Deffered pension valuation

Cear

Advice please.
I have two deffered DB pensions both with the same company payable at age 60. I got in touch last year to ask what value they are worth so I can plan my pension and they just sent me the value they were worth with the predicted amount at retirement that they gave me when I first left the company. 
Am I correct that I can request what they are actually worth now rather than just a prediction or at least an upto date prediction and can do this once a year? Or are they correct in what they say that they can only provide the information that was given at deferment until I just before I actually withdraw the pensions at age 60.
It is very hard to plan ahead when I know that these 2 pensions would have increased but not by how much.

Krakkkers

I think the valuations are falling right now as interest rates rise.

molerat

Krakkkers said:

I think the valuations are falling right now as interest rates rise.

That would only apply to transfer values.  Pension payment amounts would be increasing according to the scheme rules in force.

As to op's question, I believe they are correct in that they only must give you those figures on request, anything else is voluntary.

Krakkkers

Yes, I misunderstood what was being asked.

xylophone

I have two deffered DB pensions both with the same company payable at age 60.

These are not Public Service or quasi public service pensions?

What were your periods of service?

What exactly is shown in your statements of deferred benefits on leaving the scheme?

Are you male or female?

What  exactly does your scheme guide have to say about revaluation in deferment?

If you do not have a copy, you may find it on the internet.

Albermarle

Depending on what the scheme rules say about inflation linking/revaluation in deferment, you may have to just estimate what it is by researching historical inflation rates.

dunstonh

I got in touch last year to ask what value they are worth so I can plan my pension and they just sent me the value they were worth with the predicted amount at retirement that they gave me when I first left the company.

The CETV has no impact on your retirement planning.   It doesn't matter what the value is unless you are transferring out of that pension.

Am I correct that I can request what they are actually worth now rather than just a prediction or at least an upto date prediction and can do this once a year? Or are they correct in what they say that they can only provide the information that was given at deferment until I just before I actually withdraw the pensions at age 60.

They are worth exactlty the same as they were other than inflation changes.  There are no predictions issued.

It is very hard to plan ahead when I know that these 2 pensions would have increased but not by how much.

it is easier to plan for retirement using defined benefit schemes as nothing changes other than indexation.    Normally, they do not update these to you unless you ask for them but there will be a limit on how many times you ask. 

Lemon_dr1zzle

dunstonh said:

I got in touch last year to ask what value they are worth so I can plan my pension and they just sent me the value they were worth with the predicted amount at retirement that they gave me when I first left the company.

The CETV has no impact on your retirement planning.   It doesn't matter what the value is unless you are transferring out of that pension.

Am I correct that I can request what they are actually worth now rather than just a prediction or at least an upto date prediction and can do this once a year? Or are they correct in what they say that they can only provide the information that was given at deferment until I just before I actually withdraw the pensions at age 60.

They are worth exactlty the same as they were other than inflation changes.  There are no predictions issued.

It is very hard to plan ahead when I know that these 2 pensions would have increased but not by how much.

it is easier to plan for retirement using defined benefit schemes as nothing changes other than indexation.    Normally, they do not update these to you unless you ask for them but there will be a limit on how many times you ask. 

Many people use the word ‘value’ as the ‘annual amount’ not the actual CETV ‘value’

Cear

Thank you all for your replies.

I seemed to have confused you over what I am asking my fault entirely sorry.

I am at work at the moment so do not have exact figures but roughly.

Both pensions are nearly (but not quite the same figures)

so my annual income from each pension on leaving is something close to
£1800 per year + Lump sum £5400
or
£2500 with no lump sum (These fiqures are not exact but close)

1) September 1989 - March 1997

2) March 1999 - Feb 2002

both increase each year depending on  RPI 

According to the fact sheet on web site.

For benefits earned before 1 January 2013 Your pension and any lump sum in respect of service before 1 January 2013 will be revalued each calendar year in line with the annual increase in the Retail Prices Index (RPI), subject to a maximum annual increase of 12%.

But do need to check my scheme rules given when signing up for the pension as for the first one it is a pension that got taken over by the university paying the second one hence why I have 2 pensions by the same university (not USS scheme) and got taken over after I had left the university for the 2nd pension. I am sure the first one the paperwork said would increase by RPI to a maximum of 5%.

The relevance is for pension planning that getting a guarenteed annual pension of £3500 for both or an annual pension of £4500 for example does make a difference on how much I need to try to make my DC pension worth. Both are payable at age 60 (I am female NRA is 67)

So if I can find out what the RPI each January (assuming when it says annually this is on January's RPI for after 2013 it states calculations at max 5% based on RPI in August) is for these years can I then work it out by adding what ever the RPI is (percentage wise) for each year or do they calculate it some other way?

no plans to transfer out of the pension schemes.

 

zagfles

What you need is the RPI index here https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/chaw/mm23

So assuming they use Aug RPI, and assuming they use whole years starting the year you left until last year, take the index in the Aug of the year you left and the index last Aug, divide them, this gives the RPI increase factor, and multiply by the pension at leaving. So eg Aug 2002 the index is 176.4, Aug 2021 is 307.4, dividing then gives increase factor 1.7426.

For the cap - it's almost certain the cap during deferment applies to the overall inflation over the period of deferment, which means the odd year of high inflation won't matter as long as average inflation was below the cap. That's how statutory rules work anyway, but yours is better than statutory. (note than once in payment, indexation usually works on individual years so odd years of high inflation do matter then)

You can check it's not above the cap by taking the n'th root of the increase factor where n is the number of years deferred and check that's not greater than 1+ cap%/100 eg 1.05 for a 5% cap. It won't be above the cap now, but if inflation stays high for a few more years it might. So now, 1.7426^(1/19) = 1.0297 so well within the cap.

If some of the first pension is GMP, that part would probably revalue differently.

xylophone

https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/czbh/mm23

shows % increase which may be of interest.

In respect of your statement of deferred benefits for pension 1, what is shown for

Post 88 GMP

Excess?

How does the GMP revalue in deferment ?

https://www.barnett-waddingham.co.uk/comment-insight/blog/what-is-a-gmp/

In respect of Pension 2, what exactly is shown as your pension at date of leaving?