Deferred DB taking early , no reduction

xylophone

Hi  xylophone. Thanks, i have read this and i am pretty sure I left in 1996. I will check and confirm the situation.
Cheers

Do you have your scheme guide from when you left and perhaps a statement of deferred benefits?

Brie

I would have thought this would also be outlined on your annual pensions statement.  

TWT may confirm one way or the other.  And they may get the answer wrong.  They did with me and cost me significantly.

philng

Brie said:

I would have thought this would also be outlined on your annual pensions statement.  

TWT may confirm one way or the other.  And they may get the answer wrong.  They did with me and cost me significantly.

I would not believe a word Willis Towers Watson tell you. Currently got a complaint going through Pension Ombudsman.

Albermarle

philng said:

Brie said:

I would have thought this would also be outlined on your annual pensions statement.  

TWT may confirm one way or the other.  And they may get the answer wrong.  They did with me and cost me significantly.

I would not believe a word Willis Towers Watson tell you. Currently got a complaint going through Pension Ombudsman.

To be fair it is not just WTW, other large pension administrators have not all got the best reputations either.

eastcorkram

Brie said:

I would have thought this would also be outlined on your annual pensions statement.  

TWT may confirm one way or the other.  And they may get the answer wrong.  They did with me and cost me significantly.

I doubt TWT would send out an annual pension statement. They certainly don't send one to me. Just a leaflet talking about the overall position of the fund. Nothing personal at all.

Marcon

eastcorkram said:

Brie said:

I would have thought this would also be outlined on your annual pensions statement.  

TWT may confirm one way or the other.  And they may get the answer wrong.  They did with me and cost me significantly.

I doubt TWT would send out an annual pension statement. They certainly don't send one to me. Just a leaflet talking about the overall position of the fund. Nothing personal at all.

If you're a deferred pensioner, then it's normal to simply receive an annual Summary Funding Statement.

Active members normally do get annual statement.

NedS

Dunky62 said:

Hi

I have a deferred DB pension ( Exxon ) with NRA of 65.  Apparently I can take it early from age 60 with no reduction. I am 60 in December this year.  However as i am still working, I intended to wait a couple of years until I retire, rather than take it and pay 40% tax on it. I assumed that the fact i didn't take what would be approx. 15k a year for the next 2 or 3 years would be reflected in my eventual pension figure.  Spoke to Willis Towers Watson yesterday and apparently not!!  In deferment it just increases with RPI capped at 5%.  Is this normal?   I now feel it is a no-brainer to take it at 60. I am fortunate that my present employer  scheme ( also DB ) has an AVC  which I can pay this Exxon pension into, effectively cancelling out the 40% tax. This AVC can be taken as a tax free lump sum when I retire , provided it is less than 25% of total pension benefits. Does this make sense?

Thanks

It's not uncommon, although as mentioned previously you should check the scheme rules. I have 2 DB pensions in deferment that allow benefits to be taken early, before the scheme NRA, without reduction that like yours would pay the same at NRA (revalued for inflation).

I would think it unlikely they would pay a higher pension at NRA if you didn't take them early. If that were the intention, why not just make the NRA 60 instead of 65? The benefit you are getting, as you identify, is that you can take the pension 5 years early without reduction.

The only negative against taking early is that your RPI increases are capped at 5%. Once you take the pension, this cap is applied annually, so if RPI is 10%, you would only see a 5% increase in the pension that is in payment. On the other hand, if you leave the pension in deferment then that 5% cap is applied over the duration of the deferment (time you left the scheme to the time you take benefits), so if average inflation over that period remains below 5%, you may still see the full 10% increase this year, if that's what RPI currently is. However, I'm assuming this is unlikely to offset the £15k/year you have not received.

9elf

I also discovered (buried in the details of a 30 yr old scheme booklet) that I can take my DB pension at 60 with no reduction.  I had to ask the administrator several times to explain that to me as it just seemed too good to be true.  Apparently it is is true, so I get access to a chuck of money 5 years early……that moves my retirement date up by a few years.  Happy Days.

In my case it was my original employer scheme that was replaced by a new scheme after a mega-merger then revised at the next acquisition and then…you get the idea.  I had to dig to find this out.  I have no idea if the administrators would have pointed it out at some point, but I would assume not.