DB Pension

Universidad · 23 February at 8:52PM

https://forums.moneysavingexpert.com/discussion/comment/81896254#Comment_81896254

The CETV isn't the total amount that's in your pot. As others have said, you don't have a pot.

Let's break down what other folks have hinted at so far with three questions: 1) Is there a pot, 2) what's in it for you, and 3) what's the CETV if not the value of the pot?

There genuinely isn't a personal pot of money with your name on it. You do not have pension savings that can be measured as an amount of money. The scheme has a "pot" in a sense - of everyone's money, not just yours - and they're investing assets to make as much profit as possible, in order to be able to pay out on their liabilities when the time comes. They're taking the investment risk, and you are not.
What you have instead of "pension savings" is a pretty much cast iron promise that they'll pay you a certain amount of money every year from retirement for the rest of your life, no matter how long you live, even if you make it to 100. That's the amount you care about knowing, not your CETV. If that amount is, say, 25,000 pounds then you will get, effectively, a retirement salary of 25,000 every year for the rest of your life, without having to do any more work to get it.
The CETV is the transfer value of your pension. In very blunt terms, it's how much your pension scheme will pay you to go away without them having to provide you with a pension. It's (by statue, I think) based on an estimate of how much it would cost them to provide your benefits, accounting for the fact they'll probably be investing over the next 20-40 years. It genuinely doesn't bear a lot of relation to how much your pension is worth to you, can vary wildly over time, and doesn't matter to you at all if you're planning to take the pension, unless it's incredibly high. For a very brief period in time some people discovered that it was, and many people did transfer out. Those days are over for a number of reasons, and not everyone who transferred out is better off for it, even when the sums were very big.

You are very lucky to have a couple decades of final salary pension.

Aretnap · 23 February at 9:00PM

I was inquiring weather to take it out and put it into a sipp because what they are offering is very good.

Well it's not really that good - it's less than half of what they were offering four years ago for the same pension.

The real time to think about transferring it was four years ago, but that ship has sailed. You didn't say how much monthly income you would be giving up for that £141K, but unless it's unusual low for the CETV, or you have other unusual circumstances such as a significantly reduced life expectancy, it's unlikely to be a good idea.