Final salary pension transfer

bostonerimus

Thrugelmir wrote: »

Reflects the underlying cost of an open ended committment to fund your benefits. DB schemes are making no secret of their wish to offload their liabilities. As the cost to them is increasing all the time.

A well run and funded DB plan should be able to support more income than a DC plan because of the mortality credit...e that assumes similar investments and fees. The investments of my DB pension fund have an average annual return of 9.4% over the last 10 years. Companies just don't want the risk and bother of managing DB plans.

Howards

Thanks again jamesd figures look interesting and helpful.....
Instinctively feels like wealth in fund is an attractive option with flexibility etc but
Security of guarantee is peace of mind..... I guess investment decisions shouldn’t be driven by
emotion so thanks for your analysis

With GMP the pension at 65 could be c20k and then transfer looks much less attractive ??
What do you think on that?...

Current political climate not helping decision and must admit entry time can be critical if big market drop almost immediately..... so still debating ?.

Clive_Woody

Have you checked whether you both be getting full state pension? If so then you need to factor that in and then using other funds to cover until this kicks in along with the DB may afford a comfortable retirement (and less stress as already mentioned).

Audaxer

Howards wrote: »

Not sure how you have arrived at commutation think pens difference is £1845 ..? bit confused on that

Looking at your figures, if the full pension is £11,725, and the option of reduced pension is £9,000 with a £60,000 lump sum, then the commutation rate is just over 22 which is pretty good. Therefore a less stressful option rather than transfer, could be to take the lump sum option. The the lump sum could be invested and the income generated added to the reduced pension, which could possibly match the income of the full pension. That is also likely to benefit your spouse as most DB pensions specify that the on death of the DB holder, the spouse would get 50% of the full pension, even if the lump sum option is taken.

Thrugelmir

bostonerimus wrote: »

Companies just don't want the risk and bother of managing DB plans.

Schemes started closing to new entrants in 1997 after the then Labour Chancellor raided their coffers. One of my old schemes has been in deficit ever since. This week I was sent details that the liability is being passed to an insurance company in the form of a buy out.

I did receive, unsolicited I should add , an attractive CETV. After making some enquiries I decided to leave the money where it was. The benefits being of sufficient value to warrant doing so. Not least the linkage to RPI providing a secure return.

The investments of my DB pension fund have an average annual return of 9.4% over the last 10 years.

And the ongoing liabilities? Is the scheme fuly funded or does the sponsor have a payment plan in place. Ultimately the success or failure of the DB scheme is reliant on contributions continuing to be made.

Howards

Thanks all for recent replies...appreciated

Can confirm have checked state pension and circa £8k for both of us

Very good point Audaxer re full pension payment to wife even if lump sum paid,!!
Will check this out with scheme

Can confirm scheme well funded and would not expect that to change

Thanks