Partners new job (value of public sector pension)

S

sinbad75

Registered User
Messages
27
Hi,
Just looking for some advice. My partner was recently made redundant, and thankfully, has had a number of job offers. My question is, how much is a defined benefit pension worth? He has had an offer of 65k with a 5% employee, 5% employer pension, and an offer of 55K with a defined benefit.
 
Re: Partners new job

Are you jokin !!

you give what she was offered , not her monetary input, years of service, pension scheme details etc ...

Go to a pensions actuary with relevant details, and get him to make an estimate.Maybe get some former colleagues to hire a consultant and split the costs.


http://www.actuaries.ie
 
Re: Partners new job

I take it the pension with the 65K salary is a defined contribution pension. With the 5% contribution this reduces the salary to 62K.

Does the employee have to contribute to the defined benefits scheme. If not this is very unusual. How much will he be entitled to when he retires.
Don't forget that in most schemes the state pension is deducted.

In relation to the DC scheme. See the pensionboard calculator. You need to crunch the numbers. If you can contact the pension provider and ask them to project how much the pension will be worth at retirement. They will make certain assumptions. Ask them what the assumptions are. Remember that not all the contribution will be invested. There is a monthly charge, an annual charge and the bid offer spread to be deducted.

With a DC scheme your pension may not be as you expect. The market could turn against you in the final years.

At least with a DB scheme you know what you are going to get when you retire.

If you think either scheme is going to fall short of what amount of pension you require you can make AVC to your pension subject to revenue rules.
 
Re: Partners new job

Apologies


I mixed up Defined Contributions with Defined Benefit !!
 
Re: Partners new job

According to the recent report from , the value of public sector DB pensions exceeds the value of similar private sector DB pensions by 15% of salary.
The Review Body also commissioned a detailed examination of the value of public service pensions for the grades covered by our remit by reference to pensions arrangements in the private sector. The consultants who carried out this study conducted a similar exercise for the Public Service Benchmarking Body. The key finding of the study was that the pensions of the groups covered by our terms of reference are significantly more valuable than the pensions of comparable groups in the private sector. The superior value was assessed by the Review Body’s actuarial advisers as being 15% of salary.
Click to expand...
 
According to the recent report from , the value of public sector DB pensions exceeds the value of similar private sector DB pensions by 15% of salary.
Click to expand...

In case of any confusion this only applies where one job is in the public sector and the other job is in the private sector. The OP needs to clarify. Also are both job offers inclusive of DB schemes. I think the first job offer is a DC scheme but I could be wrong.
 
Hi just to clarify,
Job 1 is 55K plus a defined benefit pension of 40/60ths of your final salary, minus the state pension.

Job 2 is 65K, with the employer contributing 5% and the employee contributing 5%.

Thanks!
 
Just so that you are aware the db pension is 1/60 for each year worked up to a max of 40 years, my point being your partner may not get 40/60 of salary when he retires if for example they have only worked 30 years. The state pension is deducted on the basis of 1/40 for each year up to a max of 40/40 (full state pension). That said the DB pension is looked on as being more beneficial as it is secure as you can plan your retirement knowing how much you will be getting.

In relation to the DC scheme. did you feed your partners details into the pension calculator. For someone aged 30 they need to put approx 13,000 pa into a pension fund to come out with 2/3 of 65K at retirement

This will reduce your partners salary by 5,500 to bring it down to approx 59.5K and he has used up his full amount allowed for tax relief.

With the DB pension your partner can make AVC' to his pension scheme to increase his pension position.

You really need to crunch the numbers
 
You must log in or register to reply here.
Back
Top