# Defined Benefit Scheme Is Winding Up



## carpedeum (18 Sep 2010)

The long established formerly blue-chip *DB* scheme, of which I am a *deferred member* is being wound up by my former employer due to a substantial deficit incurred over the past two years.

I have been advised that the company will be (fortunately for me as a deferred pensioner) securing *100%* of the transfer value of my accrued benefits to my date of leaving in line with actuarial guidance. This amount will be paid into a *Personal Retirement Bond*. The company has secured preferential terms from an insurance provider.

Obviously, this is very worrying. My concern at the moment is the amount of accrued benefits that will be transferred. 

How is the amount of accrued benefits calculated?
Is there a standard formula that I can use to check the figure the company will give me?
Does the phrase _with actuarial guidance_ add some subjective variance to the calculation?
Are there specific tax benefits that I should be careful to maximise?
Are my AVC's added to the PRB (my AVC's are secured independently of the wind up)?
I have an existing separate PRSA.
Can my PRSA be added to the PRB at this time or should I keep the PRSA for future employment?

The *normal retirement age* for the scheme was *60*.
I had *28 years pensionable service*.
I am now *over 50*.
The pension was non-contributory.
I am resident in Ireland.
I am married with children.
I am currently not working having recently completed a medium term contract.

In light of the above information are there particularly vital questions that I should be asking?

There is a helpline provided by the company, but, obviously I want to gain as much independent knowledge before contacting them.

Any advice will be greatly appreciated. I totally understand that investment decisions regarding the PRB are my responsibility.


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## TheFatMan (22 Sep 2010)

How is the amount of accrued benefits calculated?
This will depend on the nature of the scheme you were a member of. Check the membership handbook. Most DB schemes are based on 80ths earned. In your case I would assume you'll get 28/80ths of whatever you were entitled to at retirement

Is there a standard formula that I can use to check the figure the company will give me?

See above or ask them for a full detailed explanation of how they arrived at the value. If not satisfied you can always lodge a complaint on the internal complaint process for the fund (ask them for a copy of this process usually gets them up and running a lot quicker)
Does the phrase _with actuarial guidance_ add some subjective variance to the calculation?

Some actuarial approach needs to be taken to calculate net current value of a benefit you are not expected to get for another 20+ years. Ask them what the process is in detail
Are there specific tax benefits that I should be careful to maximise?
None that I know of for this procedure
Are my AVC's added to the PRB (my AVC's are secured independently of the wind up)?
the trustees of the scheme are also responsible for your AVCs I would assume they will transfer to the PRB as the old scheme completely winds down.

I have an existing separate PRSA.
Can my PRSA be added to the PRB at this time or should I keep the PRSA for future employment? 

You should be able to instruct the trustees of the old scheme to transfer the value to your PRSA (including the AVCs) and only have 1 product to worry about. Alternatively you may be able to merge the PRB and the PRSA at a later date

But you should call the company helpline and get as much info as possible and keep asking about other options. Trustees like to limit options to make such wind downs simple but sometimes they can be flexible with you to expedite the whole thing

Hopet his helps


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## GSheehy (22 Sep 2010)

carpedeum said:


> The company has secured preferential terms from an insurance provider.


 
Do you have the detail on these terms?


GS


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## carpedeum (22 Sep 2010)

TheFatMan,

Many thanks for the reply. Your advice will help me when I ring the Helpline.

GS,

No, I've not received those details yet. The first stage is getting the transferable value, which I'm still waiting for.

Best regards,

C.


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## TheFatMan (6 Oct 2010)

Hi Was wondering how you got on here.
Did they play ball?


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