CETV - Expected drop since Dec 21 and GMP question

LHW99

Fairwinds said:

Thanks for the replies - Pretty devasting to be looking at £700k at 55 and thinking lose the early penalties and should be looking at £1m, to now getting a figure in the £300s

On the GMP - I'm reluctant to raise in case it detracts from my pension further - is there any way this could be beneficial?

For a DB scheme, the CETV is irrelevant unless you are going to transfer out *which is costly, and not easy these days).

The point of a DB is that it provides a given income, based on years of service, and it will do that no matter how the CETV changes - hence the reason people say "there isn't actually a pot of money".

How the income is increased before / after putting the pension into payment is determined by scheme rules, as is any possibility of a lump sumn / exchanging lump sum for pension or vice versa.

GMP levels have a mandatory revaluation (or not) depending on the exact years etc AFAIK

Cobbler_tone

LHW99 said:

Fairwinds said:

Thanks for the replies - Pretty devasting to be looking at £700k at 55 and thinking lose the early penalties and should be looking at £1m, to now getting a figure in the £300s

On the GMP - I'm reluctant to raise in case it detracts from my pension further - is there any way this could be beneficial?

For a DB scheme, the CETV is irrelevant unless you are going to transfer out *which is costly, and not easy these days).

....or get divorced 

MarkCarnage

Fairwinds said:

Thanks for the replies - Pretty devasting to be looking at £700k at 55 and thinking lose the early penalties and should be looking at £1m, to now getting a figure in the £300s

On the GMP - I'm reluctant to raise in case it detracts from my pension further - is there any way this could be beneficial?

Look at it another way - your valuable DB benefits remain.....there was a window of several years where the CETVs were aberrantly high for reasons already covered. I did take advantage of it for a couple of smallish deferred pensions (total CETV was c£270k, giving up about £7.5k of pension) but did not consider doing so for my main DB pension which remained, and remains, the cornerstone of retirement strategy. 

The early penalties don't really translate to a higher CETV in any case. All they reflect is the expectation of paying the pension for x years longer. So it was never going to go to £1m, £700k already reflected extremely distorted market conditions. 

Did you check whether the 'no reduction at 60' is in fact a formal part of the Trust Deed or just a discretionary issue? You also mentioned that you were advised that you would not be disadvantaged by the move to a buy out (assuming that's what happened). That doesn't necessarily mean that the factors won't be amended....all it means is that the basis for amendment is likely to be same as if the fund had still been under the Trustees control.