Immediate early pension or wait until 65?

I'm aged 53 and was made redundant 2 years ago.

My previous employer's pension plan is a defined benefit one which allows for early retirement after 50 years of age. My pension payable at normal retirement date (65) is €19,700. My pension payable now is €8,700 - reflecting a discount.

I've an AVC funded currently valued at €190,200. This value reflects a recovery from a drop last year of about €20,000. The AVC must be realised at the same time as the pension

Should I cash it in now or wait. I know that there are a number of factors - interest rates, annuity rates, increasing livespan etc. Maybe wait until 2 or 3 years?

I'd appreciate any views.

Dilemma

Who checks the actuary?

I am in a very similar position to yourself. My own view is to simply wait until I need to claim against my defined benefit pension. At 55, 58, 60 whatever. Probably unlike yourself I only took out a small AVC but kept most of my redundancy money to live off. I have to say that the company managing my pension are most unhelpful with a different staff member answering my queries any time I contact them. They have also made mistakes in calculations which frightens the life out of me. Therefore, how do I know if the calculations they make when calculating pension at 55, 58, 60 are correct. Is there a mathemathical set of guidelines here or does some actuary have sole responsibility for the figures produced?

Who checks the actuary?

There is a set of guidelines, however these are tough going for non-actuaries (and not worth the effort, I'd suggest).

Effectively the 'value' of the pension should be equivalent, that is, the value of the annual payments payable from 53 will equal the value of the annual payment payable from 65.

The reason for most of the difference is obvious, in that 12 years additional payments will be made.

Allowance is also made for expected investment returns, and probability of survival.

Some Schemes will specify how early retirement pensions are calculated (ie the actuary drafts a whole table of factors in one go rather than doing the calculations on a case by case basis). These may be available on request in relation to your Scheme.

Hopefully this helps?