I'm on a Defined Benefit Pension. It's a Final Salary Scheme with an accrual rate of 1/60 for each year’s membership, therefore 40 pensionable years gives an annual pension which is 2/3’s of the pensionable salary. I'll have completed 40 years when I reach 65. Currently, the pension fund is very healthy.
For argument's sake, if I stay with the company until the age of 65 and have a final salary of €110K, my pensionable salary will be approximately €66K,
Annual Pension value = 1/60 x €66,000 x 40
However, €66,000 x 40 = €2,640,000 which exceeds the Revenue limit of €2,000,000.
If I decide not to take a lump sum payment, is the maximum annual pension value €2,000,000 / 60 = €33,333 ??
Sorry if the question is a bit basic, I don't know too much about the workings of pensions.
Thanks
For argument's sake, if I stay with the company until the age of 65 and have a final salary of €110K, my pensionable salary will be approximately €66K,
Annual Pension value = 1/60 x €66,000 x 40
However, €66,000 x 40 = €2,640,000 which exceeds the Revenue limit of €2,000,000.
If I decide not to take a lump sum payment, is the maximum annual pension value €2,000,000 / 60 = €33,333 ??
Sorry if the question is a bit basic, I don't know too much about the workings of pensions.
Thanks