks
    kidmugsy
    • #6
    • 9th Mar 17, 2:10 PM
    • #6
    • 9th Mar 17, 2:10 PM
    To look at the other side of the argument, if you took the cash you would need to get < 6% on it to get £17,000 per year, which should be achievable.
    Originally posted by fifeken
    What do you mean by "should"? Do you really think that getting 6% p.a. above inflation is a sure thing?
    • fifeken
    • By fifeken 12th Mar 17, 8:09 AM
    • 2,136 Posts
    • 1,097 Thanks
    fifeken
    • #7
    • 12th Mar 17, 8:09 AM
    • #7
    • 12th Mar 17, 8:09 AM
    What do you mean by "should"? Do you really think that getting 6% p.a. above inflation is a sure thing?
    Originally posted by kidmugsy
    No, not a sure thing. However, 10 years at £17,000 would cover 20 years of 3% inflation so that's up to life expectancy for the poster. That 10 years of £17,000 would also be earning and compounding which would also contribute to his/her coffers.

    I'm not necessarily advocating this approach, but the poster said it was an "easy decision" but the arithmetic makes it seem not so cut and dried.
    • lexington013
    • By lexington013 17th Mar 17, 4:04 PM
    • 247 Posts
    • 335 Thanks
    lexington013
    • #8
    • 17th Mar 17, 4:04 PM
    • #8
    • 17th Mar 17, 4:04 PM
    Ok so quick update. CETV figure returned today, it's a multiple of 25. Taking everything into account it makes more sense to leave the DB pension well alone. Plan is to take the private pension pots at 55. Taking the 25% TFLS and using income drawdown for 10 years. This would provide circa £15k per annum and exhaust the pot. Then take the DB pension at 65 which would be around £26k p/y inflation linked. I could take it at 63 years of age but there would be some reduction penalties due to taking it earlier.
    • xylophone
    • By xylophone 17th Mar 17, 5:01 PM
    • 21,994 Posts
    • 12,687 Thanks
    xylophone
    • #9
    • 17th Mar 17, 5:01 PM
    • #9
    • 17th Mar 17, 5:01 PM
    You have obtained a new state pension statement?

    https://www.gov.uk/yourstatepension?utm_source=Mail-Online&utm_medium=Partnership&utm_campaign=GTKY
    • AlanP
    • By AlanP 17th Mar 17, 6:05 PM
    • 806 Posts
    • 554 Thanks
    AlanP
    Ok so quick update. CETV figure returned today, it's a multiple of 25. Taking everything into account it makes more sense to leave the DB pension well alone. Plan is to take the private pension pots at 55. Taking the 25% TFLS and using income drawdown for 10 years. This would provide circa £15k per annum and exhaust the pot. Then take the DB pension at 65 which would be around £26k p/y inflation linked. I could take it at 63 years of age but there would be some reduction penalties due to taking it earlier.
    Originally posted by lexington013
    Taking Xylophone's point don't forget the SP kicking in at 66 so assuming you will get something like the new maximum of just over £8k a year that would give you £34k with your DB.

    If you wanted to smooth the income you could look at either running the DC pot down over say 7/8 years and then taking your DB a couple of years earlier and accepting the reduction they would apply; or, increase your payments into the DC pot whilst you are working f/time.

    Spreadsheet time.
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