Defined Benefits Multiplier

I recently received communication that that I have the potential to exceed the Standard Fund Threshold for a Defined Benefits pension. The communication outlined a multiplier to covert my annual pension into a capital value. Prior to 2014, the multiplier is 20; since 2014 the multiplier is 26. I joined the plan in 2006.

The pension is calculated as follows: 2% x Final Pensionable Salary x Pensionable Service

My Question: Is the 8 years (2006-2014) of pensionable service calculated at the 20 multiplier & the remaining contribution at the 26 multiplier?

So, let’s say my defined pension would be €100,000 & I retire with 40 years of service. Is it:


ps Not sure if I was happy to receive the communication or not! ;-)

SeamMcC said:

My Question: Is the 8 years (2006-2014) of pensionable service calculated at the 20 multiplier & the remaining contribution at the 26 multiplier?

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Have a look at the worked example here. It seems to suggest that your pre-2014 value is indeed calculated using the lower multiple multiple of 20, but you use the notional pension value in 2014, not at career end.


FWIW I think that the SFT will be increased by the time you retire.

Thanks @NoRegretsCoyote. Link is a great help in understanding the calculation.

NoRegretsCoyote said:

FWIW I think that the SFT will be increased by the time you retire.

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Hopefully!