Pension very depleted

molerat

How much will it pay as an annual pension ?

Unfortunately the time to cash it in was a couple of years ago, that boat has now sailed.

dunstonh

She's not concerned about the effect on any pension this might have produced as she always intended to take the cash lump sum. She hasn't contributed into this scheme since 2011.

CETVs (transfer value) are priced on the cost of covering the liabilities  After the credit crunch, gilt yields dropped to record lows.  So, this pushed the cost of liabilities higher.  So, CETVs went up to record highs.       This was always going to start unwinding at some point.  

However, in 2022, it effectively unwound in the space of a year (nov 21 to Oct 22).   CETVs are now back to their more typical values.

If she wanted to take advantage of a high CETV than that window has gone and is unlikely to return again in our lifetimes.

However, the defined benefits are completely unaffected by this as there is no pot.   The value is just the transfer value. 

steliz

The pension is worth around £1100 PA at the moment.

I think I have a clearer understanding of this now. We presumed the transfer value was a reflection of the profits on investments but, if I've understood this correctly, it is a value placed by the pension provider on how much they would give as an alternative to providing the pension. Is that correct?

DE_612183

steliz said:

The pension is worth around £1100 PA at the moment.

I think I have a clearer understanding of this now. We presumed the transfer value was a reflection of the profits on investments but, if I've understood this correctly, it is a value placed by the pension provider on how much they would give as an alternative to providing the pension. Is that correct?

ok, so how old is she and when can she start taking the pension?

Oh, and don't forget it's probably index linked as well so will go up with inflation ( unless inflation is huge like it was last year ).

Dazed_and_C0nfused

steliz said:

The pension is worth around £1100 PA at the moment.

I think I have a clearer understanding of this now. We presumed the transfer value was a reflection of the profits on investments but, if I've understood this correctly, it is a value placed by the pension provider on how much they would give as an alternative to providing the pension. Is that correct?

Yeah, it's effectively what they are willing to bribe her with to avoid having to pay £1,100/year.  Plus inflation increases.  For the rest of her life.

Pat38493

Dazed_and_C0nfused said:

steliz said:

The pension is worth around £1100 PA at the moment.

I think I have a clearer understanding of this now. We presumed the transfer value was a reflection of the profits on investments but, if I've understood this correctly, it is a value placed by the pension provider on how much they would give as an alternative to providing the pension. Is that correct?

Yeah, it's effectively what they are willing to bribe her with to avoid having to pay £1,100/year.  Plus inflation increases.  For the rest of her life.

Ok but a 7.5K CETV for a pension that pays £1100pa doesn't make sense either does it?

OP where did the 7.5K number in your first post come from?  

steliz

Pat38493 said:

Dazed_and_C0nfused said:

steliz said:

The pension is worth around £1100 PA at the moment.

I think I have a clearer understanding of this now. We presumed the transfer value was a reflection of the profits on investments but, if I've understood this correctly, it is a value placed by the pension provider on how much they would give as an alternative to providing the pension. Is that correct?

Yeah, it's effectively what they are willing to bribe her with to avoid having to pay £1,100/year.  Plus inflation increases.  For the rest of her life.

Ok but a 7.5K CETV for a pension that pays £1100pa doesn't make sense either does it?

OP where did the 7.5K number in your first post come from?  

She can log in and the transfer value is available there along with amount for the deferred pension.

Pat38493

Ok well I'm sure other experts here can comment, but from my limited knowledge, a transfer value of £7.5K is extremely low for a pension that will pay £1100 per year for the rest of your life.

Is the pension index linked?  What does it say in the documents about revaluations or adjustments before and after the pension is put into payment?

xylophone

With regard to the dropping CETV

https://www.thisismoney.co.uk/money/pensions/article-11315527/Why-pension-transfer-value-plunged-740k-340k.html

However. if your wife is shown as having an annual pension of £1100 a year, the CETV of £7500 seems remarkably low.

Has she received any kind of statement from the Administrator?

What is the name of the scheme to which she belonged?

Does she have a scheme guide? Is it available on line?

We are retired but not yet at state retirement age.

Have you yet obtained state pension forecasts?

https://www.gov.uk/check-state-pension

Check the figure for estimate at 5/4/22/(23).

A full NSP is now £203.85.

Are your estimates equal/more/less?

What is the COPE shown on her forecast?

steliz

No, she never gets any communication from them other than the annual statement. The pension is called The First Bus Pension scheme.

I have checked the state pension figures and her pension will be less as she hasn't contributed enough years, I'm not sure how that's relevant.

I can't see any reference to COPE, what does it mean?