22 Jul 2020, 17:16
23 Jul 2020, 20:04
24 Jul 2020, 04:41
Dindin wrote:Can you clarify this CDC? So I pay in for twelve months to get £280 out? Each year minus 5 percent for taking early before age 67.
24 Jul 2020, 06:16
24 Jul 2020, 13:58
24 Jul 2020, 15:03
26 Jul 2020, 01:39
26 Jul 2020, 10:00
RobertT wrote:Dindin wrote:Can you clarify this CDC? So I pay in for twelve months to get £280 out? Each year minus 5 percent for taking early before age 67.
The accrual rate for CDC is 1/80ths of pensionable pay and 3/80ths for the Defined Benefit Lump sum Scheme. So based on current full time basic pay that would mean a pension of £287 and a lump sum of £861 for each year you're a member.
The aim is that those amounts will increase each year by inflation, but there's no guarantee they will, and they could go down.
Had the CSDB scheme stayed open, section B members would be building up roughly the same amounts of pension and lump sum, while section C would(based on my pensions contrib pay) be a pension of £343.
We don't yet know what the reduction will be for taking the CDC pension before NRA, but 5% per year is probably as good a guess as anything else.
26 Jul 2020, 10:36
Dindin wrote:If these figures of £287 a year and £861 lump sum a year take a 5% hit it won't be worth paying in to it.
26 Jul 2020, 11:03
RobertT wrote:Dindin wrote:If these figures of £287 a year and £861 lump sum a year take a 5% hit it won't be worth paying in to it.
The lump sum is via the Defined Benefit Lump sum Scheme(DBLSS), which is very similar to the current DBCBS. There's been some debate on how much the reduction is for taking the DBCBS before NRA, the result is that it's less than 5%, but nobody really seems to know how much.
I expect the reduction for taking the DBLSS early won't be as high as 5% either?
But I wouldn't be surprised to see a roughly 5% per year reduction for taking the CDC pension itself early.
The plan is also that CDC will have similar flexibility as individual DC schemes, so there will be the option to take a 'cash transfer' to a DC arrangement. But that is pending the legislation.
I would expect my contributions, based on full time £441 per week, to be about £26.50 into CDC/DBLSS, but factoring in tax relief and PSE it would only actually cost me £18, plus RM contributions of £60 per week.
Still well worth paying in!