How to complain about poor DB lump sum commutation factor / inequality?

itsmeagain

hugheskevi said:

The table below shows memberships of the largest 4 public service pension schemes, as well as memberships of schemes covered by the Purple Book - these are private sector DB schemes.

The 4 largest public sector schemes have a combined membership of 12.7 million. These members all have commutation rates of 12:1.

So you should be very happy with your commutation rate - it is well above average

Thanks but i'm not sure of the relevance of the DB members in different sectors/stages in the table?
For a DB scheme, my argument is that however you take your pension (early, late, with or without a lump sum), the factors should compensate to ensure all methods are fair/equivalent (assuming nominal death age etc). The factors should not be purposely abusive/penalising depending on how you take your DB pension. I thought that there may be a governing body to ensure a level of integrity, hence my original question.
Furthermore, the fact that some schemes are even more abusive to their members when taking a lump sum, doesn't make me happy at all!

JoeCrystal

itsmeagain said:

Thanks but i'm not sure of the relevance of the numbers of DB members at different sectors/stages in the table?
For a DB scheme, my argument is that however you take your pension (early, late, with or without a lump sum), the factors should compensate to ensure all methods are fair/equivalent (assuming nominal death age etc). The factors should not be purposely abusive/penalising depending on how you take your DB pension. I thought that there may be a governing body to ensure a level of integrity, hence my original question. 

Seriously? You need to bear in mind that every single DB pension scheme is unique with their own quirks and calculations. However, they share a similar outcome in their goal, aka, to pay their pensioners' income. Bank of England pension scheme is still non-contributory and accruing at 1/100th of your salary even now. Frankly, from someone who has been in several DC pension schemes, you should be thankful that you are getting a generous pension and a good lump sum after especially paying most likely peanuts for them. The only level of integrity they have to follow is legally mandated by the laws or set out by the regulators themselves. So really, no point worrying anything about this aspect, make the best decision after considering your circumstances.

itsmeagain

JoeCrystal said:

itsmeagain said:

Thanks but i'm not sure of the relevance of the numbers of DB members at different sectors/stages in the table?
For a DB scheme, my argument is that however you take your pension (early, late, with or without a lump sum), the factors should compensate to ensure all methods are fair/equivalent (assuming nominal death age etc). The factors should not be purposely abusive/penalising depending on how you take your DB pension. I thought that there may be a governing body to ensure a level of integrity, hence my original question. 

Seriously? You need to bear in mind that every single DB pension scheme is unique with their own quirks and calculations. However, they share a similar outcome in their goal, aka, to pay their pensioners' income. Bank of England pension scheme is still non-contributory and accruing at 1/100th of your salary even now. Frankly, from someone who has been in several DC pension schemes, you should be thankful that you are getting a generous pension and a good lump sum after especially paying most likely peanuts for them. The only level of integrity they have to follow is legally mandated by the laws or set out by the regulators themselves. So really, no point worrying anything about this aspect, make the best decision after considering your circumstances.

Yes I am serious. Don't get me wrong, I know that I have 'fallen on my feet' with my DB scheme and feel extremely lucky. However, the fact that 'old DB members' are lucky, grateful, feel sorry for young DC members etc, doesn't automatically justify the application of unfair compensation factors depending how they take their pension.

Dazed_and_C0nfused

itsmeagain said:

JoeCrystal said:

itsmeagain said:

Thanks but i'm not sure of the relevance of the numbers of DB members at different sectors/stages in the table?
For a DB scheme, my argument is that however you take your pension (early, late, with or without a lump sum), the factors should compensate to ensure all methods are fair/equivalent (assuming nominal death age etc). The factors should not be purposely abusive/penalising depending on how you take your DB pension. I thought that there may be a governing body to ensure a level of integrity, hence my original question. 

