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Pension Pot
Comments
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Don't you think you should explain why it is correct ?No, it isn't. It will be correct 99% of the time.
Or are are you simply a control freak ?
I have been a member of three DB schemes in my time. All gave me CETV quotes on request. Two in fact ended up as wind ups and then forced CETVs upon me.
The third has given me CETV's free of charge once a year upon request since I left them in the 80s. Maybe that's the answer - you don't get the right to a CETV in some schemes until you cease to become an active member and become a deferred member?
Why can't you say such instead of straight bat deflections of a currently very topical question, else what else are you basing your 99% contrary assertion upon?0 -
Being able to find out the CETV ( the present value of the future income stream) isn't the same as having a money purchase pot, the value of which is directly linked to the underlying investments.0
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With a DB scheme, you can still open a DC pension alongside and use the new rules for that.
This is particularly helpful ( a must really) should you want to retire before your Scheme age pays out your pension in full.
Many DB pensions are reduced at 5% or more per year you take them early. So taking one 5 years early means losing 25% or more of your pension. Another PP will help to keep this from happening.0 -
"Find out the CETV" ? Do you not mean "offered a CETV"? (from which point it becomes an option for the next three months for you to say "Yes" and transfer it into a DC style "pot" which might only then satisfy the most pedantic notions of the correct use of the wordsandsy wrote:Being able to find out the CETV ( the present value of the future income stream) isn't the same as having a money purchase pot, the value of which is directly linked to the underlying investments.
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I am a little confused by atush' suggestion - where does the budget for contributions for the DC scheme - the one you might suddenly want to set up alongside the DB scheme - come from?
...Especially if you are of the opinion that you are already putting sufficient contribution into a complex opaque pension industry product (the DB scheme) in the first place? And how does setting one up help you release the value of the DB scheme early? (Should you dare to consider it!).
It doesn't, does it? The thought behind the suggestion is the opposite i.e. "Don't touch the DB pension until it is ripe for picking - meantime use the second stream of cash you've cunningly put into a DC scheme to cover you while you are waiting"!
We still don't even know if the OP is an active or a deferred member of the DB (final salary) scheme.0 -
......I am a little confused by atush' suggestion - where does the budget for contributions for the DC scheme - the one you might suddenly want to set up alongside the DB scheme - come from?
...Especially if you are of the opinion that you are already putting sufficient contribution into a complex opaque pension industry product (the DB scheme) in the first place? And how does setting one up help you release the value of the DB scheme early? (Should you dare to consider it!)....
His suggestion shown below. I would agree (as he says) it's a 'must' for early retirement.
For a start, most DB schemes have a generous funding from the employer, and a modest employee contribution, which can't be increased (other than by AVC's).
But the clue is in "should you want to retire before...". You would not usually be thinking about (say) 4 or 5 years before NRD without some form of assets. Whether these are savings you propose to make, or spouse's income, or savings you already have....
It is a matter of common sense, therefore, to throw as much as you can into a DC pension. You are getting a minimum of 20% tax relief, and you can then draw up to £10,600 fully tax free, on top of your 25% TFLS.
Sadly, these options were not fully available when I retired.With a DB scheme, you can still open a DC pension alongside and use the new rules for that.
This is particularly helpful ( a must really) should you want to retire before your Scheme age pays out your pension in full.
Many DB pensions are reduced at 5% or more per year you take them early. So taking one 5 years early means losing 25% or more of your pension. Another PP will help to keep this from happening.0 -
You dont have a pension pot or pension fund. You have a defined benefits pension. Your pension is provided as a range of "defined benefits" and is not subject to investment returns on funds.
Virtually none of the changes talked about have any impact on your type of pension.In the current climate isn't that a downright misleading answer ? - and from an IFA too.
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Not really, and quite insulting in my view.
Dunstonh has simply stated that the "virtually none" of the changes will affect the OPs DB pension.
Given OPs level of knowledge of pensions and limited information this is true. His pension will go on as before and there will be no impact on it. (Apart from the "potential" for a marginal change by recouping NI in a private DB scheme).
Dunstonh never said that the OP had any options to convert or do anything else since that was not the question the OP asked.Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.0 -
Many DB pensions are reduced at 5% or more per year you take them early. So taking one 5 years early means losing 25% or more of your pension.
Yes, but it means getting it for five more years. So if you draw it at 60 instead of 65, you may end up getting it for 25% more years. Moreover drawing a DB pension before your State Pension begins might be tax-efficient. If taking the DB pension leaves its widow's pension unchanged (it might, in some schemes: well worth checking) then drawing it early may be reasonably attractive.Free the dunston one next time too.0 -
Don't you think you should explain why it is correct ?
not for you, no. It has been explained many times on this forum previously but you choose to ignore............ what else are you basing your 99% contrary assertion upon?
the experience of others who illustrate more credibility than you.The questions that get the best answers are the questions that give most detail....0 -
I reckon everyone in a DB pension should get their one free annual CETV offer and check it against the cost of the same benefits outside the scheme to produce a warm glow of satisfaction.
Generally people only seem to do this for pension sharing on divorce and the results often show a large shortfall.0 -
Is a pretty good summation of what the average man in the pub might be observing at the moment:There has been a lot of chat recently about your pension pot or pension fund , after looking through my recent pension statements I can't see any figures that may equate to the total fund in my pension. Does anyone know if this is common practice or any reason as to why this information is not readily available. Thanks GK
[SIZE=-2]"How much is yours GK?" might someone say.
"I actually don't know" says GK - "I'll have a look and ask someone"
So GK has a look and asks someone on MSE
They tell him he doesn't have a pot or a fund. He has a promise of something different.
Back in the pub tomorrow, GK gets asked how he got on.
"Well I don't have a pot or a fund, I've got something many people only dream of - a defined benefit promise!"
"Oh, so hows that work then? Surely there must be something you can pick up with your name on it?"
"Well I am not entirely sure, but my annual pension statement tells me all I need to know and I feel very lucky"
"Well maybe you need to feel lucky, mate, if you still don't know what it's worth! What happens if you pop off? Does yer missus and kids get it all? How much then ? Trustees' discretion did you say? Wouldn't you rather have it in your own account before that happens?"
"Well apparently that's not how it works and I ain't got no pot and I don't need no pot."
"Right ... suit yourself, if you're sure."
"Well I'm not really, but those MSE peeps seem to know a good thing when they see it, and they reckon that's what I've got"
"Did they ask anything about your scheme or about you?"
"Er No, but they said I could start another pension because that's supposed to be real good too, and with that one I'll have a pot ..."
"OK ... Cheers for that, GK. Looks like you're buying then!!"[/SIZE]0
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