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  • FIRST POST
    • Julia1927
    • By Julia1927 12th Jul 18, 12:53 PM
    • 23Posts
    • 1Thanks
    Julia1927
    Just Checking re Final Salary Pension
    • #1
    • 12th Jul 18, 12:53 PM
    Just Checking re Final Salary Pension 12th Jul 18 at 12:53 PM
    I am a member of a final salary pension scheme that closed in November 2015.

    Having been made redundant from the company earlier this year (now 62) I have begun to look at my pension position in the hope of making plans of if and when I could retire. (I currently work part time and am contributing to a DC pension).

    Every year I recieved a benefits statement showing how much pension I had accrued in my DB pension to date and a projected amount at NRD of 65.

    Going through the paperwork I noticed that my benefits statement pre closure dated October 2014 (I was 58) showed:
    "This page confirms the pension you have built up so far is 8.9k per annum and the page opposite calculates what your pension could be if you pay into the scheme until NRD". (11.8k per annum)

    The October 2015 statement advised I would recieve a closure statement in due course.

    I received my closure statement in January 2016. One of the options was "As you are over 55 you can choose to take a full pension now of 7k.

    I contacted the pensions team and asked why there was a 21% reduction (7k vs 8.9k) between what I'd built up in 2014 and my closing statement. I was advised benefits are revalued every 3 months.
    (The 3 yearly revaluation was carried out in March 2017)

    Can I just check with you learned folk that this is likely to be correct.

    Thank you.
Page 1
    • GunJack
    • By GunJack 12th Jul 18, 1:14 PM
    • 10,432 Posts
    • 7,812 Thanks
    GunJack
    • #2
    • 12th Jul 18, 1:14 PM
    • #2
    • 12th Jul 18, 1:14 PM
    Most (if not all) DB schemes will apply a reduction for taking the pension before the scheme Normal Retirement Date, 5% per year early is common.
    ......Gettin' There, Wherever There is......
    • marlot
    • By marlot 12th Jul 18, 1:23 PM
    • 3,705 Posts
    • 2,835 Thanks
    marlot
    • #3
    • 12th Jul 18, 1:23 PM
    • #3
    • 12th Jul 18, 1:23 PM
    > This page confirms the pension you have built up so far is 8.9k per annum

    At age 65


    > As you are over 55 you can choose to take a full pension now of 7k

    at your current age


    The payment is lower, but will be made for longer so it should roughly even out.
    • comeandgo
    • By comeandgo 12th Jul 18, 1:23 PM
    • 2,256 Posts
    • 3,062 Thanks
    comeandgo
    • #4
    • 12th Jul 18, 1:23 PM
    • #4
    • 12th Jul 18, 1:23 PM
    The 8.9k was if you retire at 65, you are looking at retiring earlier so the pension will have to be paid to you for longer so there is a reduction applied.
    • Brynsam
    • By Brynsam 12th Jul 18, 1:38 PM
    • 1,676 Posts
    • 1,232 Thanks
    Brynsam
    • #5
    • 12th Jul 18, 1:38 PM
    • #5
    • 12th Jul 18, 1:38 PM
    Looks about right.
    • Julia1927
    • By Julia1927 12th Jul 18, 1:43 PM
    • 23 Posts
    • 1 Thanks
    Julia1927
    • #6
    • 12th Jul 18, 1:43 PM
    • #6
    • 12th Jul 18, 1:43 PM
    Thank you all for the confirmation. Much appreciated.
    • mgdavid
    • By mgdavid 12th Jul 18, 4:07 PM
    • 5,783 Posts
    • 5,108 Thanks
    mgdavid
    • #7
    • 12th Jul 18, 4:07 PM
    • #7
    • 12th Jul 18, 4:07 PM
    21% reduction for going 7 years early is 3% reduction p.a. which is pretty generous. 5% is nearer the norm.
    You need to get a current valuation, as you will now only have 3 years reduction and will have had 4 years of CPI or RPI increases, do you know which your scheme uses?
    Last edited by mgdavid; 12-07-2018 at 4:10 PM.
    The questions that get the best answers are the questions that give most detail....
    • Julia1927
    • By Julia1927 12th Jul 18, 4:31 PM
    • 23 Posts
    • 1 Thanks
    Julia1927
    • #8
    • 12th Jul 18, 4:31 PM
    • #8
    • 12th Jul 18, 4:31 PM
    Thanks mgdavid,

    I believe all benefits built up pre June 2012 increase with RPI and post June 2012 by CPI.

    I will ask for a new quote. Thank you.
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