Are you suggesting that it's in the members interests to remain in the scheme because any future TV is somewhat protected by the Omega case? Is the Omega ruling that significant?
What would happen to TVs if deferred benefits were severely reduced as in the INM case? Would the Omega ruling protect TVs in this instance?
Can you explain what you mean by TV "of the order of six times". What does 6 times refer to?
Of course highly, highly unlikely a return of 7% could be achieved. But as against that, the pension is not guaranteed. Surely that's the nub of this discussion.
I'm coming to the conclusion that it's exactly that - a gamble. And you won't know if you've won until such time as you reach retirement i.e. did the scheme sponsor deliver the promised deferred benefits or was the TV route the way to go.
In the OP's specific case, the scheme is not closing. They made an offer to encourage members to exit. It is a solvent scheme even after the dramatic increases in liability costs in the past few years. So we cannot lump it in with the "problem" schemes like INM, Waterford etc.
Omega case may or not apply, it may depend on the rules of the trust deed, specifically who has the power to set the contribution rate. In the Omega case, the scheme actuary had the absolute power to determine the contribution rate and he requested a final contribution on closure based on a lower discount rate (think it was around 4% back in 2011). If it is an old scheme it is possibly similar to the rules in the Omega case. Regardless, what Omega has done is set out clearly that when a scheme is closing, the standard transfer value ( which is based on rates determined by the Dept of SW) is only the minimum and the Trustees are entitled ( and quite possibly now
required) to request a more favourable TV that properly reflects the value of accrued benefits. This of course requires a strong set of Trustees or someone to put the pressure on them.
My reasoning for the OP is mainly based on his age - If the OP was in his mid/late 50's and offered 120% ETV then it needs to be considered very differently than the OP who is 38. At his age he has little to gain as his standard TV will be up 20% in less than 3 years anyway. There is a risk of course, but I think it is one worth taking when everything is considered.
In my view, basing an ETV on a % of standard TV is less advantageous for younger members than older members. A more equitable method may be to calculate the enhancement based on lower discount rates across the board. In this way, everyone gets a figure closer to the current market value.
Regarding your "6 times" query, a scheme closing using a discount rate of say 1% would have a very large impact for young members, up to 6 fold for members in their early 30's. This is because there is such a long period to retirement and the benefit of using low rates is magnified. If the OP went to an insurance company to buy a deferred annuity policy payable at age 65, the cost would be based on an interest rate of less than 1%. This is the market value of his pension.