CETV How much would temp you?.

ajbell

It does, 4% reduction per year so about £8500 at 55.

neilvw

The annuity rate at age 55 is 1.78%, so £392k would need to be invested now on the same basis as my earlier post.

Let's see what the transfer value turns out to be, but I would be very loath to give up that guaranteed income personally.

neilvw

Oh, and find out what they meant by the following:

"increased annually by 5% per year (subject to certain limits)"

Pensioners may be getting their 5% now, but there could be some get-out clause which means they can be paid a lower increase at some point in the future.

neilvw

One other thing: tax-free cash lump sum rights?

EDIT: And death benefits in deferment? I assumed a 50% spouse's pension on death in retirement, is that the case?

(RE-EDIT: it does seem to be 50% judging by the benefits on death in service/deferment)

ajbell

Death benefits


A lump sum of four times the greater of Pensionable Pay or
Basic Pay on the date of your death.
+
An Adult Dependant’s pension OR Eligible Children’s pensions
of one-half of the pension you would have received if you had
remained in Pensionable Service until the Normal Pension Age
in force at the date of your death.
+
A refund of your own contributions with interest.

ajbell

If you leave the Scheme and die before your pension starts, Adult
Dependant’s and Children’s Pensions will be payable as if you had
retired on the day before your death


a lump sum equal


to the member’s contributions is payable

ajbell

I can't seem to find what the "certain limits" are.


This is a pension scheme that was incorporated into Royal Ordnance and then Baesystems and has its own set of rules.
It is closed to new starters and I am probably the youngest person in it.

neilvw

I would ring and ask about the "certain limits".

And what is the tax-free cash lump sum you can have, and what does it reduce your pension to?

ajbell

£10596 at 60.


Or £7626 and £50842 from my last statement in april.

neilvw

A commutation rate of £17.12 lump sum per £1 pension given up. Given the 5% increases in payment, not a particularly good commutation rate I don't think.

Once you have the transfer value, you can think of what that might grow to in a personal pension over the years up to when you want to take benefits (if it grows!) and see what a 25% lump sum would be.

How important to you are death benefits for spouse/dependent children?