Pension due in june

joebob

I am 55 in june and just received my figures from coors brewery, I have not paid into it for 5 years as we got took over by dhl, and were forced out of the scheme. It was a final salary pension. the options are
4200 pa and 28000 lump sum or
6800 pa and 28000 lump sum then at retirement age drops down to 2100 pa plus 50% of pension to spouse on my death. I believe the pension options ( 4200 6800 ) will increase with inflation, does any one know if the levelling option of 2100 pa would increase,or would it be fixed untill retirement age.
had a quick look on annuity comparison sites and nothing better than what i have been offered. planning to retire at 60 so thinking the levelling option would be better,Dont know if i could take all pension pot will have to make phone call, any thoughts

kidmugsy

joebob wrote: »

4200 pa and 28000 lump sum or
6800 pa and 28000 lump sum then at retirement age drops down to 2100 pa

When you say "retirement age" do you mean the age at which you will get the state pension? When you say "4200 pa and 28000 lump sum" are you referring to age 60?

Assuming that the answer to both questions is "yes":

On the face of it you'd gain £2600 p.a. from 60 to (what?) 67, and then lose £2100 p.a. until death. Unless you've an objective reason to assume a short lifespan, that doesn't look like good value to me.

You should also tell us what the widow's pension will be for each option, not just for one of them.

xylophone

You have a deferred pension in the Coors Final Salary pension scheme?

This is your booklet?

http://molsoncoors.xpmemberservices.com/General-Information/Plan-Information/Deferred-Pension.aspx

You plan to work until state pension age? This will be for Coors and you are contributing and will continue to contribute to the DC Scheme?

https://www.gov.uk/new-state-pension/overview

Is the NRD of the FS Scheme 60?

The figures you have been given relate to taking the pension at 55?

"The minimum early retirement age is age 55 and your deferred pension will be subject to a reduction of 4% per annum (pro-rated for your age in years and months) if taken before Normal Retirement Date. You may also choose to commute part of your pension into a tax free cash lump sum in which case your annual pension will be reduced accordingly."

With regard to the levelling option

"Levelling Option
State retirement pensions cannot be paid until your State Pension Age (SPA). The Plan has a levelling option which enables you to have a temporary uplift in your pension until you reach SPA in return for a lower pension from the Plan thereafter. If you are retiring early, this helps to make up for having no state pension at the start of your retirement producing a more level income throughout the whole of your retirement. However, once you have decided to take the levelling option you cannot switch back. Full details of the levelling option, and any restriction applied by the Trustees, will be included in the pension options given to you shortly before you retire, if applicable."

How much of the pension you receive at state pension age will be pre 88 GMP and how much post 88 GMP?

Under the new state pension regime, this will not be increased as heretofore with the state pension- (see increase page in booklet).

dunstonh

I am 55 in june and just received my figures from coors brewery

Is the scheme age 55 or different (e.g. 60 or 65)?
What are the penalties for taking it at 55?

had a quick look on annuity comparison sites

Annuities have nothing to do with what you have.

joebob

kidmugsy wrote: »

When you say "retirement age" do you mean the age at which you will get the state pension? When you say "4200 pa and 28000 lump sum" are you referring to age 60?

Assuming that the answer to both questions is "yes":

On the face of it you'd gain £2600 p.a. from 60 to (what?) 67, and then lose £2100 p.a. until death. Unless you've an objective reason to assume a short lifespan, that doesn't look like good value to me.

You should also tell us what the widow's pension will be for each option, not just for one of them.

The 4,200 and 28,000 lump sum is payable at 55 and for life
The 6,800 and 28,000 lump sum is payable at 55 until age 66 then drops to 2,100

joebob

xylophone wrote: »

You have a deferred pension in the Coors Final Salary pension scheme?

This is your booklet?

http://molsoncoors.xpmemberservices.com/General-Information/Plan-Information/Deferred-Pension.aspx

You plan to work until state pension age? This will be for Coors and you are contributing and will continue to contribute to the DC Scheme?

https://www.gov.uk/new-state-pension/overview

Is the NRD of the FS Scheme 60?

The figures you have been given relate to taking the pension at 55?

"The minimum early retirement age is age 55 and your deferred pension will be subject to a reduction of 4% per annum (pro-rated for your age in years and months) if taken before Normal Retirement Date. You may also choose to commute part of your pension into a tax free cash lump sum in which case your annual pension will be reduced accordingly."

With regard to the levelling option

"Levelling Option
State retirement pensions cannot be paid until your State Pension Age (SPA). The Plan has a levelling option which enables you to have a temporary uplift in your pension until you reach SPA in return for a lower pension from the Plan thereafter. If you are retiring early, this helps to make up for having no state pension at the start of your retirement producing a more level income throughout the whole of your retirement. However, once you have decided to take the levelling option you cannot switch back. Full details of the levelling option, and any restriction applied by the Trustees, will be included in the pension options given to you shortly before you retire, if applicable."

How much of the pension you receive at state pension age will be pre 88 GMP and how much post 88 GMP?

Under the new state pension regime, this will not be increased as heretofore with the state pension- (see increase page in booklet).

no I plan to retire at 60
not sure what NRD is
yes the 4% pa has been taken off
not sure how to find out about pre and post 88 GMP

Daniel54

joebob wrote: »

no I plan to retire at 60
not sure what NRD is
yes the 4% pa has been taken off
not sure how to find out about pre and post 88 GMP

NRD = Normal Retirement Date

The big question is,if you plan to retire at 60,why do you wish to take the pension 5 years early with such a hefty reduction ?

joebob

dunstonh wrote: »

Is the scheme age 55 or different (e.g. 60 or 65)?
What are the penalties for taking it at 55?



Annuities have nothing to do with what you have.

Penalties 4% a year
think the scheme was 65

joebob

Daniel54 wrote: »

NRD = Normal Retirement Date

The big question is,if you plan to retire at 60,why do you wish to take the pension 5 years early with such a hefty reduction ?

The scheme closed in 2009 so not really increasing in value.
was thinking if I took the 6,800 pa 34,000 over five years I
would not loose that much in penalties, and had the money to spend save or enjoy.

dunstonh

So, why do you want to suffer penalties to take the pension now rather than at 60 or 65?

The scheme closed in 2009 so not really increasing in value.

Its not a value based scheme. it is a defined benefit scheme. The benefits increase annually.

xylophone

The scheme closed in 2009 so not really increasing in value.

Surely it is revaluing in deferment?

https://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/18/what-is-a-gmp/

https://www.barnett-waddingham.co.uk/comment-insight/blog/2012/07/24/revaluation-for-early-leavers/

At a 4% reduction for each year before NRD you are losing 36% of the value of your pension?

Ask the Scheme Administrator about your pre 88 and post 88 GMP at the date of leaving the scheme and on what basis it revalues in deferment.

How much of the £2100 represents pre and post 88 GMP?

If you take the pension now, will you be pushed into paying higher rate tax?