CETV How much would temp you?.

ajbell

I have today asked for a CETV valuation on my deferred Final salary pension.
I am 50 and have a deferred final salary pension worth £10600 at 60 according to my latest statement.
It is guaranteed to grow at 5% a year in deferment and in payment.
I am lucky enough to be in another final salary scheme with my current employer with 10 years service so far. Also have a small avc with this pension too.


So how much would tempt you to transfer the deferred pension and what could you do with it?.

mania112

£750,000

only thing you can do is transfer it to a personal pension (and drawdown in retirement) = 25% tax free and flexible taxable withdrawals thereafter.

ajbell

So what am I likely to be offered?.

mania112

well 10,600 plus 5% for 30 years is just over £700,000 i think.

It'll be interesting to see, post back when you get the value

ajbell

Oh you were being serious?.


It is generous I suppose, I was thinking more like 20x so maybe £212000.

hugheskevi

It is guaranteed to grow at 5% a year in deferment and in payment.

Are you certain about this, and that it isn't something like increase by RPI with a cap of 5% and that it remains at 5% even if inflation increases above that level.

So what am I likely to be offered?.

Without knowing the discount rate used by the scheme (as well as quite a few other things) it is very hard to say. But I would expect the value to lie between about £350,000 and £550,000.

ajbell

just checked and yes it increases by 5% in deferment and In payment regardless of RPI. It has been deferred since 2001.

neilvw

Just a note that if you transfer it out, you will have to wait until 55 to take anything out. Taking benefits within the scheme at a reduced rate might be possible at 50; more likely that would be 55 at the earliest too.

ajbell

In Payment.


Pre GMP Age


Your pension will be increased annually by 5% per year (subject to
certain limits).


Post GMP Age


Your pension will be increased annually by 5% per year (subject to
certain limits). Any GMP is protected against inflation partly by the
Scheme and partly by the State. Further details are shown on page 5.


In Deferment.


Your deferred pension will increase by 5% each year over the


Period of deferment to Normal Pension Age.

neilvw

"increased annually by 5% per year (subject to certain limits)" - curious phrase.

Do you have the split of pension between GMP and excess?

ajbell

yes, about £1500 is GMP and the rest (£9100) is excess.