Deferred company pension

eastcorkram

One of the deferred company pensions I have, sent me a letter. It was with RTZ, and now seems to be run by Towers Watson. I worked for RTZ , I think from 1982-1990.

It says, 'your deferred pension in the fund currently stands at £3447.52 a year. This includes an offset pension of £1409.47 a year which is payable on early retirement and would cease at age 65.'

I'm nearly 58. I'm not planning on retiring early. What is meant by that offset pension of £1409.47 a year. Do I just miss out on that, because I'm not retiring early? Seems a bit unfair. As that seems to be included in the other figure, does that mean at 65 I'd actually only get around £2,000? There is no mention of any TFLS. I may ask them for a transfer value. Would they charge for that? I mean just asking, not actually transferring. If it were worthwhile, I could transfer it to current company pension SIPP.

If anyone is going to ask about that RTZ scheme, and whether it's DC or DB or whatever, I simply don't know.

GSP

Yes would strongly recommend requesting a transfer out quotation from Towers Willis Watson. No charge for that one and you will get a pack through the post. If its avaliable, suggest you ask if there is an online system for your scheme where you can run off the same report daily and save it as a pdf file on your computer. This has the advantage where you can choose the best amount during a period, as long as your three months grace for each report does not expire.

Based on the amount you have been quoted, and if in a favourable scheme, you may be very pleasantly surprised.

xylophone

Have you obtained a new state pension forecast?

https://www.gov.uk/check-state-pension

If anyone is going to ask about that RTZ scheme, and whether it's DC or DB or whatever, I simply don't know.

It would seem that at the time you worked for the company you were in a DB Scheme.

http://www.telegraph.co.uk/finance/2887114/Blue-chip-pensions-that-refuse-to-retire.html

although now

http://www.riotinto.com/documents/RT_Annual_Report_2015_Notes%20to%20financial%20statements_post-retirement%20benefits.pdf

The defined benefit sections of the UK arrangements are linked to final
pay and are closed to new members

It is virtually certain that the value of the deferred pension is higher than £30,000 so that you would need to obtain and pay for the advice of a Pensions Transfer Specialist if you wanted to transfer out.

This thread may be of interest.

https://forums.moneysavingexpert.com/discussion/comment/72774295#Comment_72774295

Re "offset" see

http://www.mycompanypension.co.uk/Early-Payment-Preserved-Members-DB

but ask your administrator ( or check your scheme booklet if you have it) about what it means in your particular scheme.

Do you have the "statement of deferred benefits" from when you left RTZ?

eastcorkram

Thanks for the replies.
Yes, I've done the state pension forecast thing about a year ago. All in order. Can't remember the exact figure, but it said I couldn't increase it.
I have no booklet, statement, or any other paperwork other than that letter. It also states that the figure increases each year with inflation. I assume that means between now and retirement, and afterwards as well?
No idea if current scheme could be described as good. It's just a SIPP, with HL. I pay in 25%, company only pay in 2.5%. Done via salary sacrifice. Approx £700 per month going in. It's split between 4 funds, which have been doing fine. Obviously that could change overnight!

Out of curiosity, I may apply for a transfer value. Though to be honest, I don't know what the cut off figure would be, where it would be a good idea to move it! My natural instinct would probably be to leave it where it is. Though that decision would be easier if I could decipher whether I'm due to get £3, 500 a year or £2,000 at age 65.

xylophone

I have no booklet, statement, or any other paperwork other than that letter. It also states that the figure increases each year with inflation. I assume that means between now and retirement, and afterwards as well?

I'd suggest that you read through thread linked above and ask your scheme administrator the relevant questions.

GSP

I strongly advise you request a transfer now. With those numbers, in the right scheme you could be looking at anything between £150k and £200k, and being over 55 you could start drawing this money right now once you have gone through the IFA, TVAS report, transfer specialist etc "journey".

eastcorkram

GSP wrote: »

I strongly advise you request a transfer now. With those numbers, in the right scheme you could be looking at anything between £150k and £200k, and being over 55 you could start drawing this money right now once you have gone through the IFA, TVAS report, transfer specialist etc "journey".

I will apply, but would be very surprised if the transfer value was over about £35k. Can't see any sense in drawing anything now. I'd have to pay 40% tax on it.

eastcorkram

xylophone wrote: »

I'd suggest that you read through thread linked above and ask your scheme administrator the relevant questions.

I've read through that thread, though didn't really learn anything.
I will write to Towers Watson. Thanks.

xylophone

I've read through that thread, though didn't really learn anything.

Nothing at all?

It was https://forums.moneysavingexpert.com/discussion/comment/72774295#Comment_72774295

that you read through? Not even after link to

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

and the information provided to the OP of that thread by his administrators concerning the CETV of his pension in post 1 and subsequent suggestions concerning confirming his pre 88 GMP/post 88 GMP/method of revaluation chosen for revaluation of GMP/revaluation of excess/ index linking in payment/scheme pension age?

(if so, it is odd that you can say

but would be very surprised if the transfer value was over about £35,000)

See also https://www.finalsalarytransfer.com/l/calculator

You have learned nothing about the principle of off setting described in link to my company pension (under Step-up pensions, Bridging pensions, Pension Deductions & Offsets)
in my previous?

Clearly only general information can be given but at least you have learned the questions that need answering?

eastcorkram

xylophone wrote: »

Nothing at all?

It was https://forums.moneysavingexpert.com/discussion/comment/72774295#Comment_72774295

that you read through? Not even after link to

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

and the information provided to the OP of that thread by his administrators concerning the CETV of his pension in post 1 and subsequent suggestions concerning confirming his pre 88 GMP/post 88 GMP/method of revaluation chosen for revaluation of GMP/revaluation of excess/ index linking in payment/scheme pension age?

(if so, it is odd that you can say



You have learned nothing about the principle of off setting described in link to my company pension in my previous?

Clearly only general information can be given but at least you have learned the questions that need answering?

No, not really. You need to bear in mind that I'm thick.
GMP gets no mention in my letter. I've read your links twice. It doesn't really go in.

I'm basing my guess on a value, on the pension paying £2k a year. As I'm not retiring early, that's what I can deduce from their letter. Obviously unknown how long I'll live. But at 2k a year, why on earth would they offer me 100k transfer!?

I've asked for clarification, and a transfer value. Letter posted ten minutes ago. Thanks.

GSP

Keep the faith.
Yes why would they, but in cases they do. Maybe yours.