CETV - Thoughts?

montventoux

My wife and I are in the process of getting our ducks lined before we both hit the retirement button next October aged 58.  The plan is to live off savings (cash, S&S ISA’s) until aged 60 and beyond 60 put our work related pensions into payment.

In terms of my wife’s pension she has a small DB pension which was valued at £3,200 at the time the scheme closed 31/03/2017.
She joined the scheme in January 1999 and I understand indexation is CPI though with the following caveats:-

Before 6 April 2009 maximum increase allowed is 5%
After 6 April 2009 maximum increase allowed is 2.5%

Additionally, I believe there is death benefit based on the scheme rules though I do need to contact the Scheme Administrator for further details.

The pension has a CETV of £60,000 ( so would need to take financial advice) and I’m aware values have dropped in the last 12 months of so but do wonder whether it’s something still worth considering?

 If so, the value would be transferred into her DC pot (same employer) bringing it to circa £145k.

Stubod

My CETV really tanked during the last 12 months...not far of half the value I had been quoted over the preceeding years, so I decided to stick with the monthly pension instead. I guess the only way you will know what is right for you is to set up a basic spreadsheet and test out the various scenarios?

Marcon

montventoux said:

My wife and I are in the process of getting our ducks lined before we both hit the retirement button next October aged 58.  The plan is to live off savings (cash, S&S ISA’s) until aged 60 and beyond 60 put our work related pensions into payment.

In terms of my wife’s pension she has a small DB pension which was valued at £3,200 at the time the scheme closed 31/03/2017.
She joined the scheme in January 1999 and I understand indexation is CPI though with the following caveats:-

Before 6 April 2009 maximum increase allowed is 5%
After 6 April 2009 maximum increase allowed is 2.5%

Additionally, I believe there is death benefit based on the scheme rules though I do need to contact the Scheme Administrator for further details.

Thoughts? So much information missing. Find out the facts, surely, before going any further. What's the pension worth now/projected to be at 60? You say maximum increases 'allowed' but I suspect the rules say something else entirely - those look like statutory increases and it would be unusual not to have at least the possibility of discretionary increases. Likely to be a spouse's pension payable if she dies before you do.

montventoux said:

The pension has a CETV of £60,000 ( so would need to take financial advice) and I’m aware values have dropped in the last 12 months of so but do wonder whether it’s something still worth considering?

 If so, the value would be transferred into her DC pot (same employer) bringing it to circa £145k.

'Had' or 'has' - i.e. is that a current CETV? If so, the clock is already ticking and you'll be lucky to find any adviser who will be able to jump through all the hoops before the guarantee period expires.

Why would transferring it to her DC pot be in her interests? Have you looked to see what sort of annuity £60,000 would buy? I appreciate you may favour drawdown, but doing the comparison gives a reasonable indication of why such a move might not be a great idea.

Albermarle

If you type 'DB transfer' in the search box at the top of the page, there are numerous threads on the subject. Most are about the difficulty and cost in the actual transfer process. You should note that most of them are from a year or two ago, when CETV values were much higher. The chance of a successful transfer now is even more slim.

draiggoch

Is the old DB scheme and the new DC scheme linked? I’m aware that this was the case in my previous employer and it allowed the entirety of the DC scheme to be taken as the PCLS. 

This was after the DB scheme had been closed but both schemes were run by the same pension administrators.