How long should I wait for a CEV

gammyleg

Hi,

I have been waiting since Feb 2023 for my pension administrator ( XPS ) to give me a CEV for my DB pension. Lots of promises that it will be sent through next week, etc etc but nothing. Latest message has been that the Trustees of the plan to put transfers out on hold temporarily as the factors are currently being reviewed.
What does this mean? Should I be worried?

Tommyjw

Well to start with they have to have provided a CETV dated 3 months from your original request.

Have you complained about the delay ? 

Values being on hold could mean the end result is your values go up or down depending on the actuarial review.

I'd be complaining and telling them to provide a guaranteed CETV with a calculation date of X May (3 months from when you requested in feb) plus one immediately as they are breaching their statutory obligations, and if the latest one is lower I'd be requesting the original value is honoured ... if you are actually intending to transfer out that is.

gammyleg

Thanks for the reply. I will get onto them directly quoting the 3 month requirement.
I'm not think of transferring out just yet, I just want to know roughly what it's worth. Looking at maybe 2 or 3 years before I seriously consider it.

QrizB

gammyleg said:

Thanks for the reply. I will get onto them directly quoting the 3 month requirement.
I'm not think of transferring out just yet, I just want to know roughly what it's worth. Looking at maybe 2 or 3 years before I seriously consider it.

Be aware that CETVs vary over time, sometimes quite substantially.

If you had a quote three years ago, the value today could be half as much.

gammyleg

QrizB said:

gammyleg said:

Thanks for the reply. I will get onto them directly quoting the 3 month requirement.
I'm not think of transferring out just yet, I just want to know roughly what it's worth. Looking at maybe 2 or 3 years before I seriously consider it.

Be aware that CETVs vary over time, sometimes quite substantially.

If you had a quote three years ago, the value today could be half as much.

I'm hoping that is not the case. My DC pension value almost doubled over that time period but I've had to give half of that one away as part of my divorce settlement. I managed to hold onto my DB pension in the belief it was the better option. We shall see.

Dazed_and_C0nfused

gammyleg said:

QrizB said:

gammyleg said:

Thanks for the reply. I will get onto them directly quoting the 3 month requirement.
I'm not think of transferring out just yet, I just want to know roughly what it's worth. Looking at maybe 2 or 3 years before I seriously consider it.

Be aware that CETVs vary over time, sometimes quite substantially.

If you had a quote three years ago, the value today could be half as much.

I'm hoping that is not the case. My DC pension value almost doubled over that time period but I've had to give half of that one away as part of my divorce settlement. I managed to hold onto my DB pension in the belief it was the better option. We shall see.

It is quite likely to be the better option.

But as the DB pension it was always really intended to be, not given up for whatever the scheme will give to get you off their books.

QrizB

gammyleg said:

QrizB said:

gammyleg said:

Thanks for the reply. I will get onto them directly quoting the 3 month requirement.
I'm not think of transferring out just yet, I just want to know roughly what it's worth. Looking at maybe 2 or 3 years before I seriously consider it.

Be aware that CETVs vary over time, sometimes quite substantially.

If you had a quote three years ago, the value today could be half as much.

I'm hoping that is not the case. My DC pension value almost doubled over that time period but I've had to give half of that one away as part of my divorce settlement. I managed to hold onto my DB pension in the belief it was the better option. We shall see.

In 2019 your CETV was £164k, forecast to pay out £5k pa??

https://forums.moneysavingexpert.com/discussion/comment/76067220/#Comment_76067220

Depending on exactly how it's index-linked, a £5k pension might be worth around £100k today.

gammyleg

That sounds quite depressing.

Pat38493

gammyleg said:

That sounds quite depressing.

DB pensions are not typically supposed to be cashed in and moved to a DC fund.  Even when the CETV values were really high a years or two back, most IFAs, in most situations, would recommend against transferring out of a DB pension, as you are unlikely to get the same benefit in the long run by investing the money yourself.

Also there is a statutory requirement to take advice from an IFA in order to transfer out of a DB pension and if the advice is negative (which is likely), your options are quite limited in how to do it (although it is still possible apparently).  However the advice itself will probably cost you several thousand pounds so that also has to be factored in as well.

Marcon

gammyleg said:

Thanks for the reply. I will get onto them directly quoting the 3 month requirement.
I'm not think of transferring out just yet, I just want to know roughly what it's worth. Looking at maybe 2 or 3 years before I seriously consider it.

Then it's a completely pointless request, at least for now. Your DB pension is a 'promise to pay...'.

The cash equivalent transfer value (CETV) doesn't impact on that promise, and as the CETV fluctuates the whole time, depending on market conditions/the basis the trustees have agreed for its calculation. The basis can be changed at any time without notice to members - and at present the trustees are reviewing the factors, so it's perfectly lawful to exceed the 3 month period, although possibly not by quite such a long period! There have been well-publicised delays with public sector pensions eg https://www.lppapensions.co.uk/news-hub/important-information-about-pension-transfers-divorce/

In short, the CETV won't tell you anything useful - but providing a CETV could cost the scheme money for no good purpose.

dunstonh

gammyleg said:

QrizB said:

gammyleg said:

Thanks for the reply. I will get onto them directly quoting the 3 month requirement.
I'm not think of transferring out just yet, I just want to know roughly what it's worth. Looking at maybe 2 or 3 years before I seriously consider it.

Be aware that CETVs vary over time, sometimes quite substantially.

If you had a quote three years ago, the value today could be half as much.

I'm hoping that is not the case. My DC pension value almost doubled over that time period but I've had to give half of that one away as part of my divorce settlement. I managed to hold onto my DB pension in the belief it was the better option. We shall see.

CETVs peaked around October 2021 (slight variances by about a month depending on the administrator).   Since then, CETVs have more than halved.

The DB pension is the better option but its CETV is not a measure of its real value.

That sounds quite depressing.

Not really.  You are still getting the same defined benefits (with indexation) that you always were.   The CETV is irrelevant for the vast majority of people.