Old defined benefit pension choices

pitza

Hi. I'm about to retire and amount a few old terminated policy's I have a replacement policy for an old Norwich union now with Aviva. It's a defined benefit occupational pension with a guaranteed pension of 5 years and a death - after - retirement spouses pension and also an inflation increase of 3% compound a year.

It's only a small pension with a current transfer value of £23,000 and I've just found out that I can take it as a one off payment so my question is

In general terms am I likely to loose much by taking this option?

flaneurs_lobster

Do you have a spouse?

Are you at the "normal pension age" for the DB pension?

Don't know what a "guaranteed pension of 5 years" means.

In (semi) answer to your question - it depends (amongst other things) on how long you live after taking the pension.

QrizB

Don't know what a "guaranteed pension of 5 years" means.

Many DB schemes guarantee to pay out for a minimum five years, even if the beneficiary dies in that period. This is in addition to any spousal pension.

Silvertabby

Are you sure you've been told that you can take it as a one-off lump sum? DB trivial commutation generally only applies if the total notional values of ALL pension holdings (bar the State pension) are under £30K.

Dazed_and_C0nfused

To be honest some of the op makes it sound more like a DC pension than a DB one.

Marcon

How much is 'a small pension '?

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81968017#Comment_81968017

I can't see anything to suggest it isn't a DB scheme. What's making you think it's a DC scheme…?

daveyjp

If the small pension is £100 a year £23k coukd be seen as an excellent option. If its £5k a year probably not. However first job is to understand exactly what you have.

Were you once employed by Norwich Union, hence the occupational pension?

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81968037#Comment_81968037

It probably is a DB scheme, there are more pointers to that I guess.

It was the "few old terminated policy's" coupled with the fact there could well be a lot more people with DC pensions at Norwich Union/Aviva then DB ones?

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81968049#Comment_81968049

If it's an old scheme it could simply be one that was fully insured (rather than 'self administered'), or it could have been bought out and OP is now looking at that policy.

Were you once employed by Norwich Union, hence the occupational pension?

Norwich Union is the provider, so no need for OP to have been employed by them for it to be an occupational pension.

xylophone

Is this a S32 policy replicating the terms of a former employer's DB Scheme?