Balancing the best time to take my SAUL DB pension

katejo

I have a final salary/career average pension. A large chunk of it (1990-2016) is final salary so I won't lose very much if I retire before 66 (the 67 requirement only comes in in 2027). I have just reduced to working 3 days a week and have asked for a pension projection for April 2026. I am not quite ready to stop completely and want to see how well the 3 days a week works for me first. However, I am also trying to balance this with the possibility of never benefiting from the pension if I were to become ill/die suddenly. SAUL (unlike USS) doesn't allow a flexible retirement so I can't take any of the pension or lump sum until I hand my notice in. Anyone else in the same position? I am 62 now.

Brie

It's normal for many DB pensions if you are working for the same employer to not allow you to take your pension.  And I've never seen a DB pension that would allow you to take a lump sum and not immediately start your pension as well.  Unlike DC schemes which have much more flexibility.  

It may be possible to access your DB pension IF you are no longer an active member of the of any of their pension schemes.  But I'm not sure that's something to recommend when you are still a few years from stopping working for them.  

Is there any underlying guarantee to pay a beneficiary for their life or for a set number of years should you die quite early?  

katejo

Brie said:

It's normal for many DB pensions if you are working for the same employer to not allow you to take your pension.  And I've never seen a DB pension that would allow you to take a lump sum and not immediately start your pension as well.  Unlike DC schemes which have much more flexibility.  

It may be possible to access your DB pension IF you are no longer an active member of the of any of their pension schemes.  But I'm not sure that's something to recommend when you are still a few years from stopping working for them.  

Is there any underlying guarantee to pay a beneficiary for their life or for a set number of years should you die quite early?  

My senior colleagues who are on academic grades and have USS flexible pensions are allowed to start taking them while still working. I also know someone on a civil service pension (same age as myself) who has taken her lump sum to pay for urgent home improvements but is still working part time and paying into her pension. She expects to do so until 67. I have no need of my  lump sum now but would like to benefit from it before it is too late! I can do a letter of intent to ask SAUL to pay out some money to certain people but it is  at their discretion because I have no partner or dependents.

Brie

If you were to become exceedingly ill with a limited lifespan you would likely be able to transfer out your DB benefits and claim the whole lot in one go to buy a trip round the world or whatever.  Hopefully you won't be that ill but it then means you need to abide by the rules drawn up by the trustees of the scheme.  

katejo

Brie said:

If you were to become exceedingly ill with a limited lifespan you would likely be able to transfer out your DB benefits and claim the whole lot in one go to buy a trip round the world or whatever.  Hopefully you won't be that ill but it then means you need to abide by the rules drawn up by the trustees of the scheme.  

If I were exceedingly ill, I wouldn't be in a position to travel around the world! Yes I know I have to abide by the rules. That isn't my question. I am simply trying to balance the pros & cons of carrying on working & paying the max into my pension v taking it sooner and actually benefitting from it!

Brie

Is 66 actually the normal retirement age on the scheme?  I find this unusual as in the past it was 60 or 65.  I'd double check that as admins can make mistakes (they did with me).    I wonder if someone is confusing it with the current normal age for getting one's state pension.  So the thing to do after confirming that is decide how much of a reduction there might be for receiving your pension before the NRA.  That might settle things for you.  

katejo

Brie said:

Is 66 actually the normal retirement age on the scheme?  I find this unusual as in the past it was 60 or 65.  I'd double check that as admins can make mistakes (they did with me).    I wonder if someone is confusing it with the current normal age for getting one's state pension.  So the thing to do after confirming that is decide how much of a reduction there might be for receiving your pension before the NRA.  That might settle things for you.  

I have already checked this several times over. I can have the final salary part now ,with no reductions,  if I want to but only by retiring completely. I can't just take the final salary part while still working. The normal retirement age on the scheme is now 66 and is due to go up to 67 in April 2027. My pension projection gives small deductions which would apply if I stopped now or at  64, 65 or 66.

Marcon

katejo said:

Brie said:

It's normal for many DB pensions if you are working for the same employer to not allow you to take your pension.  And I've never seen a DB pension that would allow you to take a lump sum and not immediately start your pension as well.  Unlike DC schemes which have much more flexibility.  

It may be possible to access your DB pension IF you are no longer an active member of the of any of their pension schemes.  But I'm not sure that's something to recommend when you are still a few years from stopping working for them.  

Is there any underlying guarantee to pay a beneficiary for their life or for a set number of years should you die quite early?  

My senior colleagues who are on academic grades and have USS flexible pensions are allowed to start taking them while still working. I also know someone on a civil service pension (same age as myself) who has taken her lump sum to pay for urgent home improvements but is still working part time and paying into her pension. She expects to do so until 67. I have no need of my  lump sum now but would like to benefit from it before it is too late! I can do a letter of intent to ask SAUL to pay out some money to certain people but it is  at their discretion because I have no partner or dependents.

Different schemes with different rules, so not relevant to your scheme.