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    • johnsmithy
    • By johnsmithy 19th Apr 17, 7:31 PM
    • 73Posts
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    johnsmithy
    Pension Questions
    • #1
    • 19th Apr 17, 7:31 PM
    Pension Questions 19th Apr 17 at 7:31 PM
    Hi All,

    I have some questions about pensions I am hoping you might be able to answer.

    1. Is there anywhere on the Internet where you can use a simplified calculator to do an estimate on what a defined benefit pension will pay out at pension age (I know you can't forecast changes to the CPI etc. but as a rough estimate).

    2. If my pension scheme closed, would I lose my pension benefits? I have a DB scheme and am worried I would lose those if the scheme closed.

    3. On A DB scheme, forgive the question, but when you are told you are 'guaranteed' an income every year of so much, that is what you would get each year, so if I was 'guaranteed' £3000, I would get £3000? Sorry I only ask because I was speaking to a friend and there was an element of confusion about how this works precisely.

    4. What income would you need a year for a modest retirement?

    5. What factors influence the increase in your pension, if any, besides increases to cost of living etc.?

    Thanks for any help.
Page 1
    • xylophone
    • By xylophone 19th Apr 17, 7:47 PM
    • 22,351 Posts
    • 12,891 Thanks
    xylophone
    • #2
    • 19th Apr 17, 7:47 PM
    • #2
    • 19th Apr 17, 7:47 PM
    It appears that you worked for the Civl Service for eleven years and then left - you have a deferred pension for this period?

    http://www.civilservicepensionscheme.org.uk/members/deferred/

    You have recently started working for another employer with a DB Scheme?
    • quotememiserable
    • By quotememiserable 19th Apr 17, 8:52 PM
    • 386 Posts
    • 251 Thanks
    quotememiserable
    • #3
    • 19th Apr 17, 8:52 PM
    • #3
    • 19th Apr 17, 8:52 PM
    1. Your pensions team will send you an annual statement which contains this information
    2. Any benefits you've earned, stay earned. Schemes can only be closed to future earnings.
    3. Yes, you get £3000, and normally index linked if it's a DB. I think you're friend is speaking of a DC pension, which can only give illustrative figures.
    4 and 5 - those questions are entirely matters for you to decide.
    • MoneySavingUser
    • By MoneySavingUser 19th Apr 17, 9:54 PM
    • 1,602 Posts
    • 642 Thanks
    MoneySavingUser
    • #4
    • 19th Apr 17, 9:54 PM
    • #4
    • 19th Apr 17, 9:54 PM
    2. Any benefits you've earned, stay earned. Schemes can only be closed to future earnings.
    Originally posted by quotememiserable
    The exception being if the scheme goes into the pension protection fund because say the employer collapsed. In which you get 90% of the benefits IIRC. But this won't apply to you as it seems you are a member of a public sector scheme.
    • johnsmithy
    • By johnsmithy 20th Apr 17, 12:14 PM
    • 73 Posts
    • 23 Thanks
    johnsmithy
    • #5
    • 20th Apr 17, 12:14 PM
    • #5
    • 20th Apr 17, 12:14 PM
    It appears that you worked for the Civl Service for eleven years and then left - you have a deferred pension for this period?

    http://www.civilservicepensionscheme.org.uk/members/deferred/

    You have recently started working for another employer with a DB Scheme?
    Originally posted by xylophone
    Yes I do but I am looking for a new job but it appears that final salary/defined benefit schemes are more or less now replaced by DC schemes and that might not be a good thing.
    • johnsmithy
    • By johnsmithy 20th Apr 17, 12:17 PM
    • 73 Posts
    • 23 Thanks
    johnsmithy
    • #6
    • 20th Apr 17, 12:17 PM
    • #6
    • 20th Apr 17, 12:17 PM
    1. Your pensions team will send you an annual statement which contains this information
    2. Any benefits you've earned, stay earned. Schemes can only be closed to future earnings.
    3. Yes, you get £3000, and normally index linked if it's a DB. I think you're friend is speaking of a DC pension, which can only give illustrative figures.
    4 and 5 - those questions are entirely matters for you to decide.
    Originally posted by quotememiserable
    My concern is the index linked db pension could be hit in a way it may no longer increase with inflation or be increased under potential government plans - there was an article about this so I should not assume that my pension will increase indefinitely, so what now is the benefit of leaving a scheme with a db pension if it won't be increased, perhaps? Sorry but, as was mentioned in this article, it is controversial.
    • johnsmithy
    • By johnsmithy 20th Apr 17, 12:19 PM
    • 73 Posts
    • 23 Thanks
    johnsmithy
    • #7
    • 20th Apr 17, 12:19 PM
    • #7
    • 20th Apr 17, 12:19 PM
    This is the link to the article:
    http://www.pensionsage.com/pa/Govt-suggests-conditional-indexation-for-stressed-DB-pension-sponsors.php
    Makes me angry this.
    • Tealblue
    • By Tealblue 20th Apr 17, 12:42 PM
    • 593 Posts
    • 971 Thanks
    Tealblue
    • #8
    • 20th Apr 17, 12:42 PM
    • #8
    • 20th Apr 17, 12:42 PM
    If you've already left the scheme, you won't get an annual pension statement - that only applies to defined contribution (money purchase) schemes. As you say, you can't forecast inflation so it would be a pointless exercise, which is why defined benefit schemes don't (generally) issue statements to those who have already left.

    If the scheme closes, you won't 'lose' the benefits you have already built up.

    You will receive whatever benefit the scheme promises, with two main possible exceptions: if the employer goes bust the scheme might (but won't necessarily) go into the Pension Protection Fund; or if the law changes (which might impact on future increases to your pension once it is in payment).

    Your fourth question is impossible for anyone else to answer without knowing where you live, what you regard as a 'modest' standard of living.

    Future pension increases are unlikely to be based on anything other than inflation, unless the law changes to enable employers to reduce future increases OR (private sector only - and probably fantasy land!) the scheme has a thumping surplus and part of this is used to increase pensions in payment.

    It is vanishingly unlikely that you will get a new job in the private sector which offers a defined benefit pension scheme, so focus on getting the best overall pay package you can and start saving, looking at all options, not just pensions.
    • LHW99
    • By LHW99 20th Apr 17, 2:14 PM
    • 828 Posts
    • 650 Thanks
    LHW99
    • #9
    • 20th Apr 17, 2:14 PM
    • #9
    • 20th Apr 17, 2:14 PM
    And check what your state pension is likely to be, as that provides a 'fall back' income, which if you have 'modest needs' may well represent a useful base income to add to any personal provision.
    • hyubh
    • By hyubh 20th Apr 17, 6:40 PM
    • 1,859 Posts
    • 1,378 Thanks
    hyubh
    I thought you had a civil service pension? In which case none of that applies.
    • MoneySavingUser
    • By MoneySavingUser 20th Apr 17, 8:07 PM
    • 1,602 Posts
    • 642 Thanks
    MoneySavingUser
    I thought you had a civil service pension? In which case none of that applies.
    Originally posted by hyubh
    As posted above, this doesn't apply to public sector schemes.

    And if it did apply to you, would you rather the employer went bust and couldn't support the scheme anymore or some changes to the rules?
    • johnsmithy
    • By johnsmithy 20th Apr 17, 8:47 PM
    • 73 Posts
    • 23 Thanks
    johnsmithy
    Thanks for all your help everyone - sorry, I find this all so very confusing at times and am trying to make sense of it all for my future.
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