Revaluation of a Defined Benefit Pension

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Flybytheseat

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According to the pensions authority (see below link): "A preserved benefit payable to a member from a defined benefit pension scheme will normally be revalued over the period from the member’s date of leaving service to 1 January prior to the date the benefit becomes payable. The rate of revaluation for any full year will broadly be the increase or decrease in the Consumer Price Index in that year, subject to a maximum increase of 4%. The revaluation percentage for any year is prescribed by the Minister for Social Protection by way of regulations following the end of the year."
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lifecycle/glossary/revaluation.html

When I left my previous employer in 2005 I received a letter stating that my deferred DB benefit pension would be €3,750 p.a. Is there a calculator I can use to calculate the current revalued per annum pension and also to calculate what the revalued pension will be worth at my normal retirement date in 2033 ?
 
As an estimate, you could just use the CPI figure to date - c35% from mid 2005 to mid 2023. However you might need to reduce that figure for any year the CPI exceeded 4% (so 2022 & 2023)
Going forward you could assume a figure, say 3% to project to 2033.
Alternatively ask the administrator of your previous scheme for an updated figure.
 
You should be getting annual updates from the administrator

Do they have your current address?
 
jpd said:
You should be getting annual updates from the administrator

Do they have your current address?
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DB schemes haven't had to provide deferred members with annual updates until this year, so it's likely OP hasn't had anything from them since leaving the scheme (but should get something soon).
 
Thanks to all the contributors. Most useful.

One further question......is the actuarial value of such a small DB pension also included in the Standard Fund Treshold (SFT) calc for €2M ? If so how is the value derived ?
 
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Just want to say to all the contributors - you guys are great and a big thank you to Brendan for creating this forum. The amount of advice and facts Ive learnt and received on here are exceptional. Cant sing your praises enough. :):)
 
Flybytheseat said:
Thanks to all the contributors. Mose useful.

One further question......is the actuarial value of such a small DB pension also included in the Standard Fund Treshold (SFT) calc for €2M ? If so how it the value derieved ?
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Yes. The SFT limit (in reality its €2.15m) includes all pension benefits. DB pensions are valued using a multiplier, depending on the exact benefit. Typically the multiple might be c25:1. So a DB pension of €4,000 might be valued at €100,000 for SFT purposes.
 
BlackandBlue said:
Curious, I always assumed that DB scheme's were linked to final salary.
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Not necessarily. It can be linked with career average earnings (as in the PS Single scheme).
And how increases after retirement are calculated can vary. In traditional PS schemes they have been linked to increases in the pay grade you retired at. But this is not generally so.
 
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