What's your (CETV) Number (Multiple)

ffacoffipawb

Cus said:

I had a 39 multiplier 20 years before NRA.

39 times what? The deferred pension at date of leaving, date of TV calc, or something else?

Cus

It was the cetv divided by the projected annual dB pension at the retirement age (62)

DairyQueen

Mine was x 32 (of projected annual pension at NRA of 65) when I transferred 3 years ago (then age 58).

It wasn't about the numbers. Our circumstances were such that the IFA (paid by ex-employer) gave a super-positive recommendation to transfer. I have reduced life expectancy, no dependents, OH has a chunky DB and other pensions/assets.

It's rarely the best advice to transfer but there are always exceptions.

ffacoffipawb

Cus said:

It was the cetv divided by the projected annual dB pension at the retirement age (62)

Makes more sense to me to compare both at the same point in time.

A £390,000 CETV or £10,000 pension in 10 years time is probably excellent but if the pension now was £7,000 it would make the comparison clearer, to me anyway.

Or you could project the CETV to 62 and assume it is £475,000.

Cus

When I had the recommendation to transfer out, the ratio was never mentioned. There was a lot of focus on the amount you would need to buy an annuity at retirement age that had the same benefits as the DB you would get. Then work out what you would need today to get to that number based on a load of scenarios. Then compare against the cetv. I think multiples are irrelevant.

mark55man

True but if you are comparing DB to equivalent annuities - then surely that isn't the reason that most people take transfers? It seems like most are doing it to go forward wwith the 4% safe (!) withdrawal rate from the CETV pot (especially if their multiple is big enough) or to try and free up a little more cash for legacy purposes - An annuity is more or less like for like, unless you are taking the CETV now and then delaying the annuity purchase (eg by carrying on working).

I am slightly interested in that route, as I am slightly health impaired and I have seen estimates (adverts!!) that I might be up to 30% better off on an impaired health annuity than a normal one. So I could match the DB benefits and still end up with some cash if I can buy an impaired annuity value to match the T&C of my DB (50% Spouse and no qualifying kids - too ld) for less than the CETV. 

mark55man

MallyGirl said:

<.snip.>
I am pretty sure it is  "I think I saw you in an ice cream parlour ..."

RIP David.

@MallyGirl - fixed my signature for you - in an "all on one line" sort of way

Albermarle

mark55man said:

True but if you are comparing DB to equivalent annuities - then surely that isn't the reason that most people take transfers? It seems like most are doing it to go forward wwith the 4% safe (!) withdrawal rate from the CETV pot (especially if their multiple is big enough) or to try and free up a little more cash for legacy purposes - An annuity is more or less like for like, unless you are taking the CETV now and then delaying the annuity purchase (eg by carrying on working).

I am slightly interested in that route, as I am slightly health impaired and I have seen estimates (adverts!!) that I might be up to 30% better off on an impaired health annuity than a normal one. So I could match the DB benefits and still end up with some cash if I can buy an impaired annuity value to match the T&C of my DB (50% Spouse and no qualifying kids - too ld) for less than the CETV. 

I guess you can take the CETV and then you can take a bigger tax free lump sum than you would get if you stayed with the DB.
Presumably then the impaired annuity you could buy with the remaining 75% would probably give a similar pension to the DB one ?

mark55man

Thank you - I think I need to do some research, but I fear to open that particular door to hordes of annuity salesman.  I will ask a general question on a different thread though.   But my feeling for now is just to stay informed, do some thinking, keep an eye on the next couple of CETV reports, and mainly just sit on my hands.  I mean hopefully we won't still be locked down in 2-3 years??? 

hyperhypo

Mine is c. x 37,  comparing an estimated RPI calculated increase from date of leaving db scheme (8 years ago) at £14,500 in today's money. NRA is 18 months off,  so roughly £15k per annum at NRA.

Last very recent CETV was £550,000 based on an estimate from new software being used by the scheme admins, so not an actuarial calc.

Scheme is RPI based (isn't this slated for retirement in itself ??) , capped at 10% , and above at discretion of trustees.

OPs last comment prompted me to recall that in addition to the fairly usual 50% plus younger dependants, my scheme provides for an additional payment of roughly equivalent of the PCLS amount (c. 75K..even if the full PCLS is taken) if i were to die within 5 years post NRA, in addition to 50% of the full annual amount. Commutation rate is x21 at NRA for the PCLS cash.

This last  bit, the death benefit, had been overlooked by myself , as i no longer have the original scheme documentation, and only unearthed when i requested some updated docs from the admins.

I'm still in the scheme though, preferring to retain a mix of DB/DC provision, and using the DC and some PCLS cash to front up until SP age. I had looked at transferring in past but decided against.