Is section B better than C?

[Jefferson Starfish]

Following on from a post on another thread, which section is it better to be in, B or C? And why?

Thanks in advance.

[david3595]

Following on from a post on another thread, which section is it better to be in, B or C? And why?

Thanks in advance.

I started 1 week after Section C commenced in 1987 and the difference in my NRA60 @55 Lump Sum quote than that of 1 Of my colleagues who started 3 years earlier was about £12,000 . Possibly those extra 3 years contributions he made did allow for most of the difference but I don’t believe there was much between the yearly pension if I left the business as I would get a supplement until state pension age and he receives without a supplement

[freespeech]

Following on from a post on another thread, which section is it better to be in, B or C? And why?

Thanks in advance.

I started 1 week after Section C commenced in 1987 and the difference in my NRA60 @55 Lump Sum quote than that of 1 Of my colleagues who started 3 years earlier was about £12,000 . Possibly those extra 3 years contributions he made did allow for most of the difference but I don’t believe there was much between the yearly pension if I left the business as I would get a supplement until state pension age and he receives without a supplement

Sections A/B still have the final salary link so increases since 2008 will still flow through.

[NorthernBoy]

Everyone used to say that section B was better because you got an automatic lump sum.

However was the accrual rate 1/80, in B, compared to 1/60 in C?

Both decent schemes in my opinion.

[renrag40]

There isn’t that much between the 2 pensions. Especially if you factor in that members in Section B pay about 20% (and by extension RM as well) more in contributions than members in Section C.

[freespeech]

There isn’t that much between the 2 pensions. Especially if you factor in that members in Section B pay about 20% (and by extension RM as well) more in contributions than members in Section C.

Although, in pension terms, more in often means more out (as an overall %). I take the simplistic views that most employers tend to worsen their schemes at every iteration. Is that not the case?

[renrag40]

You are spot on with that view freespeech. Every change that I have seen to the pension has reduced the benefits to the members....... namely
1987... closing of Section B to new members and the setting up of Section C.
2008... closing to the members of further accrual to the DB schemes.
2010... moving from nra 60 to nra 65.
2014... dropping of the link of pensionable pay to actual pay and moving instead to pensionable pay in 2014 + RPI.
2018... closing of the Career average pension scheme.
The problems with pensions is that it is only a promise until you are actually receiving it.
When I look back to when I started in 1985 to what I was promised then as a pension to what it is 35 years later I cannot help but feel that my employer has broken that promise on 5 occasions.

[freespeech]

You are spot on with that view freespeech. Every change that I have seen to the pension has reduced the benefits to the members....... namely
1987... closing of Section B to new members and the setting up of Section C.
2008... closing to the members of further accrual to the DB schemes.
2010... moving from nra 60 to nra 65.
2014... dropping of the link of pensionable pay to actual pay and moving instead to pensionable pay in 2014 + RPI.
2018... closing of the Career average pension scheme.
The problems with pensions is that it is only a promise until you are actually receiving it.
When I look back to when I started in 1985 to what I was promised then as a pension to what it is 35 years later I cannot help but feel that my employer has broken that promise on 5 occasions.

If I've worked out my NRA65 benefits correctly they are only 40% of what was shown in the 2016 statement when NRA60 and 65 were listed separately.

[RobertT]

If I've worked out my NRA65 benefits correctly they are only 40% of what was shown in the 2016 statement when NRA60 and 65 were listed separately.

I don't know how old you are, but 2016 was the last year the annual illustrations were based on what you can expect to get at 65 if you worked until that age.
Since then they've been based on what they're worth 'today', or more specifically 31st March of that year.

in practice nobody will have more than 8 years worth of NRA65 benefits, not including the DBCBS. So if potentially you have more than 8 years RM service from 2010 to age 65, it's fairly obvious that more recent illustrations are going to show a lower figure.

[freespeech]

If I've worked out my NRA65 benefits correctly they are only 40% of what was shown in the 2016 statement when NRA60 and 65 were listed separately.

I don't know how old you are, but 2016 was the last year the annual illustrations were based on what you can expect to get at 65 if you worked until that age.
Since then they've been based on what they're worth 'today', or more specifically 31st March of that year.

in practice nobody will have more than 8 years worth of NRA65 benefits, not including the DBCBS. So if potentially you have more than 8 years RM service from 2010 to age 65, it's fairly obvious that more recent illustrations are going to show a lower figure.

Great insight as ever Robert T. Thanks.

I'm 54....pleased it is the reason you have given and not due to a "loss" in the change in the scheme was it 2014? I seem to recall some figures around 20% in some circumstances.

[RobertT]

If I've worked out my NRA65 benefits correctly they are only 40% of what was shown in the 2016 statement when NRA60 and 65 were listed separately.

I don't know how old you are, but 2016 was the last year the annual illustrations were based on what you can expect to get at 65 if you worked until that age.
Since then they've been based on what they're worth 'today', or more specifically 31st March of that year.

in practice nobody will have more than 8 years worth of NRA65 benefits, not including the DBCBS. So if potentially you have more than 8 years RM service from 2010 to age 65, it's fairly obvious that more recent illustrations are going to show a lower figure.

Great insight as ever Robert T. Thanks.

I'm 54....pleased it is the reason you have given and not due to a "loss" in the change in the scheme was it 2014? I seem to recall some figures around 20% in some circumstances.

It's definitely the reason!

Had the CSDB scheme stayed open and I'd worked for RM until 65, I'd have about 23 years worth of NRA65 pension. As it is I've only got 8.

So in simple terms, mine is about 65% less than it could have been at 65. Although factoring in pay rises over those 15 years, that percentage should be higher.

How the 2014 changes actually affect our pensions will depend on inflation over the course of time, which is something nobody really knows too far into the future.