CETV Advice Please

Linton

Iwantmycetv said:

2nd_time_buyer said:

Iwantmycetv said:

hyubh said:

Iwantmycetv said:

FYI, pension pot if remains in scheme is £60K, CETV is £161K .... I wanted to access the £40K lump sum and put the rest in drawdown.

I'm very confused at what the 60K is that you're using to evaluate the 161K. Can you elaborate...?

So the trustees have quoted a transfer value from the scheme as £161K .... if I don't transfer out it's £60K.

The transfer value is £100K higher.

That still seems a bit strange. What is the annual payment you would receive in retirement if you stayed in the scheme?

For in-scheme valuations for the purpose of lifetime allowance it is calculated at 20x the annual pension (plus any lump sum). This could imply a pension on the region of £3000 per year - if the valuation is £60k

... but then the £161k would seem very generous

The £161K is very generous, hence I want to access it.

Annual pension is around £2200 pa 

At first sight that is a factor of 73.  The largest factor I remember seeing before is about 50 from a bank pension and that was considered very generous.    Something odd going on or a misunderstanding somewhere.  Perhaps as Thrugelmir says it's to do with inflation revaluation.  Was it £2200 when you left employment or is that a figure you have received later?

hyubh

Iwantmycetv said:

hyubh said:

Iwantmycetv said:

FYI, pension pot if remains in scheme is £60K, CETV is £161K .... I wanted to access the £40K lump sum and put the rest in drawdown.

I'm very confused at what the 60K is that you're using to evaluate the 161K. Can you elaborate...?

So the trustees have quoted a transfer value from the scheme as £161K .... if I don't transfer out it's £60K.

The transfer value is £100K higher.

What do you mean, if you don't transfer out, the transfer value from the scheme is 60K...? That doesn't make much sense. Do you mean, as 2nd_time_buyer has suggested, that the 60K is the LTA value? If so, that has nothing to do with the 'real' value of the pension (there is no connection between a pension's value for LTA purposes and what a sponsoring employer has to do to fund it).

Annual pension is around £2200 pa 
The £161K is very generous, hence I want to access it.

That's completely implausible (161000/2220 = 72.5). What is the revalued pension? And what are the increases once in payment...?

QrizB

Apologies if you've already answered these questions, I dodn't spot them when I read through but I might have missed something.

You wrote earlier "I have been granted pension early through ill health". How old are you now, and what is the normal pension age for the DB scheme?

Is £2200pa the pension you've been offered now, or is that the value at normal pension age?

Is there any associated lump sum payment when you start taking your pension?

Iwantmycetv

hyubh said:

Iwantmycetv said:

hyubh said:

Iwantmycetv said:

FYI, pension pot if remains in scheme is £60K, CETV is £161K .... I wanted to access the £40K lump sum and put the rest in drawdown.

I'm very confused at what the 60K is that you're using to evaluate the 161K. Can you elaborate...?

So the trustees have quoted a transfer value from the scheme as £161K .... if I don't transfer out it's £60K.

The transfer value is £100K higher.

What do you mean, if you don't transfer out, the transfer value from the scheme is 60K...? That doesn't make much sense. Do you mean, as 2nd_time_buyer has suggested, that the 60K is the LTA value? If so, that has nothing to do with the 'real' value of the pension (there is no connection between a pension's value for LTA purposes and what a sponsoring employer has to do to fund it).

Annual pension is around £2200 pa 
The £161K is very generous, hence I want to access it.

That's completely implausible (161000/2220 = 72.5). What is the revalued pension? And what are the increases once in payment...?

Increases are based on RPI.

Maybe I should explain it differently, if I leave the pension in situ the cash lump sum is £15K but if I transfer it's £40K.

The pension if I take now after the £15K lum sum is actually £2300 (just double checked it).

QrizB

Iwantmycetv said:

The pension if I take now after the £15K lum sum is actually £2300 (just double checked it).

OK, a pension of £2300pa plus a £15k lump sum would give a LTA value of around £60k (£2300x20 + £15000).

Iwantmycetv

QrizB said:

Apologies if you've already answered these questions, I dodn't spot them when I read through but I might have missed something.

You wrote earlier "I have been granted pension early through ill health". How old are you now, and what is the normal pension age for the DB scheme?

Is £2200pa the pension you've been offered now, or is that the value at normal pension age?

Is there any associated lump sum payment when you start taking your pension?

Thanks for your input and I don't think i've answered about my age, etc.

So i'm 56 years old with normal retirement age being 60.

Just checked and it's actually £2300 and not £2200, and that's what would be paid now and would be increased by RPI annually.
Lump sum would be £15K.

Iwantmycetv

QrizB said:

Iwantmycetv said:

The pension if I take now after the £15K lum sum is actually £2300 (just double checked it).

OK, a pension of £2300pa plus a £15k lump sum would give a LTA value of around £60k (£2300x20 + £15000).

