Value of Benefits calculation

[Deleted User]

How is the "Value of Benefits" calculated for a Civil Service Pension ?

Silvertabby

What do you want this for?  For example, if you have been asked to supply a value for divorce purposes, then only Civil Service Pensions will be able to supply the correct calculation.

[Deleted User]

Silvertabby said:

What do you want this for?  For example, if you have been asked to supply a value for divorce purposes, then only Civil Service Pensions will be able to supply the correct calculation.

To see the true value of my CS pension

Silvertabby

Then the nearest you would be able to get to this would be by using the LTA calculation.  ie, 20 X annual pension plus 1 X any automatic lump sum.  But don't be misled by the apparent low value because these factors haven't been updated for many years.

For example, using round figures, a civil service pension of £50K per year (no automatic lump sum) X 20 = 1 million £.  However, if you wanted to buy an annuity of £50K per from the proceeds of a DC plan, then it would cost you nearer 2 million.

In short, the true value of your CS pension is very valuable indeed!

Dazed_and_C0nfused

To see the true value of my CS pension

The only real "true value" is what the CS are paying you.

Otherwise the best calculation might be to see what an annuity paying the same amount would cost.  Ensuring similar conditions are specified in the calculator (as close to the CS as possible).

hugheskevi

You can use the CETV actuarial factors to calculate the value - this is probably the closest you will get to a value, but even that is rather subjective and crucially depends on the discount rate used. These factors are based on a discount rate of CPI+2.4%, which is higher than most private schemes would use and hence results in lower capital values.

[Deleted User]

Silvertabby said:

Then the nearest you would be able to get to this would be by using the LTA calculation.  ie, 20 X annual pension plus 1 X any automatic lump sum.  But don't be misled by the apparent low value because these factors haven't been updated for many ye

For example, using round figures, a civil service pension of £50K per year (no automatic lump sum) X 20 = 1 million £.  However, if you wanted to buy an annuity of £50K per from the proceeds of a DC plan, then it would cost you nearer 2 million.

In short, the true value of your CS pension is very valuable indeed!

I was 47 when I started receiving it, 'Ill Health) 

Silvertabby

Deleted_User said:

Silvertabby said:

Then the nearest you would be able to get to this would be by using the LTA calculation.  ie, 20 X annual pension plus 1 X any automatic lump sum.  But don't be misled by the apparent low value because these factors haven't been updated for many ye

For example, using round figures, a civil service pension of £50K per year (no automatic lump sum) X 20 = 1 million £.  However, if you wanted to buy an annuity of £50K per from the proceeds of a DC plan, then it would cost you nearer 2 million.

In short, the true value of your CS pension is very valuable indeed!

I was 47 when I started receiving it, 'Ill Health) 

Accrued benefits plus enhancement for ill health?

[Deleted User]

Silvertabby said:

Deleted_User said:

Silvertabby said:

Then the nearest you would be able to get to this would be by using the LTA calculation.  ie, 20 X annual pension plus 1 X any automatic lump sum.  But don't be misled by the apparent low value because these factors haven't been updated for many ye

For example, using round figures, a civil service pension of £50K per year (no automatic lump sum) X 20 = 1 million £.  However, if you wanted to buy an annuity of £50K per from the proceeds of a DC plan, then it would cost you nearer 2 million.

In short, the true value of your CS pension is very valuable indeed!

I was 47 when I started receiving it, 'Ill Health) 

Accrued benefits plus enhancement for ill health?

Sorry for the delay - yes (30 years + ill health)

[Deleted User]

Silvertabby said:

Then the nearest you would be able to get to this would be by using the LTA calculation.  ie, 20 X annual pension plus 1 X any automatic lump sum.  But don't be misled by the apparent low value because these factors haven't been updated for many years.

For example, using round figures, a civil service pension of £50K per year (no automatic lump sum) X 20 = 1 million £.  However, if you wanted to buy an annuity of £50K per from the proceeds of a DC plan, then it would cost you nearer 2 million.

In short, the true value of your CS pension is very valuable indeed!

How about £10k pa

[Deleted User]

hugheskevi said:

You can use the CETV actuarial factors to calculate the value - this is probably the closest you will get to a value, but even that is rather subjective and crucially depends on the discount rate used. These factors are based on a discount rate of CPI+2.4%, which is higher than most private schemes would use and hence results in lower capital values.

No mention of Ill Health in any of the actuarial factor links !