Defined benefit element of works pension
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shilts
Posts: 78 Forumite
Good evening . I have been a member of my works pension for approx 18 years . For the first couple of years it was a defined benefit pension and from then until now defined contribution . The defined element gives me 7.2% of my salary . I then pay in 4.5% of my salary whilst the company pay 11.5% . My questions are as follows :-
Is this 7.2% the percentage of my final salary when I retire or indeed leave the company ?
Does this amount ever increase , ie , with inflation ?
With regards to the 16% that currently gets paid into my pension in the defined contribution element . Whilst there is 16% going in is there any growth that boosts this beyond 16% ?
Whilst I understand that my pension grows by RPi max 2.5% I didn’t know whether there was any additional growth .
If I left the company would the pot only grow by RPI max 2.5% ?
I have arranged an appointment with the companies pension rep but it is some way off , hence the questions . Many thanks for any help .
Is this 7.2% the percentage of my final salary when I retire or indeed leave the company ?
Does this amount ever increase , ie , with inflation ?
With regards to the 16% that currently gets paid into my pension in the defined contribution element . Whilst there is 16% going in is there any growth that boosts this beyond 16% ?
Whilst I understand that my pension grows by RPi max 2.5% I didn’t know whether there was any additional growth .
If I left the company would the pot only grow by RPI max 2.5% ?
I have arranged an appointment with the companies pension rep but it is some way off , hence the questions . Many thanks for any help .
0
Comments
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Do you have a scheme booklet? If not, get hold of a copy and do a bit of reading.
The defined benefit element you have built up could be based on your pensionable salary (your booklet will give the definition of that - it isn't necessarily the same thing as your actual salary) at the time DB build up ceased, or there could be a link to current salary. Again, the booklet will answer that question - ditto how it increases between now and when you leave the company/take your scheme benefits.
The DC section of your pension works quite differently. The 16% is invested and (hopefully) grows depending on the performance of the funds in which it is invested. Don't be alarmed if there are times when the value dips a bit - investment performance fluctuates over time. If you leave the company, it remains invested until you draw your benefits. Again, the change in value is based on fund performance.0 -
Thanks for the reply . I will see if I can find some literature regarding DB . I thought that it would only be the 16% per year plus RPI so that!!!8217;s good to know , thanks .0
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