Impact of Severance on a DB pension and pensions freedoms

otb666

Please can you offer advise-
I will be offered Severance/ Voluntary Redundancy-shortly After long service and as I understand it because of my age they will start paying my pension immediately without reduction. About £5k .Does that mean I will lose the option to ask for a CETV and have my own pension pot, as i was hoping to do this to plug the gap until State Pension with about £1K per month, instead of £500 per  month.  Dont really want to get into others opinions on this just would like to know if I will lose the option to do this and if there is any way i can retain this option by Deferring or doing Transfer before i get my Severence notice or am i worrying about nothing. Done a state pension forecast.  I am a secret lurker and a big fan of you all

otb666

I am 55 in June 21  and will be offered Severence anytime from now do not know
when though

xylophone

Have you checked your options with the Administrator of the scheme?

otb666

Its only just been announced so i have emailed HR pension advisor but i do find it hard to ask what i want and make myself clear Also because of this i dont always get a clear accurate answer.  I trust you lot more and i know you are all very knowlegeable as been reading your posts and advise for so long

otb666

i am honoured you read my post and quite star struck now

otb666

Do you think i am worrying bout nothing its ESPS scheme

otb666

I know its your opinion only but I would value it

xylophone

ESPS scheme

https://www.unitedutilities.com/globalassets/z_corporate-site/careers-pdfs/esps-members-guide.acc19.pdf

Above is the link to the scheme guide.

In particular, see page 9 and page 12.

If you ring TPAS https://www.pensionsadvisoryservice.org.uk/ you might discuss the matter.

Or are you a member of a union?  You might find help there.

Brynsam

otb666 said:

Please can you offer advise-
I will be offered Severance/ Voluntary Redundancy-shortly After long service and as I understand it because of my age they will start paying my pension immediately without reduction. About £5k .Does that mean I will lose the option to ask for a CETV and have my own pension pot,

Yes. You can't transfer once a DB pension is in payment.

After severance, you could remain a deferred pensioner rather than taking your pension. As a  deferred member, you would be eligible for a CETV. Think hard, though. It's a big financial advantage not to have a reduction for early payment (which, incidentally, would NOT normally be reflected in a CETV).

If you take maximum tax free cash at the point you start your pension, would that help bridge the gap?

otb666

 , i think i am going to leave it as it stands and take pension as normal before 63 without reduction good option in severence pakage- transfer value quote was 168k or 5kpa 15k lump sum now.  i dont know what inpact the new index linking will have but better to have some index linking
Can i ask -as 1105 pa is pre 97 and post 97 3625 if it went to ppf i would only get 3625 cpi index linking pre and post 63yrs old is that right?

otb666

by the way i was advised by HR once date provide for severence i would not be able to defer i would have to arrange transfer in 3 months