What is my DB scheme worth?

M

money_man

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Maybe I cant draw direct comparisons but part of my pension is Defined Benefit. It currently guarantees me approx 6.5k/annum on retirement (but is linked to my final salary so should increase). I cannot earn any more years service for the DB scheme as we have been moved to a DC scheme.

I am wondering, is there a calculator I can use that would tell me the equivalent fund value this 6.5k is worth in a DC scheme. i.e. how much I would need to have invested now to project a 6.5k/annum income in retirement?
 
30+ ... really in the current outlook ?
One would have to worry about they prospects of getting anything like the promised benefit for a DB.
I’d personally bit the hand off my DB fund of the offered a transfer value equal to half its actual actuarial value.
 
I assume it would also depend on whether the €6.5K pa (or whatever) is index-linked after retirement, and in what way. Also whether the pension ends at death or if there is a survivor pension included.
 
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In my view all DB funds are essentially pyrimid schemes and they’re collapse looks increasingly likely.
 
It's based on annuity rates by pension providers
So if you want annual return of 6.5k how much capital would you have to give
Some providers charge 30x
Some 25x
So it might be worth between 162k and 195k

Effectively driven by interest rates, inflation and future expectations of interest rates
 
Early Riser said:
I assume it would also depend on whether the €6.5K pa (or whatever) is index-linked after retirement, and in what way. Also whether the pension ends at death or if there is a survivor pension included.
Click to expand...

I wouldn't assume any DB pension is index linked. That is usually at the trustees discretion and as most DB schemes don't actually have the funds to meet their obligations, the pensions don't always increase in payment.

The 20 times is the multiplier that was used on all DB pensions up to 1 December 2014. They then recognised that a pension payable from age 60 is worth more than a pension payable from age 65. The multiplier for a pension payable from 60 is 30 and from 65 is 26.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
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