CETV what to do with it ?

dunstonh

Perfo said:

NoMore said:

Just as an example of how CETV have changed, I have a DB pension of 24k, 150k Lump sum. 18 months ago the CETV was just shy of a million, now its at about 450,000.

BTW I never intend to transfer out, I understand the value of the index linked guaranteed income the DB pension gives. 

Wow, that is worrying as all the people that spoke to me about it were referring to maybe five or more years ago.. The calculation must be difficult as it takes them so long to give you a CETV and you can only ask for one per year..  I haven't managed to find a detailed calculator on line either.. 

CETVs peaked around October 2021.   Since then they have more than halved.      They have returned to their historical norm.  2008-2021 CETVs were artificially high compared to the long-term average.

You wont find a reliable calculator online as the liabilities and assumptions are scheme specific.   

Perfo

Thanks for all your comments.. As per normal then I turned up after the party :-) . I wouldn't have been old enough in 2021 anyway but it always seems to be the way I look at something when the deals are duff.   I'll continue waiting for my actual CETV value but if it does get anywhere near the 2M mark I will be extremely tempted to do my own thing with it  via a self managed DC scheme or something. Of course once I have all the data I will spend a few £ on getting detailed advice.. This is one thing you really don't want to muck up as not much chance of putting it right once retired..  

xylophone

Of course once I have all the data I will spend a few £ on getting detailed advice.. 

If you are looking for  a  DB to DC transfer of benefits valued at over £30,000, you'll have no choice in the matter!

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

You'll need to find a Pension Transfer Specialist and the fees will not be low!

https://techzone.abrdn.com/public/pensions/tech-guide-db-to-dc-transfers

Marcon

Perfo said:

Thanks for all your comments.. As per normal then I turned up after the party :-) . I wouldn't have been old enough in 2021 anyway but it always seems to be the way I look at something when the deals are duff.   I'll continue waiting for my actual CETV value but if it does get anywhere near the 2M mark I will be extremely tempted to do my own thing with it  via a self managed DC scheme or something. Of course once I have all the data I will spend a few £ on getting detailed advice.. This is one thing you really don't want to muck up as not much chance of putting it right once retired..  

Think upwards of £5K for the regulated advice you'd need if you are considering transferring...

Gary1984

Perfo said:

The pot could be almost gone by the time I'm 85 I'm not looking to protect the whole investment for eternity. ?But even if there's only £5 left I'd want it rather than the pension scheme having it away with it .. 

I don't think you're thinking with a clear head here. You'd rather give up very good guaranteed benefits and risk running out of money at 85 in order to...? What exactly? Get all 'your' money out? That's just not how pension schemes work. It's a collective undertaking. If you die earlier than expected your excess contributions pay the pensions of your colleagues.  Is that what you mean by 'having it away with it'.  The scheme doesn't have a bundle of fivers with your name on it that you can lay claim to.

Sure you can take the CETV but you won't know if you would have got even more from staying in the scheme until you're dead. You might be saving them a lot of fivers by taking the CETV and then living to 100.

And are you taking the scheme rules salary definition a bit personally perhaps? Just retire or withdraw from the scheme within the next 7 years and maintain your higher salary definition. That should give you a generous guaranteed pension with a State Pension to follow.

Linton

Gary1984 said:

Perfo said:

The pot could be almost gone by the time I'm 85 I'm not looking to protect the whole investment for eternity. ?But even if there's only £5 left I'd want it rather than the pension scheme having it away with it .. 

I don't think you're thinking with a clear head here. You'd rather give up very good guaranteed benefits and risk running out of money at 85 in order to...? What exactly? Get all 'your' money out? That's just not how pension schemes work. It's a collective undertaking. If you die earlier than expected your excess contributions pay the pensions of your colleagues.  Is that what you mean by 'having it away with it'.  The scheme doesn't have a bundle of fivers with your name on it that you can lay claim to.

Sure you can take the CETV but you won't know if you would have got even more from staying in the scheme until you're dead. You might be saving them a lot of fivers by taking the CETV and then living to 100.

And are you taking the scheme rules salary definition a bit personally perhaps? Just retire or withdraw from the scheme within the next 7 years and maintain your higher salary definition. That should give you a generous guaranteed pension with a State Pension to follow.

Yes, plus if you take the CETV and “win” by dying young you will be dead and so won’t experience the satisfaction of knowing you were right. However if you live longer than your funds you will spend years regretting your foolish mistake.

Perfo

xylophone said:

Of course once I have all the data I will spend a few £ on getting detailed advice.. 

If you are looking for  a  DB to DC transfer of benefits valued at over £30,000, you'll have no choice in the matter!

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

You'll need to find a Pension Transfer Specialist and the fees will not be low!

https://techzone.abrdn.com/public/pensions/tech-guide-db-to-dc-transfers

I wouldn’t entertain it anyway, it’s too big a decision  to make on what I think I know. I guess the rules make you do it to prevent people getting scammed 

Perfo

Wow greater than 5k just for the advice …. I knew it wouldn’t be cheap but how many hours would it take an expert to work out and tell me the options what hourly rate do they charge ?  I would imagine that even though it is a mine field for me it would be pretty standard stuff for someone in the trade…. I’ve change my mind on, they force you to do it so you don’t get scammed… it’s so you will get scammed 😀

Bimbly

Perfo said:

Wow greater than 5k just for the advice …. I knew it wouldn’t be cheap but how many hours would it take 

Many, many hours, as they have to look at your whole situation and produce a comprehensive report. Cost of the work also includes the cost of insurance and other associated costs. As advising in this area is risky, that's quite expensive for them. Indeed, many have stopped doing it entirely. As often discussed on this board.

QrizB

Perfo said:

Wow greater than 5k just for the advice …. I knew it wouldn’t be cheap but how many hours would it take an expert to work out and tell me the options what hourly rate do they charge ?

A good wedge of that goes on liability insurance, since advisers have been found to be liable for their customers' bad decisions even when they reject the advice given (something like "the adviser should have given stronger advice not to do X, and maybe then the customer wouldn't have done it").