Thanks for explaining that to me

2nd_time_buyer

Iwantmycetv said:

hyubh said:

Iwantmycetv said:

hyubh said:

Iwantmycetv said:

FYI, pension pot if remains in scheme is £60K, CETV is £161K .... I wanted to access the £40K lump sum and put the rest in drawdown.

I'm very confused at what the 60K is that you're using to evaluate the 161K. Can you elaborate...?

So the trustees have quoted a transfer value from the scheme as £161K .... if I don't transfer out it's £60K.

The transfer value is £100K higher.

What do you mean, if you don't transfer out, the transfer value from the scheme is 60K...? That doesn't make much sense. Do you mean, as 2nd_time_buyer has suggested, that the 60K is the LTA value? If so, that has nothing to do with the 'real' value of the pension (there is no connection between a pension's value for LTA purposes and what a sponsoring employer has to do to fund it).

Annual pension is around £2200 pa 
The £161K is very generous, hence I want to access it.

That's completely implausible (161000/2220 = 72.5). What is the revalued pension? And what are the increases once in payment...?

Increases are based on RPI.

Maybe I should explain it differently, if I leave the pension in situ the cash lump sum is £15K but if I transfer it's £40K.

The pension if I take now after the £15K lum sum is actually £2300 (just double checked it).

In which case, the only way I think the £161k CETV could be justified is if the pension will be payable a long time before normal retirement age (e.g. in your early 40s). With the RPI increases it could be worth a lot more than £2300 in the future.

Iwantmycetv

2nd_time_buyer said:

Iwantmycetv said:

hyubh said:

Iwantmycetv said:

hyubh said:

Iwantmycetv said:

FYI, pension pot if remains in scheme is £60K, CETV is £161K .... I wanted to access the £40K lump sum and put the rest in drawdown.

I'm very confused at what the 60K is that you're using to evaluate the 161K. Can you elaborate...?

So the trustees have quoted a transfer value from the scheme as £161K .... if I don't transfer out it's £60K.

The transfer value is £100K higher.

What do you mean, if you don't transfer out, the transfer value from the scheme is 60K...? That doesn't make much sense. Do you mean, as 2nd_time_buyer has suggested, that the 60K is the LTA value? If so, that has nothing to do with the 'real' value of the pension (there is no connection between a pension's value for LTA purposes and what a sponsoring employer has to do to fund it).

Annual pension is around £2200 pa 
The £161K is very generous, hence I want to access it.

That's completely implausible (161000/2220 = 72.5). What is the revalued pension? And what are the increases once in payment...?

Increases are based on RPI.

Maybe I should explain it differently, if I leave the pension in situ the cash lump sum is £15K but if I transfer it's £40K.

The pension if I take now after the £15K lum sum is actually £2300 (just double checked it).

In which case, the only way I think the £161k CETV could be justified is if the pension will be payable a long time before normal retirement age (e.g. in your early 40s). With the RPI increases it could be worth a lot more than £2300 in the future.

I'm 56 years old with the scheme normal retirement age being 60.

The £161K is valid but my IFA won't recommend it ... doesn't make sense with it being such a high value.

Iwantmycetv

Iwantmycetv said:

2nd_time_buyer said:

Iwantmycetv said:

hyubh said:

Iwantmycetv said:

hyubh said:

Iwantmycetv said:

FYI, pension pot if remains in scheme is £60K, CETV is £161K .... I wanted to access the £40K lump sum and put the rest in drawdown.

I'm very confused at what the 60K is that you're using to evaluate the 161K. Can you elaborate...?

So the trustees have quoted a transfer value from the scheme as £161K .... if I don't transfer out it's £60K.

The transfer value is £100K higher.

What do you mean, if you don't transfer out, the transfer value from the scheme is 60K...? That doesn't make much sense. Do you mean, as 2nd_time_buyer has suggested, that the 60K is the LTA value? If so, that has nothing to do with the 'real' value of the pension (there is no connection between a pension's value for LTA purposes and what a sponsoring employer has to do to fund it).

Annual pension is around £2200 pa 
The £161K is very generous, hence I want to access it.

That's completely implausible (161000/2220 = 72.5). What is the revalued pension? And what are the increases once in payment...?

Increases are based on RPI.

Maybe I should explain it differently, if I leave the pension in situ the cash lump sum is £15K but if I transfer it's £40K.

The pension if I take now after the £15K lum sum is actually £2300 (just double checked it).

In which case, the only way I think the £161k CETV could be justified is if the pension will be payable a long time before normal retirement age (e.g. in your early 40s). With the RPI increases it could be worth a lot more than £2300 in the future.

I'm 56 years old with the scheme normal retirement age being 60.

The £161K is valid but my IFA won't recommend it ... doesn't make sense with it being such a high value.

sorry should be IFA won't recommend transfer out