Final Salary Pension

cb4fwh

I have a final salary pension which ran from 01/02/01 to 31/03/2005. I was actually employed with this employer from 31/07/00 to 31/03/2005. My salary upon leaving the company was approx. £32,000 per annum.

Ideally, I want to understand exactly how much this will be worth upon retirement at 55.

Is this possible?

Out of interest, I did enquire about a transfer value (although I have no intention of doing so). This was £15,983.00, made up of post 6 April protected rights of £5,291.40, & post 6 April non-protected rights of £10,691.60.

The document also talks of my 'deferred' pension - a post 97 pension of £2623.20, which is 'revalued in line with statutory index, up to a maximum of 5% from your date of deferment to your pension commencement date'. What does this mean!?

Thanks.

kidmugsy

cb4fwh wrote: »

I have a final salary pension which ran from 01/02/01 to 31/03/2005. ... Ideally, I want to understand exactly how much this will be worth upon retirement at 55. ...

The document also talks of my 'deferred' pension - a post 97 pension of £2623.20, which is 'revalued in line with statutory index, up to a maximum of 5% from your date of deferment to your pension commencement date'. What does this mean!

The first thing is to find out is whether the scheme will let you draw the pension at 55. The second is whether that is earlier than the scheme's normal retirement date (it's likely to be) and, if so, what the penalty is for taking it early.

You don't tell us the date to which the £2623.20 refers - is it the date you left the job? Anyway, whatever the date, that annual pension is increased from then in line with the annual rise of an inflation index (RPI initially, I assume, CPI now) unless the rate of inflation exceeds 5% in a particular year, in which case the pension is increased by only 5% that year.

At least that's what I suppose it means: strictly it's not what is actually said by your quotation. Are you sure you are quoting verbatim?

mania112

cb4fwh wrote: »

The document also talks of my 'deferred' pension - a post 97 pension of £2623.20, which is 'revalued in line with statutory index, up to a maximum of 5% from your date of deferment to your pension commencement date'. What does this mean!?

Thanks.

A pension is 'deffered' after the member has left service but before he/she takes the benefits - such as yourself.

Don't worry about 'post 97' it's just a point in time when certain regulations changed.

The important part is that you had £2,623.20 pa on the date you left, which is increasing each year in line with inflation, up to a max of 5% pa.

Once in payment it will probably continue to increase and probably at the same rate.

cb4fwh

Brilliant, thanks both all is clear now!

I will dig deeper re. understanding whether it is actually possible to retire at 55 & the corresponding impact on this 'deferred' amount.

Many thanks.

Bigmoney2

cb4fwh wrote: »

Brilliant, thanks both all is clear now!

I will dig deeper re. understanding whether it is actually possible to retire at 55 & the corresponding impact on this 'deferred' amount.

Many thanks.

There may be a web site with info regarding the pension scheme.

My company final salary scheme will allow early retirement from 55 with trustee agreement, however there is an actuarial reduction for this. Mine is 5% for each year you go before the scheme normal retirement date of 65.

Yours may be different e.g 4% or 6% and the schemes NRD may not be 65, but these figures are fairly typical.

StephenM_2

Bigmoney2 wrote: »

There may be a web site with info regarding the pension scheme.

My company final salary scheme will allow early retirement from 55 with trustee agreement, however there is an actuarial reduction for this. Mine is 5% for each year you go before the scheme normal retirement date of 65.

Yours may be different e.g 4% or 6% and the schemes NRD may not be 65, but these figures are fairly typical.

In mine it is 4%,but only for active members who take their pension immediately after they leave the company. The reduction for deferred members, such as the OP, is bigger.

atush

Generally speaking there tends to be quite a large reduction for taking the pension early so I would not recommend it. I would fund ealy retirement in other ways from personal pensions to savings and investments.