ETV - Good Value?

McBeardy

New Member
Messages
2
Hello all,

First post, although long time watching from the sidelines.

I'm 50 years old and have just been offered an ETV from a previous employer with whom I have a deferred DB pension. I am just looking for some thoughts on whether this presents good value and whether it would be reasonable to expect I could match the DB scheme offerings which can be taken from age 53.

DB Scheme
22k PA at age 53 + 81k Tax free lump
29k PA at age 63 + 81k Tax free lump
inflation included up to max 5%
Spouse gets half if i die


ETV Offer
Transfer value 405k
Top up value 310k
Total 715k

Many thanks
 

Brendan Burgess

Founder
Messages
41,450
On something as complex as this, you really should pay an actuary to give you advice on it.

There is a very good chance that some anonymous poster on askaboutmoney will give you their opinion and you will have no way of knowing whether they can distinguish their ankle from their elbow.

Brendan
 

Marc

Frequent Poster
Messages
1,131
Completely agree with Brendan on this. Far too many people being blinded by the large numbers without stopping to assess why they are being offered an enhanced transfer value in the first place.

This looks very similar to a Bank Scheme offer I reviewed recently.

I've built a calculator here https://globalwealth.ie/defined-benefit-pensions

which allows you to use your own risk profile and desired retirement date to arrive at a discount rate for the pension in order to work out what the defined benefit pension is worth to you (rather than the scheme actuary)
 
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McBeardy

New Member
Messages
2
Thanks both. I have a meeting with independent advisor to follow next week so won't be doing anything rash without advice. It is a big decision but figured any comments I get (good or bad) could provide me with some questions i may not have thought of myself.
 

Marc

Frequent Poster
Messages
1,131
assuming a balanced attitude to risk and current annuity rates to determine discounted value of your future pension in today's terms to compare with transfer value

4988

Estimated cost to provide your pension if you were retiring today
€ 1,467,611.34​

For illustration purposes only

Assuming reasonable health at 63
4989
 

Duke of Marmalade

Frequent Poster
Messages
2,815
Throw in the spouse 50% and it does not look a very attractive offer on the face of it.
Maybe if you share elements of the independent advice you could get good feedback here. I agree with Brendan's cautions but you can also get excellent advice on AAM as seen from Marc's posts. I wouldn't be rushing to pay for more professional advice.
 

SBarrett

Frequent Poster
Messages
3,465
Throw in the spouse 50% and it does not look a very attractive offer on the face of it.
Maybe if you share elements of the independent advice you could get good feedback here. I agree with Brendan's cautions but you can also get excellent advice on AAM as seen from Marc's posts. I wouldn't be rushing to pay for more professional advice.
There's a 50/50 chance they'll be recommended MAP 3 or Prisma 3 out the gate :rolleyes:
 

Duke of Marmalade

Frequent Poster
Messages
2,815
There's a 50/50 chance they'll be recommended MAP 3 or Prisma 3 out the gate :rolleyes:
Yes, but the real call is whether the ETV is good value in the first place. I agree with you when it comes to the investment advice that might be offered. I presume that OP is getting advice on the value aspect as well as the investment aspect.
 

Marc

Frequent Poster
Messages
1,131
Yes, but the real call is whether the ETV is good value in the first place. I
And that’s the rub isn’t it.

occupational pensions are regulated by the Pensions Authority but Financial Advice and Financial Advisers are regulated by the Central Bank.

There is a gap here in consumer protection that you can drive a coach and horses through.....
 
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