Defined Pension

hayley65

Whilst you were employed by Dunlop, you contributed to a final salary defined benefit pension scheme. In a scheme of  this type, your pension is calculated upon leaving employment by using your length of service and salary. The annual amount shown in your MyPension account is the pension per annum which has been increased by inflation from leaving service to today’s date.

In a final salary scheme, you do not have a personal pension ‘pot’. The transfer value shown in your account, is the ‘Cash Equivalent Transfer Value’ in which the scheme converts your final salary pension into a ‘pot’ for the purposes of transferring.

Please note, under the rules of the scheme, if you wish to receive a one-off tax lump sum, you must also receive your monthly pension which is payable for life.  This scheme does not offer ‘flexible drawdown’.

Does this mean that I cannot access my pension when I'm 55 and take a lump sum. Its very confusing.

JGB1955

It means that when you take your lump sum you must, at the same time, start drawing your monthly pension.  You can't take the lump sum then wait 5 years before taking the monthly pension.

cloud_dog

Does this mean that I cannot access my pension when I'm 55 and take a lump sum. Its very confusing.

It means you might be able to take it at age 55 with a lump sum.

You need to check the rules of the scheme with the scheme's administrators or the employees pension handbook if you have one.  A lot will depend on the normal retirement age for the scheme/you.  You may be able to draw the pension early but if, for example, your NRA is 65 there will be actuarial reduction of the benefit/amount payable if you take it earlier.

The lump sum is based on a calculation rather than simply being 25% of a pot of money (as there is no pot of money for a DB scheme).

SonOf

Please note, under the rules of the scheme, if you wish to receive a one-off tax lump sum, you must also receive your monthly pension which is payable for life.  This scheme does not offer ‘flexible drawdown’.

Does this mean that I cannot access my pension when I'm 55 and take a lump sum. Its very confusing.

They have probably had people attempting to do drawdown with the DB scheme.   You cannot do drawdown on a DB scheme.  So, they have put that in there to reduce enquiries.

It has nothing to do with age 55. That will be covered off elsewhere in the scheme booklet.

MarkCarnage

Your Normal Retirement Date (NRD) should be defined in the Scheme booklet as noted. It will usually be somewhere between 60 and 65. Taking benefits early will be subject to what's known as an actuarial reduction. Typically around 4% p.a. but can vary. So if your NRD is 63 say, and the expected pension then is £20,000 p.a., if you retired at 55, then this would reduce by just over 30% if the rate was 4%, meaning your pension would be just under £14,000 p.a. 
If you take a tax free  lump sum, then the annual pension figures in both cases would reduce too obviously. 
So the answer to your question, is yes, you may well be able to take pension and lump sum at age 55, subject to the scheme rules on early retirement, but the amount will be cut back quite significantly on the full pension at NRD. 

Albermarle

Maybe you are getting the two different types of pensions mixed up. 
If you have a DC/money purchase pension , where there is a pot of money but no guaranteed pension , then you can access this at 55 .
If you have a ( normally much better ) DB/final salary scheme like you have , then when you can access it is governed by the individual scheme rules . As said above usually the later you take it the better the annual pension is. Normally you will be offered an option of having a lump sum with a reduced pension , or a higher pension with no lump sum.
If you are thinking of wanting to take the pension soon , then contact the schemes administrator to see what is possible.

Dox

hayley65 said:

Whilst you were employed by Dunlop, you contributed to a final salary defined benefit pension scheme. In a scheme of  this type, your pension is calculated upon leaving employment by using your length of service and salary. The annual amount shown in your MyPension account is the pension per annum which has been increased by inflation from leaving service to today’s date.

In a final salary scheme, you do not have a personal pension ‘pot’. The transfer value shown in your account, is the ‘Cash Equivalent Transfer Value’ in which the scheme converts your final salary pension into a ‘pot’ for the purposes of transferring.

Please note, under the rules of the scheme, if you wish to receive a one-off tax lump sum, you must also receive your monthly pension which is payable for life.  This scheme does not offer ‘flexible drawdown’.

Does this mean that I cannot access my pension when I'm 55 and take a lump sum. Its very confusing.

It means you cannot access your pension 'flexibly', which is what I think you are asking? If you get to age 55 you may be able to access your Dunlop retirement benefits, but you wouldn't be able to take tax free cash and put off taking your actual pension - you access both (or neither) at the same time.