Seriously? You need to bear in mind that every single DB pension scheme is unique with their own quirks and calculations. However, they share a similar outcome in their goal, aka, to pay their pensioners' income. Bank of England pension scheme is still non-contributory and accruing at 1/100th of your salary even now. Frankly, from someone who has been in several DC pension schemes, you should be thankful that you are getting a generous pension and a good lump sum after especially paying most likely peanuts for them. The only level of integrity they have to follow is legally mandated by the laws or set out by the regulators themselves. So really, no point worrying anything about this aspect, make the best decision after considering your circumstances.

Yes I am serious. Don't get me wrong, I know that I have 'fallen on my feet' with my DB scheme and feel extremely lucky. However, the fact that 'old DB members' are lucky, grateful, feel sorry for young DC members etc, doesn't automatically justify the application of unfair compensation factors depending how they take their pension.

Do you think all shops should have to sell say 500ml bottles of Coca-cola for £1.25 rather the price they choose?

Maybe living in Russia would suit you better?

itsmeagain

Dazed_and_C0nfused said:

itsmeagain said:

JoeCrystal said:

itsmeagain said:

Thanks but i'm not sure of the relevance of the numbers of DB members at different sectors/stages in the table?
For a DB scheme, my argument is that however you take your pension (early, late, with or without a lump sum), the factors should compensate to ensure all methods are fair/equivalent (assuming nominal death age etc). The factors should not be purposely abusive/penalising depending on how you take your DB pension. I thought that there may be a governing body to ensure a level of integrity, hence my original question. 

Seriously? You need to bear in mind that every single DB pension scheme is unique with their own quirks and calculations. However, they share a similar outcome in their goal, aka, to pay their pensioners' income. Bank of England pension scheme is still non-contributory and accruing at 1/100th of your salary even now. Frankly, from someone who has been in several DC pension schemes, you should be thankful that you are getting a generous pension and a good lump sum after especially paying most likely peanuts for them. The only level of integrity they have to follow is legally mandated by the laws or set out by the regulators themselves. So really, no point worrying anything about this aspect, make the best decision after considering your circumstances.

Yes I am serious. Don't get me wrong, I know that I have 'fallen on my feet' with my DB scheme and feel extremely lucky. However, the fact that 'old DB members' are lucky, grateful, feel sorry for young DC members etc, doesn't automatically justify the application of unfair compensation factors depending how they take their pension.

Do you think all shops should have to sell say 500ml bottles of Coca-cola for £1.25 rather the price they choose?

Maybe living in Russia would suit you better?

Of course not. But I would think it was unfair to charge a different price depending on how and when it was consumed!

Dazed_and_C0nfused

Dazed_and_C0nfused said:

itsmeagain said:

JoeCrystal said:

itsmeagain said:

Thanks but i'm not sure of the relevance of the numbers of DB members at different sectors/stages in the table?
For a DB scheme, my argument is that however you take your pension (early, late, with or without a lump sum), the factors should compensate to ensure all methods are fair/equivalent (assuming nominal death age etc). The factors should not be purposely abusive/penalising depending on how you take your DB pension. I thought that there may be a governing body to ensure a level of integrity, hence my original question. 

Seriously? You need to bear in mind that every single DB pension scheme is unique with their own quirks and calculations. However, they share a similar outcome in their goal, aka, to pay their pensioners' income. Bank of England pension scheme is still non-contributory and accruing at 1/100th of your salary even now. Frankly, from someone who has been in several DC pension schemes, you should be thankful that you are getting a generous pension and a good lump sum after especially paying most likely peanuts for them. The only level of integrity they have to follow is legally mandated by the laws or set out by the regulators themselves. So really, no point worrying anything about this aspect, make the best decision after considering your circumstances.

Yes I am serious. Don't get me wrong, I know that I have 'fallen on my feet' with my DB scheme and feel extremely lucky. However, the fact that 'old DB members' are lucky, grateful, feel sorry for young DC members etc, doesn't automatically justify the application of unfair compensation factors depending how they take their pension.

Do you think all shops should have to sell say 500ml bottles of Coca-cola for £1.25 rather the price they choose?

