Deffered benefit pension scheme Fluctuations in growth

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81868010#Comment_81868010

This is a deferred pension, so the final pensionable salary would have been set at the time OP left active membership.

Flugelhorn

https://forums.moneysavingexpert.com/discussion/comment/81868013#Comment_81868013

good point

DRS1

Is it possible that the presentation of the figures have changed between 2023 and 2026? Maybe the 2023 figures were projected to a future date like normal retirement age while the 2026 figures are as at todays date? Or the 2023 figures included AVCs and the 2026 figures don't?

If whoever produced the figures knew that they were going down from a previous statement then you'd think they would have included an explanation. You should give them a call.

Marcon

OP - if you could post a screenshot of your statement (making sure any personal information such as NI number etc isn't shown), that would increase your chances of getting an answer based on hard facts. For now everyone is simply guessing, because there's nothing else to do.

WillowLeaf

I had the same query on the basis that my final salary is known, and should only ever increase with inflation. I queried this and got a reply stating that there are many variables that decide on the pension forecasts; interest rates, ensuring the fund is fully funded, gilts, life expectancies, inflation etc.

Could it be that these estimates are the reason? Eg

OP has 10 years to retirement, based on inflation guesses (say) they'll get £30k a year

Next year….

OP has 9 years to retirement, based on new inflation guesses we think they'll get £28k a year as inflation won't be as much

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81868378#Comment_81868378

Ah - I think you've hit the nail on the head! Looking back at the question, OP refers to 'receiving annual retirement quotations'. If they are requesting these on an annual basis (rather than receiving an automatic statement of deferred benefits, which is how I'd - probably wrongly - interpreted what they've written), then the scheme will be projecting forwards based on unknown factors. I'm a bit surprised they've been willing to do that year on year. Plenty of schemes won't, partly because of the work involved and partly because of the confusion it creates, as evidenced by this thread.

ewaste

I think there is a possibility that Yes there are AVCs and these fluctuate in value due to the underlying investments. However some of the AVCs are also being inversely commutted to additional annual pension as they exceed the maximum TFLS payable in relation to the accrued annual pension. Noting that the annual pension and TFLS are changing in lockstep with each other.