DB Pension question

N

nobbygob

Guest
Hi,

I'm trying to do some basic evaluation on my pension provision and have some questions I'm hoping the forum can help me with.

I am a member of a previous employers DB pension scheme. I have a deferred pension for which I become eligible to receive at 60 (currently aged 46). With my current employer I am a member of their DC scheme. The pension administrators provide a pension profiling tool that uses Schotastic(?) modelling. This can take into account my DB pension, but my DC pension and this tool are based on a retirement age of 65 - so my question after all that is, is there a way (formula or tool or rule of thumb) to adjust the projected value of pension at 60 to what it would be worth were I to retire at 65?

A secondary question - is it something that is at the discretion of trustees of the DB scheme or an entitlement on my part i.e.to push out collecting a pension to 65?

Thanks everyone
 
Very rough rule of thumb would be 9% per annum plus pension increases. So if you have pension increases of 3% would be 12% p.a.

Trustees Discretion as far as I know but you would need to check your own scheme rules specifically on this one.
 
In today's lower interest rate environment, 9% per annum would be at the upper end of the range of late retirement factors.

As Don says, you would need to check the scheme rules to see if they permit late retirement for deferred pensioners. Revenue practice allows you to defer drawing deferred benefits until you have retired from your last employment (or age 70 if earlier), but this doesn't oblige trustees to provide this option to members. Have you received a leaver statement from your old pension scheme? This may contain some information about early/late retirement options.

In general, I would expect trustees to be prepared to agree to allow you to delay drawing your benefits until you actually stop working (within reason), provided they can do so on a basis that is no worse than cost neutral to the fund. However, you won't know until you ask and they may not be prepared to give a commitment now as to how they (or their successors) might act in 15 years time when you reach age 60.

Regards
Homer
 
You must log in or register to reply here.
Back
Top