Maybe living in Russia would suit you better?

Of course not. But I would think it was unfair to charge a different price depending on how and when it was consumed!

Isn't that efrectively how motorway services and the shops in them make their money though?

If a prawn sandwich from M&S is £2 you can bet it will be £2.10 or £2.20 in a motorway services M&S.

itsmeagain

Dazed_and_C0nfused said:

Isn't that hiwitsmeagain said:

Dazed_and_C0nfused said:

itsmeagain said:

JoeCrystal said:

itsmeagain said:

Thanks but i'm not sure of the relevance of the numbers of DB members at different sectors/stages in the table?
For a DB scheme, my argument is that however you take your pension (early, late, with or without a lump sum), the factors should compensate to ensure all methods are fair/equivalent (assuming nominal death age etc). The factors should not be purposely abusive/penalising depending on how you take your DB pension. I thought that there may be a governing body to ensure a level of integrity, hence my original question. 

Seriously? You need to bear in mind that every single DB pension scheme is unique with their own quirks and calculations. However, they share a similar outcome in their goal, aka, to pay their pensioners' income. Bank of England pension scheme is still non-contributory and accruing at 1/100th of your salary even now. Frankly, from someone who has been in several DC pension schemes, you should be thankful that you are getting a generous pension and a good lump sum after especially paying most likely peanuts for them. The only level of integrity they have to follow is legally mandated by the laws or set out by the regulators themselves. So really, no point worrying anything about this aspect, make the best decision after considering your circumstances.

Yes I am serious. Don't get me wrong, I know that I have 'fallen on my feet' with my DB scheme and feel extremely lucky. However, the fact that 'old DB members' are lucky, grateful, feel sorry for young DC members etc, doesn't automatically justify the application of unfair compensation factors depending how they take their pension.

Do you think all shops should have to sell say 500ml bottles of Coca-cola for £1.25 rather the price they choose?

Maybe living in Russia would suit you better?

Of course not. But I would think it was unfair to charge a different price depending on how and when it was consumed!

Isn't that how motorway services make their money though?

No, a given shop charges the same price to everyone, gives them the same benefit and lets the customer decided how/when they consume it.

Dazed_and_C0nfused

itsmeagain said:

Dazed_and_C0nfused said:

Isn't that hiwitsmeagain said:

Dazed_and_C0nfused said:

itsmeagain said:

JoeCrystal said:

itsmeagain said:

Thanks but i'm not sure of the relevance of the numbers of DB members at different sectors/stages in the table?
For a DB scheme, my argument is that however you take your pension (early, late, with or without a lump sum), the factors should compensate to ensure all methods are fair/equivalent (assuming nominal death age etc). The factors should not be purposely abusive/penalising depending on how you take your DB pension. I thought that there may be a governing body to ensure a level of integrity, hence my original question. 

Seriously? You need to bear in mind that every single DB pension scheme is unique with their own quirks and calculations. However, they share a similar outcome in their goal, aka, to pay their pensioners' income. Bank of England pension scheme is still non-contributory and accruing at 1/100th of your salary even now. Frankly, from someone who has been in several DC pension schemes, you should be thankful that you are getting a generous pension and a good lump sum after especially paying most likely peanuts for them. The only level of integrity they have to follow is legally mandated by the laws or set out by the regulators themselves. So really, no point worrying anything about this aspect, make the best decision after considering your circumstances.

Yes I am serious. Don't get me wrong, I know that I have 'fallen on my feet' with my DB scheme and feel extremely lucky. However, the fact that 'old DB members' are lucky, grateful, feel sorry for young DC members etc, doesn't automatically justify the application of unfair compensation factors depending how they take their pension.

Do you think all shops should have to sell say 500ml bottles of Coca-cola for £1.25 rather the price they choose?

Maybe living in Russia would suit you better?

Of course not. But I would think it was unfair to charge a different price depending on how and when it was consumed!

