Deferred company pension schemes at 60

Oldhouse

I have 4 pension 3 deferred company pensions and my current local government pension which as I am still working is still being paid into. I have 2 company pension which say that as I am 60 I can start to take them.

Oxford University Press
Options
1) take you benefits as a yearly pension £3,174

2) take tax free lump sum of £15,527 and a reduced yearly pension of £2,329


Metalbox Pension 
1) take £7,403 as a yearly pension. 

2) take cash lump sum £35,909 plus a reduced pension of £ 5, 386 per year.

3) a cash lump sum amount of your choice upto a maximum of the figure in option 2 plus a full scheme pension or an alternative option.

Alternative choices
# Taking your fund as a cash lump sum (if its within certain limits, this will tax free, otherwise it will be taxed as an Uncrystallised Funds Pension Lump Sum).

# Taking some of your fund as a cash lump sum
# Using part of hours pension to take a cash lump sum rather than using your fund.
# Using your fund to buy an annuity
Transferring to another pension arrangement such a drawdown pension.

Looks like a dont have an option to change the date to when I am 67.

My other 2 pensions will carry on until 67 or when I retire.

I have asked our financial advisor to take a look and provide a  suggestion he said for the Metalbox pension to take option 1 with RPI increase to max 5% per year for a dependent pension payable. 

I just want a second opinion. 

Thanks

Brie

You do have the option to take at 67 simply by not asking for them yet.  They should continue to increase in value as they look to be defined pension schemes instead of defined contribution ones.  

If I am right about them being DB schemes then I doubt you can transfer them anywhere except your current work scheme and maybe not even there.  You almost certainly wouldn't be able to transfer them into any DC type scheme to enable you to take drawdown unless you have a very limited life expectancy.  

Don't take a cash lump sum from both unless there's a specific need for a lump of cash (spectacular holiday?).

Consider what getting the extra income now will do to your current tax situation.  If you're currently getting around £30k a year at work these will take you into a higher tax bracket if you are not careful.  Of course that does make a good case for taking the lump sums I suppose as they would be tax free.  

Marcon

Oldhouse said:

I have 4 pension 3 deferred company pensions and my current local government pension which as I am still working is still being paid into. I have 2 company pension which say that as I am 60 I can start to take them.

Oxford University Press
Options
1) take you benefits as a yearly pension £3,174

2) take tax free lump sum of £15,527 and a reduced yearly pension of £2,329


Metalbox Pension 
1) take £7,403 as a yearly pension. 

2) take cash lump sum £35,909 plus a reduced pension of £ 5, 386 per year.

3) a cash lump sum amount of your choice upto a maximum of the figure in option 2 plus a full scheme pension or an alternative option.

Alternative choices
# Taking your fund as a cash lump sum (if its within certain limits, this will tax free, otherwise it will be taxed as an Uncrystallised Funds Pension Lump Sum).

# Taking some of your fund as a cash lump sum
# Using part of hours pension to take a cash lump sum rather than using your fund.
# Using your fund to buy an annuity
Transferring to another pension arrangement such a drawdown pension.

Looks like a dont have an option to change the date to when I am 67.

My other 2 pensions will carry on until 67 or when I retire.

I have asked our financial advisor to take a look and provide a  suggestion he said for the Metalbox pension to take option 1 with RPI increase to max 5% per year for a dependent pension payable. 

I just want a second opinion. 

Thanks

Second opinion based on what, exactly? You've said nothing about your objectives, attitude to risk, health situation, type of pension your 3rd company pension is (?sounds like it might be DC?)... 

Hopefully you are using an independent financial adviser? If not, that might be the place to seek a properly informed second opinion. All you'll get here is guesswork based on minimal background, which really isn't going to be of much help.

Oldhouse

So in answer to your comment.
My objective is to retire at 67 with enough pension with a decent amount to live on. Low risk investments especially how the stock market is at present. What is DC?
My other company pension has a retirement value of £36,327 its being looked after by Standard Life .

Yes I did ask an independent financial advisor. 

Oldhouse

Further to my post, I see that my 3rd company pension is a DC as its invested in buildings.

GrumpyDil

DC is defined contribution as opposed to DB which is defined benefit.

A defined benefit guarantees a payment of X per year based on your membership of the scheme whereas as defined contribution means you and your employer pay money into the scheme, the money is invested and the end result depends solely upon the performance of those investments. 

Your local govt pension is defined benefit whereas your others sound like a mixture but I don't think you have fully confirmed that, although I would assume the one looked after by Standard life is DC.

Note for most (if not all) DC policies you will have choices over the investments used, albeit most people seem to use the default investments set up by the scheme.

Albermarle

Oldhouse said:

Further to my post, I see that my 3rd company pension is a DC as its invested in buildings.

The money in DC pensions is usually invested in stocks and shares. Seems rather strange it is invested in 'buildings'

See this link for an explanation of the difference between DB and DC pensions.

Pension basics | Help with pension basics | MoneyHelper

Marcon

Oldhouse said:

So in answer to your comment.
My objective is to retire at 67 with enough pension with a decent amount to live on. Low risk investments especially how the stock market is at present. What is DC?
My other company pension has a retirement value of £36,327 its being looked after by Standard Life .

Yes I did ask an independent financial advisor. 

The advice you get should be tailored to your objectives - but how precise were your instructions? You have said above that 

My objective is to retire at 67 with enough pension with a decent amount to live on. 

Which is fine, but doesn't quite tie up with what you say his recommendation is:

I have asked our financial advisor to take a look and provide a  suggestion he said for the Metalbox pension to take option 1 with RPI increase to max 5% per year for a dependent pension payable. 

You have 3 DB pensions, where stock market performance is irrelevant - it's for the trustees of the schemes to decide on the investment strategies. You get the pension promised under the rules of the scheme.

Oldhouse said:

Further to my post, I see that my 3rd company pension is a DC as its invested in buildings.

That's highly unlikely - and if true, is at odds with your wish for 'low risk' investments (and they might also be illiquid).

Your adviser is giving you advice based on a full fact find (at least I trust he is), so why not go back and ask for more information/clarification of his recommendations? You're paying for advice, but asking him 'to take a look' isn't giving him any helpful pointers on what exactly you are concerned about/trying to achieve. The role of a good adviser is to maximise their client's chances to getting the outcome they say they want; maybe revisit what you've said you want and give a bit more detail on which he can assist?

Oldhouse

Thanks everyone