Transferring BT Pension to MET

melpomene

I'd love some advice please.

I'm 50. I started working for the MET this year with a retirement age of 60 & the benefits to current pension age [i.e after 10 years 281 days' service] are projected to be £4344.34. I read this as annual pension I'd receive.

I worked for BT for 12+ years before & recently applied for a transfer out quotation.

They are saying that my 12+ years buys 6 years 266 days in the Civil Service scheme. But they also project my annual pension from BT as £4781.07.

Am I being really thick here? It looks to me that keeping the two separate is better for me? I am going round in circles trying to understand it.

Any advice would be fantastic.

Mel

melpomene

While I'm on, I might as well ask a question shame has prevented me asking so far . Do I also get a state pension?!?

Lady_E

Civil service pension is seperate to the state pension so YES you will get a state pension.

How about contacting your union rep to get further advice ???

melpomene

thanks Lady E

I'm hoping someone here will know about pension transfers & whether they are a good idea in general & in my case with the figures quoted.

Andy_L

If you leave the BT pension where it is it will only increase with RPI, if you transfer it it will increase in line with pay rises. With a combination of inflation increases & career progression that may be more than rpi (historically wages have increased by ~rpi+2% but past performance is no guarantee etc)

Is the projection from the CS based on transfering the BT scheme in, ie 6 & a bit years? If it is then differencees in T&Cs probably explain the differing valuations

Ian_W

melpomene,
Have a look at THIS THREAD - it's asking the same question but in respect of two different pension schemes from the ones you're concerned with but the things you need to consider are probably similar.

The "frozen" BT pension will increase by RPI [to a max 5%pa] until you can bring it into payment, whereas your Civil Service Pension will be linked to your pay increases until you retire [there are several varieties of CS pensions now, I believe, but as they've quoted a length of service I'm assuming you're in a final salary one]. Pay rises have generally beaten RPI in the past but no-one can say for sure it will for the public sector over the next 10yrs.

If there are prospects of promotion final salary could well be better, if you may have to retire early on health grounds then salary might again be better than BT as they may not allow you to draw it early - it may be at the Trustees discretion.

Personally I don't know enough about either scheme to have a strong opinion but I do think the suggestion of consulting your Union may be the best. If your local rep isn't clued up they should have access to someone who is and can explain the benefits and drawbacks of either option.

EDIT: just to add Andy L posted as I was typing but it's pretty much the same message.

melpomene

Thanks guys, I'd read the other thread but it was too technical for me to grasp.

What i find really odd [intuitively i mean] is that 12+ years only buys 6+ when rates per year (I.e. eventual amounts projected as actual pension payments) seem similar.

Mel

Ian_W

melpomene wrote: »

What i find really odd [intuitively i mean] is that 12+ years only buys 6+ when rates per year (I.e. eventual amounts projected as actual pension payments) seem similar.
Mel

Another way of looking at it though might be that one is more expensive cos it's far better - i.e. you'd expect to pay more for a Rolls than a Mondeo!

As I said I don't know enough about either to say that is the case - but worth checking out before you discount the buying added years option.

melpomene

by 'the buying added years option' do you mean transferring the pension from BT? Or is this a separate issue? [I've heard of AVCs].

melpomene

i know i'm probably looking at this from entirely the wrong angle, & I;m not explaining well either...

using the projected figures for keeping the 2 separate I'd be looking at £9,125.41 total of which £4,344.34 represents 10+years at the MET. Calling that 10 years for simplicity, & bringing in the BT pension [worth 6 years' of 'MET' or approx £2,604], the total drops by over £2,000.

or am I missing things [like growth?]

dunstonh

Different accrual rates, different benefits, retirement age etc will all impact on what you stand to lose or what you stand to gain.