Meaning of deferred pension value

OnePound

Hi all,  My DB scheme recently closed and the scheme sent a value of the defined benefit on closure (I am still with the company moving to DC scheme).  It is 20 years to my normal retirement date (although I hope to stop work earlier). I just wanted to ask what the value means (Total pension £7k), is it the actual amount I will get at retirement?  What about inflation?  I read in the supporting documents about increases once the pension is in payment, but what normally happens before?
Thanks for your help, trying to plan early.

Linton

Deferred DB pensions are increased with inflation until the retirement date.
See here under "When you leave the scheme".

Brynsam

OnePound said:

Hi all,  My DB scheme recently closed and the scheme sent a value of the defined benefit on closure (I am still with the company moving to DC scheme).  It is 20 years to my normal retirement date (although I hope to stop work earlier). I just wanted to ask what the value means (Total pension £7k), is it the actual amount I will get at retirement?  What about inflation?  I read in the supporting documents about increases once the pension is in payment, but what normally happens before?
Thanks for your help, trying to plan early.

Your pension increases between the time you leave the scheme and the time you draw your benefits. The literature you received should have explained this - or your scheme handbook will contain the information. If not, go back to the people administering the scheme on a day to day basis and ask them to provide you with the relevant details. Generic information is helpful, but you need to be aware of what your scheme actually does.

Albermarle

The scheme may update you each year on the value , although many do not and you have to estimate unless you ask for a specific quote.
In any case what you can say is that after 20 years you will stay have £7K spending power at todays prices , approximately anyway.

NedS

Albermarle said:

The scheme may update you each year on the value , although many do not and you have to estimate unless you ask for a specific quote.

In addition, many schemes also now have a web portal for which you can register allowing you to log in and view the current deferred value, manage your account for things like updating personal/contact information and nominating beneficiaries etc

enthusiasticsaver

Your scheme literature should say what inflation link is in place and yes it should go up by the time you get to claim it. We used the online web portal to update the value each year and 20 years prior to retirement sounds like a good time to get things in order so the closer you get the more informed you are about what you will receive. 

When my husbands DB scheme closed in 2008 and transferred to a new DC scheme there was a massive incentive to overpay in that if he paid in 10% of his salary the company would pay in 20% in year 1 and the following year 19% and 18% and so on until they reached 10% to match his contribution.  That meant over the last 10 years of his working life there was up to 30% of his salary going into the new DC scheme.  Is your company offering anything similar?