Old DB Company Pension Value

IAMIAM

If you have an old DB Company Pension saying it will pay out £5000 per annum at age 65. Does that 5k increase in value between now and age 65 or stay at £5k. I got a value through and all it states is it increases in line with CPI up to 5% but is this once in payment meaning from age 65?

1813

Will increase with inflation up to qhen you take it and after

IAMIAM

So the 5k could be 6k at 65 and then continue to increase in payment too

Brynsam

IAMIAM said:

So the 5k could be 6k at 65 and then continue to increase in payment too

Not necessarily. Dates of pension scheme membership are important - when did you become a member of the scheme and crucially when did you stop building up benefits in the scheme (this often corresponded with the time you left the employer's service).

1813 said:

Will increase with inflation up to qhen you take it and after

Depends on the answer to the above...

IAMIAM

Ive checked. It increases in value by RPI up to 5% annually before payments and this is the same after retirement and drawdown. It also has a part saying it increases my final year of service by CPI up to 5% instead of RPI, that was my last year of service, they closed the pension shortly after. 

Xbigman

The simplest way to clarify this is to look at your annual pension statements. You should see that 5k rise a bit each year. 

Darren

Brynsam

IAMIAM said:

Ive checked. It increases in value by RPI up to 5% annually before payments and this is the same after retirement and drawdown. It also has a part saying it increases my final year of service by CPI up to 5% instead of RPI, that was my last year of service, they closed the pension shortly after. 

If this is a DB scheme you can't have drawdown - that's a concept for defined contribution schemes only.

IAMIAM

Brynsam said:

IAMIAM said:

Ive checked. It increases in value by RPI up to 5% annually before payments and this is the same after retirement and drawdown. It also has a part saying it increases my final year of service by CPI up to 5% instead of RPI, that was my last year of service, they closed the pension shortly after. 

If this is a DB scheme you can't have drawdown - that's a concept for defined contribution schemes only.

I meant drawdown as in start making retirement payments

Thrugelmir

One way to look at the pension is that it will pay you tomorrow what it's worth today. There'll be no investment return. 

xylophone

When you left the scheme, were you given a statement of deferred benefits showing pre 88 GMP/post 88 GMP/excess?

 What exactly does it show?

What does your scheme booklet have to say about how GMP revalues in deferment?

And the excess?

What is Normal Scheme Pension Age?

Albermarle

Xbigman said:

The simplest way to clarify this is to look at your annual pension statements. You should see that 5k rise a bit each year. 

Darren

Many DB schemes do not send out such info. Typically you get a statement when you leave and then annually an update on how well the scheme is funded . But not an annual update of your own pension amount , not with mine anyway.