Defined Benefit Pension - Stay of Go?

AChara

Registered User
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I’m a deferred member of a defined benefit pension scheme (left service 6 years ago). I’m 61 years old with a scheme retirement age of 65.

The deferred pension is €23,078pa with a widows pension of two thirds. The current transfer value is €493,000. The benefit is indexed linked at CPI to retirement age.

The transfer value has appreciated significantly over the 6 years and I suspect any increase in TV by remaining in the scheme would out strip any investment growth I could get via a retirement bond over the next 3+ years – assuming the scheme remains in a sound financial position.

I was quite happy to remain in the scheme until recently. However, the most recent valuation I got seems to contain a lot more caveats like “the amount shown is not guaranteed”, “the trustees reserve the right to reduce/suspend”, “values are subject to ongoing review particularly in light of recent market trends” etc etc.
The scheme was fully funded as of the last valuation date of December 2017. The next valuation I understand is December 2020 (every 3 years). And likely another 6 to 8 months after that before those details become available.

Given that the scheme was fully funded last time it was valued in 2017 but the next valuation isn’t for another 6 months is there any way of knowing if the scheme’s financial position has disimproved?

If benefits were to be reduced before I reach 65 is there any way of determining how dramatic that reduction is likely to be?

If there is a reduction in benefits and accordingly the transfer value, would the drop be such that it still might make sense to remain in the scheme versus a conservative investment strategy in a retirement bond?

In an ideal world I intended to remain in the scheme until just before retirement age and decide at that point whether to take the deferred pension of transfer out and invest in an ARF.
 
While some DB pension schemes have failed or failed to meet expectations, it is not that common.

Its not just a question of the scheme being fully funded, many schemes are not fully funded but still pay all the promised benefits.

Is the company behind the scheme one that is likely to be able and willing to stand behind its pension scheme.
 
I'm surprised you say it's not that common that DB schemes default for want of a better word. Everything I've read and see over the last few years suggests that many/most are either in distress and have reduced benefits or closed the scheme?

Also surprised to read that some underfunded schemes pay out in full?

Regarding the company being willing and able to fulfill their promise, I would certainly think that they're 'able' but the 'willing' part is surely part of the problem. They were a very decent employer for the nearly 20 years I worked there. But surely former employees are not top of their priority list.

Thanks for your reply cremeegg.
 
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