Old defined benefits scheme

SteveC3

Hi. My wife has a DB pension scheme from a company  she left 20 years ago. The monthly payment has increased from £6235 in 2000 to £10669 as of last Oct 2019, in line with RPI. The holding company JLT Benefit solutions doesn't seem to have a great reputation. She plans to retire at the schemes retirement age of 60 in 5 years time. Probably a bit late in the day now, but we are wondering what the options are with this pension and whether they are worth pursuing, or just leaving it? Any thoughts? Thanks

Albermarle

The scheme will have a rule book and you can not change the rules.
The only real option is to transfer out of the scheme into a defined contribution pension. The current scheme will offer a CETV ( a cash equivalent transfer value) - normally it is more than most people expect . Could well be over £300K in her case.
If she took it then she is giving up a guaranteed pension for life in return for relying on stock market returns to provide an income.
Also its a major hassle transferring out as you are forced to take expensive financial advice .
There are hundreds of threads on this subject on this forum but this is a good summary of the pros and cons 
Five good reasons to transfer out of your company pension....and five good reasons not to - Royal London

[Deleted User]

Steve, are the figures correct, a monthly payment of over £10000 seems exceptional?

mjm3346

thetimewill said:

Steve, are the figures correct, a monthly payment of over £10000 seems exceptional

Left the job at 35 so unlikely to be more than 17 years contributions and much more likely the pension figures are annual and not monthly

[Deleted User]

mjm3346, I agree the figure is possibly yearly,however it does say monthly, hence my query.

dunstonh

Often the figures are given annually but paid monthly.

hyubh

SteveC3 said:

Hi. My wife has a DB pension scheme from a company  she left 20 years ago. The monthly payment has increased from £6235 in 2000 to £10669 as of last Oct 2019, in line with RPI. The holding company JLT Benefit solutions doesn't seem to have a great reputation. 

JLT are a third party administrator, which means nothing with respect to the solvency of the pension fund (Capita administer collection of the licence fee, doesn't mean Eastenders goes off air if they get into financial trouble). Although if JLT really were the sponsoring employer, then great, independent let alone part of Mercer (JLT got taken over last year), no chance of the PPF any time soon...

SteveC3

Sorry, the figures are annually not monthly! She also has 10 years teachers DB and will have 10 years Universities DB and so total should be at least 18k per annum at 60. I've just retired at 61 and all my pension is in DC. I'm going to be taking 3.5% which keeps me under tax threshold (~17k pa) and the occasional lump sum when needed. Full SP kicks in in 4.5 years. So should be ok as long as there is not a prolonged recession in the next few years! (Oops). I'm keeping 18months in cash which I may increase a little. I think our inclination is to leave all my wife's as DB which offsets my riskier 70/30 mix. (Vanguard LS 60/40 plus 20% world index).

shinytop

That's a good mix of DB and DC you have between you. It would still be worth asking for a CETV just in case it's very generous.  

xylophone

Has she (and have you) obtained state pension forecasts?
https://www.gov.uk/check-state-pension

SteveC3

I get just over full state pension. She will be short by a few years. I'll check that, thanks