DB scheme being dissolved: How exactly is transfer value of benefits calculated?

H

huskerdu

Registered User
Messages
2,546
Hi all,
Due to a company ownership change, our DB scheme has been wound up, and we are being moved to DC.

I have received a statement of the transfer value of my benefits which are being transferred to a DC scheme.
This value was calculated, I have been told, based on the amount necessary to give me a deferred pension of 2/3 of my salary.

Does anyone know where I can get further information about how these calculations are done?

The Pensions Bord website does not cover this issue.
 
This value was calculated, I have been told, based on the amount necessary to give me a deferred pension of 2/3 of my salary
Click to expand...

I would be very surprised if this was the case unless you had over 40 years service with the organisation. I would think that the transfer value is calculate based on you receiving a pension at age 65 based on the number of years already worked.

No of years with organisation 25
Salary 40,000
State pension say 10,000 for the sake of this illustration.
Pensionable salary 33,750 (40,000 - (10,000 * 25/40))
Pension 33,750 *25/60 = 14,063
Is this guaranteed. If so why are they closing the pension scheme?
If not does it become part of your defined contributions. You may end up with a smaller pension in relation to your 25 years with the organisation. The value above can fall as well as rise? Check this out?

Have you your previous pension statements. These are issued every year (legal requirement). Compare the current statement with previous one.

There are calculated using acturial methods
 
You should consider a buy out bond.The preserved benefit will grow at 4% or the Consumer Price index,whichever is the lower.Inflation is going to go through the rooof because of energy cost increases so the max growth of 4% will be well eroded by the inflation rate.
 
Thanks for the responses.
I do know that that pension is prorated for the number of years service, sorry
I didn't make this clear.
The DB pension scheme is being dissolved and a value has been placed on my pension entitlements so far which is being transferred to a DC scheme.

It is information on the calculation of this value that I am interested in.
 
This post in keyposts above is a few years old but is worth reading. Indeed the entire at the top of the forum is worth a read.
 
You must log in or register to reply here.
Back
Top