what is a final pension salary worth

Mr_Incredible

as a % of your salary?

I currently have one and I've been sent other job possibilities my an RC which don't, so in order to compare monetarily what is my FPS worth?

opinions4u

Assuming it's based on 60ths I'd estimate 25%-33% of salary.

Andy_L

Depends on the specifics of the scheme but a ballpark estimate for a "typical" scheme would be 20-30%. However that number is very sensitive to the assumptions you make about longevity/career path/inflation/investment returns etc

Mr_Incredible

opinions4u wrote: »

Assuming it's based on 60ths I'd estimate 25%-33% of salary.

IT is currently but shifting to 1/49 from 2014 although it then also shifts to average salary pension. Doesn't bother me at middle tear though, I'm pegged out

Batchy

The normal contribution level for employers is 22%, but dont take this figure on its own.

On top, you have your death in service benefits, which can cost the company around 500-1000 per annum

On top you may have life insurance again the same £500 - 1000 per annum

On top of that the scheme is probably under some kind of recovery plan to recoup the under investment from previous years.

For a scheme I am involved in you could say this is currently an average of 12k per annum for a good few years yet.

Ive worked this out to be costing the company 50% of salary at the moment.

Then on top of that the fees for administering it, and what not cost an additional sum, All in all, for administration/ PPF levys/ Management fees, Administrators fee, Trustee pay, etc, etc.

It wouldnt surprise me if realistically for a small scheme, it can cost the company anywhere from 50% to 80% of salary.

Shocking, but in years gone by, contributions were only 7% and fee's were quite low, since there was simple management.

How times change.

Take it while you can it will almost definately be the only way to guarantee some income in retirement that is inflation linked and only costs you circa 4.5% plus of you own direct income.

atush

30+% as many come with Death in Service Benefits and others (incl a guaranteed min spousal pension)

bigmatt1174

The figures of 25-30% being banded round are in my view dangerous . Without knowing the accrual rate, the length of service, any penalty for leaving the scheme early and taking the money early, you cannot say what the average is!

Mr_Incredible

Its a LGPS

DavidLaGuardia

bigmatt1174 wrote: »

The figures of 25-30% being banded round are in my view dangerous . Without knowing the accrual rate, the length of service, any penalty for leaving the scheme early and taking the money early, you cannot say what the average is!

I'm not agreeing or disagreeing with the figures but a meaningful average in any representative sample CAN be worked out. The figures may be different for each individual, but the only way of doing this is for each individual to run some different scenaarios and compare the likely cost of meeting these benefits if they were not in the scheme. Given that life is unpredictable a mean figure is not a bad starting point.

antonic

Prior to changes to the PCPS Civil Service Scheme, after 38 years service it was projected that I would get the following @ 60 (as a member of the Classic Scheme)

1) A Pension of approx £8500.00 pa
2) A Lump sum of £25500 (3 x pension) and if I was to die in service
3) A Lump sum of approx £40000.00 (2 x my annual wage) to my niece.

The Classic Scheme accrues at the rate of 1/80th per year.

When the Scheme changes in 2015, I will have accrued 26 1/2 years contributions and as I am planning to do the full 40 years, this means that I will accrue 13 1/2 years under the new scheme.

Unfortunately no one knows what the new scheme will be , but I DO accept that its time for me to pay towards to my pension as so far I havent had to pay a penny.

Mr_Incredible

Batchy wrote: »

The normal contribution level for employers is 22%, but dont take this figure on its own.

On top, you have your death in service benefits, which can cost the company around 500-1000 per annum

On top you may have life insurance again the same £500 - 1000 per annum

On top of that the scheme is probably under some kind of recovery plan to recoup the under investment from previous years.

For a scheme I am involved in you could say this is currently an average of 12k per annum for a good few years yet.

Ive worked this out to be costing the company 50% of salary at the moment.

Then on top of that the fees for administering it, and what not cost an additional sum, All in all, for administration/ PPF levys/ Management fees, Administrators fee, Trustee pay, etc, etc.

It wouldnt surprise me if realistically for a small scheme, it can cost the company anywhere from 50% to 80% of salary.

Shocking, but in years gone by, contributions were only 7% and fee's were quite low, since there was simple management.

How times change.

Take it while you can it will almost definately be the only way to guarantee some income in retirement that is inflation linked and only costs you circa 4.5% plus of you own direct income.

This is an excellent post, thank you for taking the time.

Its a Logal Government pension Scheme and it does provide spousal pension if I die and death in service benefits. Sounds like its worth sticking where I am.