Isn't that how motorway services make their money though?

No, a given shop charges the same price to everyone, gives them the same benefit and lets the customer decided how/when they consume it.

Tesco wouldn't sell me Pringles for £1 as I don't have a Clubcard but the bloke in front of me who did have one got them for £1.

Anyway on that note I will leave you to it and do some work so I can afford some Pringles at Christmas ☹️

itsmeagain

Dazed_and_C0nfused said:

itsmeagain said:

Dazed_and_C0nfused said:

Isn't that hiwitsmeagain said:

Dazed_and_C0nfused said:

itsmeagain said:

JoeCrystal said:

itsmeagain said:

Thanks but i'm not sure of the relevance of the numbers of DB members at different sectors/stages in the table?
For a DB scheme, my argument is that however you take your pension (early, late, with or without a lump sum), the factors should compensate to ensure all methods are fair/equivalent (assuming nominal death age etc). The factors should not be purposely abusive/penalising depending on how you take your DB pension. I thought that there may be a governing body to ensure a level of integrity, hence my original question. 

Seriously? You need to bear in mind that every single DB pension scheme is unique with their own quirks and calculations. However, they share a similar outcome in their goal, aka, to pay their pensioners' income. Bank of England pension scheme is still non-contributory and accruing at 1/100th of your salary even now. Frankly, from someone who has been in several DC pension schemes, you should be thankful that you are getting a generous pension and a good lump sum after especially paying most likely peanuts for them. The only level of integrity they have to follow is legally mandated by the laws or set out by the regulators themselves. So really, no point worrying anything about this aspect, make the best decision after considering your circumstances.

Yes I am serious. Don't get me wrong, I know that I have 'fallen on my feet' with my DB scheme and feel extremely lucky. However, the fact that 'old DB members' are lucky, grateful, feel sorry for young DC members etc, doesn't automatically justify the application of unfair compensation factors depending how they take their pension.

Do you think all shops should have to sell say 500ml bottles of Coca-cola for £1.25 rather the price they choose?

Maybe living in Russia would suit you better?

Of course not. But I would think it was unfair to charge a different price depending on how and when it was consumed!

Isn't that how motorway services make their money though?

No, a given shop charges the same price to everyone, gives them the same benefit and lets the customer decided how/when they consume it.

Tesco wouldn't sell me Pringles for £1 as I don't have a Clubcard but the bloke in front of me who did have one got them for £1.

Anyway on that note I will leave you to it and do some work so I can afford some Pringles at Christmas ☹️

Haha - you know that the people in my pension scheme are all members of the same club, so expect to be treated fairly when they bought the pringles.

Silvertabby

It's apples and oranges again.  In the case of DC schemes, both employer and employee pay in to an investment, which is then - by and large - at the mercy of the stock market.  A crash wipes out 20% of the fund overnight?  Not the employer's problem.  It's the employee who takes the hit.

With a DB scheme, however, regardless of what happens to the funds investments, the employee is guaranteed to receive a pension based on salary and service.  

It's the scheme actuaries who set the accrual rates (which differ even within the public sector), commutation rates, contributions, etc etc at a level which makes the scheme affordable.

This level of unhappiness against a commutation rate is unusual on these boards.  The biggest gripe seems to be the way DB pensions die with a fund member who doesn't leave an eligible partner and/or children, with one poster arguing that he should be able to leave a 'pension for life' to anyone he chose rather than 'waste it'.

The answer to that was that the scheme affordability was based on the fact that those who sadly die early help pay the benefits of those who live to 90 plus.  This has always been the way of DB schemes, otherwise they would be unaffordable and would either go the way of so many schemes before them - DC - or would have to decrease the accrual level and/or increase the contributions.

Similar reasons apply to commutation levels.  The actuaries have factored in that X number of pensioners will reduce their overall benefits by commuting..

However, there is a big difference between 'losing' benefits due to early death or by commuting at a poor rate.  It's your choice to commute or not.