Deferred Defined Benefit Pension

Snowwhale78

This might be a stupid question and I feel silly ask but maybe someone can help my understanding of this. (The answer may be in the name!)
I have a DB pension from a company I left that is now deferred.
Per the documentation I have the pension is supposed to increase each year by various amounts based on when I made contributions.
It says "Your pension will increase each year while it remains in the Plan" and for example "A maximum of 5% per annum for your pension in respect of Pensionable Service before 6 April 2009".
Given that I would expect my forecasted Benefit on retirement to change over time but my annual statements show the same yearly pension.

I guess in misunderstand this language?
Does this just mean the Pot increase but benefit is the same?
If so how does this benefit me?

Hoping someone can shed some light .

Thanks

Dazed_and_C0nfused

You don't have a "pot" with a DB pension.

It may be that the scheme provider only provides an updated amount on (specific) request or when you approach normal pension age for the scheme?

p00hsticks

Snowwhale78 said:

Given that I would expect my forecasted Benefit on retirement to change over time but my annual statements show the same yearly pension.


Thanks

Are you requesting those statements or is the company proactively providing them ?

My understanding is that there is no obligation to provide further statements for deferred Defined Benefit statements after the point it is deferred until you approach the time it comes into payment.

So perhaps,  as Dazed_and_Confused suggests, you are simply getting copies of the same statement each year, rather than it being updated.... 

Albermarle

When I left my employer where I had a DB pension , I was given a piece of paper that stated the pension I would be entitled to at age 65. Although I knew the pension would be uprated each year due to inflation , I never received any info on what the pension was worth in the following years , until I actually applied to take it .
What you can do , is read the scheme rules regarding how it should be increased each year and get historical  RPI/CPI data from Google, and then approx work it out yourself.

sandsy

A lot of DB schemes don't provide updated figures. It's unhelpful.

The only reason I can think of for it is that the cap on increases doesn't apply each year but, as an annualised average, across the entire period from when the benefits became deferred until they come into payment.

xylophone

When exactly were you a member of the scheme?

When you left, were you given a statement of deferred benefits?

If so, what does it say?

Snowwhale78

Hi All,

Thanks very much for the feedback and replies.

I believe as some have stated that the Scheme wont calculate the actual Defined Benefit until I reach the Normal Retirement date.  If that's the case its no problem as I can make some rough calculations on what I know already.  I might call them up just to clarify that and let you know in case it helps others in the future.

To clarify a few things:
I said I got an annual statement but that's inaccurate.  I had gotten a Transfer Quote which is very different of course.
The information I got on the Statement of Deferred benefits is what I added in the OP.
I joined the Scheme in 2002 and left in 2011.

Regards

xylophone

Presumably you were given a statement of pension accrued at date of leaving service.

As you did not join the scheme until 2002, you do not have a GMP.

From what you have said in your original post, this would seem to be relevant.

https://www.barnett-waddingham.co.uk/comment-insight/blog/revaluation-for-early-leavers/

Terron

I asked for an updated statement from my DB scheme a few years before it was due to start. As I remember I was entitled to do so once per year, though that may have been scheme specific.

savingholmes

I too can get a CETV annually - and my scheme sends me an updated figure annually anyway. You can certainly request it. Once a year is free for the scheme I'm in.

Albermarle

savingholmes said:

I too can get a CETV annually - and my scheme sends me an updated figure annually anyway. You can certainly request it. Once a year is free for the scheme I'm in.

I think maybe you have misunderstood . What many schemes do not update is what your annual pension will be when you reach the Normal Retirement Age .