Leaving public sector for private sector pension question

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Zeldaf

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I am currently in the PS for almost 12 years. I will be 54 this year. My current salary is approx. 77k. I am buying back years which will bring me to approx. 37.5 yrs at 65 when I can retire or not (I don't have to). I have a private pension which is stopped with a current value of 74k (as at Sep 22). If I stay my pension current value will be 23k with 110k lump sum + old age pension. My pension is Defined benefit and will be c. 37.5 years in total in PS after buying back the years.

I have been offered a job with a salary of 105k + between 20%-35% bonus. EE pays 5% and ER 5% automatically into pension. I was considering paying 20% so that would bring the annual pension contribution between both to 25%. I also have the possibility of a lump sum payments depending on bonus etc. I think if I leave PS now my pension would be 9.5k with 50k lump sum. However I believe I read that the lump sum may be reduced each year by 1% between now and 65.

Am I mad to consider moving? Obviously there are other considerations but based on pension alone what are your thoughts as I am not great in this area and really don't want to totally screw myself up.
 
Zeldaf said:
My pension is Defined benefit and will be c. 37.5 years in total in PS after buying back the years.
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How many years have you bought back to date?

Zeldaf said:
However I believe I read that the lump sum may be reduced each year by 1% between now and 65.
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Only if you take cost-neutral early retirement (CNER). There are a lot of factors (including tax) but in your shoes it would probably make more sense to draw down your pension at 65 rather than take CNER.
 
As of today my actual years service is 11.3 years and notional 6.8 years. I don't intend drawing it down until 65 and will be resigning not retiring.
 
I don't think you're mad at all. Your current ps pension is integrated with the State pension and while good, isn't brilliant compared to pre92 ps pension.
If you make a pension contribution of the max allowed percentage of your offered salary for the next 10 years or so, you'll build up a nice little fund of 500k+ by age 65 as well as having a bigger disposable income in the meantime. (My crude back of envelope calculations.)
You'll still have your state pension plus your preserved ps pension. Not too shabby at all!
 
Thanks so much for taking the time to reply, appreciate it. It makes me feel better about it all now.
 
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