Value of pension indexation

[2err]

My firm currently offers a non contributory defined benefit pension scheme which is not index linked post retirement.

We are being offered indexation at 3% p.a. if we contribute 5% of our gross salary p.a. going forward to the scheme.

Is this a fair deal ?

 

[Azriel]

Is indexation being offered on service up to this point?

For example, if you are 55, with a retirement age of 60, and have been a member of the pension scheme since the age of 30, you have to pay 5 years of 5% contributions, but benefit from indexation on 30 years of benefit.

If it is, then it should be a better deal for those with significant levels of service accrued.

Without knowing all of the scheme benefit rules it would be difficult to be more definitive than that, however the Trustees should be acting in the Members' best interests, so perhaps a sensibly worded question to them?