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    • OBG
    • By OBG 13th Jan 19, 8:23 AM
    • 16Posts
    • 0Thanks
    OBG
    Defined benefit advice required
    • #1
    • 13th Jan 19, 8:23 AM
    Defined benefit advice required 13th Jan 19 at 8:23 AM
    I am 56 and was given as part of a divorce settlement a portion of a DB pension which is still managed and is part of the company scheme.

    For clarity I myself do not contribute to the scheme.

    I can also take the pension at any point I decide.

    What I am struggling with is how the valuations have increased like they have. Please see below.

    If I started taking the pension in Nov 2015 I would have received

    6800 per annum with no lump sum or 5000 with a 32,700 lump sum.

    (I didn't start taking the pension)

    18 months later in July 2017, the figures had gone up to;

    10,000 per annum with no lump sum or 7,400 with a 49,500 lump sum.

    (Again I didn't start taking the pension)

    16 months later in Nov 2018, the figures had gone up to;

    12,000 per annum with no lump sum or 9,000 with a 60,700 lump sum.

    I realise the figures will increase because I haven't started to draw the pension, but these increases seem high to me.

    Any advice or explanation would be greatly appreciated.

    Regards

    OBG

    Q. Entered on behalf of a friend.
Page 1
    • LHW99
    • By LHW99 13th Jan 19, 12:00 PM
    • 1,669 Posts
    • 1,536 Thanks
    LHW99
    • #2
    • 13th Jan 19, 12:00 PM
    • #2
    • 13th Jan 19, 12:00 PM
    DB pension benefits are calculated on years of service and salary (of your ex). Is your ex still employed by the same company?
    • OBG
    • By OBG 13th Jan 19, 12:36 PM
    • 16 Posts
    • 0 Thanks
    OBG
    • #3
    • 13th Jan 19, 12:36 PM
    • #3
    • 13th Jan 19, 12:36 PM
    No. He is retired.

    It was in 2004 when the pension between us was split into two separate pots.
    • Marcon
    • By Marcon 13th Jan 19, 1:13 PM
    • 630 Posts
    • 464 Thanks
    Marcon
    • #4
    • 13th Jan 19, 1:13 PM
    • #4
    • 13th Jan 19, 1:13 PM
    Best idea is to contact the scheme and ask them to clarify. If your ex is over the scheme's normal retirement age, it could be some sort of late retirement factor which is kicking through to your 'share' (even though you are only 56) but it's impossible to know from the information given.
    • Alexland
    • By Alexland 13th Jan 19, 1:49 PM
    • 4,204 Posts
    • 3,524 Thanks
    Alexland
    • #5
    • 13th Jan 19, 1:49 PM
    • #5
    • 13th Jan 19, 1:49 PM
    Yes probably the result of both inflation linking and a generous later retirement factor. Still worth contacting the scheme to understand your options going forward.
    • OBG
    • By OBG 13th Jan 19, 4:12 PM
    • 16 Posts
    • 0 Thanks
    OBG
    • #6
    • 13th Jan 19, 4:12 PM
    • #6
    • 13th Jan 19, 4:12 PM
    Thanks for the advice folks.

    It was when I did my own quick calculations, there appeared to be no consistency between the increase in the second two values after the initial valuation in 2015.

    With the rate the pension has increased, the quandary is to take the pension now at 56, or wait for further increases.

    Decisions, decisions!
    • OldBeanz
    • By OldBeanz 13th Jan 19, 5:08 PM
    • 798 Posts
    • 622 Thanks
    OldBeanz
    • #7
    • 13th Jan 19, 5:08 PM
    • #7
    • 13th Jan 19, 5:08 PM
    Thanks for the advice folks.

    It was when I did my own quick calculations, there appeared to be no consistency between the increase in the second two values after the initial valuation in 2015.

    With the rate the pension has increased, the quandary is to take the pension now at 56, or wait for further increases.

    Decisions, decisions!
    Originally posted by OBG
    With a DB pension it is a rule of thumb on here that they are best taken at NRA. You should enquire what that is in your circumstances.
    When you take the pension depends on numerous factors which you have not touched on. Good luck
    • hyubh
    • By hyubh 13th Jan 19, 6:41 PM
    • 2,345 Posts
    • 1,799 Thanks
    hyubh
    • #8
    • 13th Jan 19, 6:41 PM
    • #8
    • 13th Jan 19, 6:41 PM
    It was when I did my own quick calculations, there appeared to be no consistency between the increase in the second two values after the initial valuation in 2015.

    With the rate the pension has increased, the quandary is to take the pension now at 56, or wait for further increases.
    Originally posted by OBG
    The way you put things sounds a bit backwards to me. Presumably you are a 'pension credit' member of your ex-spouse's scheme? If so, you have a normal retirement age in the scheme (may be different to your ex-spouse's), and fundamentally things work back from that, in particular the actuarial reduction for taking the pension early, and the commutation factor for exchanging pension for lump sum (given commutation doesn't appear to be flat rate).

    I'd ask the administrator for the current tables for each - for the early retirement factors, the table in question would be the equivalent of this -
    https://www.lgpsmember.org/more/reductions.php

    Also, if you aren't clear when your NRA actually is, get the administrator to confirm. It would also be useful to confirm how exactly your pension revalues until NRA (i.e. increases for inflation).
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