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   Pensions Valuation
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Valuation Examples
Pension values can be
30% higher than the CETV.
  Valuation Examples  
 
Valuation reports
Valuation Reports
From only £80 you can value
a defined benefit scheme.
  Valuation Reports  
   Valuation examples
  Valuation Examples
  Introduction   Good Private scheme
  Old Public scheme   Average Private scheme
  New Public scheme   
    

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Introduction
The £80 Actuarial Report should only be used for a Defined Benefit (final salary) pension scheme. It is normally cost effective where the CETV is greater than £30,000, however, there is no reason why you should not run a valuation on pensions worth less than £30,000, other than the fact that the likely difference in values may not justify the small cost. If the pensionholder is a police officer, fire & rescue services, armed forces or prison officer a different calculation is required where an appropriate valuation of three times the CETV value is not uncommon. See an example of the uniformed services valuation.

If the pension is a money purchase scheme such as a stakeholder personal pension, the quotation from the provider will show the actual value of the pension after charges and this report cannot be used in these cases. The following are Defined Benefit schemes available for the public and private sectors showing different cases of age, earnings, years in scheme and actual valuations the Actuarial Report has produced.


Old public sector scheme
Generally this is for public service or sector employees who started before 2005. The benefits at retirement are a pension of 1/80th of final salary per year of service, plus a lump sum of 3/80th of final salary per year of service. Maximum pension after 40 years is therefore half of final salary. The tables give results from the £80 Actuarial Report and assumes the pensionholder is male, scheme retirement age is 65 and if 'In Service' remains so for 3 years after the pension valuation date.

Old Public Scheme - In Service
  Details:
Case A Case B Case C Case D
  Current age (yrs)
36 44 52 60
  Current earnings
£25,000 £30,000 £35,000 £40,000
  In scheme (yrs)
15 20 25 30
  Valuation
£62,890 £119,152 £212,076 £339,670

The table assumes the pensionholder left the sponsoring employer service from 2 years to 11 years ago for the cases shown.

Old Public Scheme - Left Service
  Details:
Case A Case B Case C Case D
  Current age (yrs)
38 46 54 62
  Last earnings
£23,000 £24,000 £25,000 £26,000
  In scheme (yrs)
15 20 25 30
  Left service (yrs)
2 5 8 11
  Valuation
£61,188 £111,303 £186,158 £285,047


New public sec
tor scheme
Generally this is for public service or sector employees who started after 2005. The benefits at retirement are a pension of 1/60th of final salary per year of service. Taking a lump sum at retirement would require commuting the pension benefit. Maximum pension after 40 years is therefore two-thirds of final salary. The tables give results from the £80 Actuarial Report and assumes the pensionholder is male, scheme retirement age is 65 and if 'In Service' remains so for 3 years after the pension valuation date.

New Public Scheme - In Service
  Details:
Case A Case B Case C Case D
  Current age (yrs)
45 50 55 60
  Current earnings
£35,000 £40,000 £45,000 £50,000
  In scheme (yrs)
2.5 2.5 2.5 2.5
  Valuation
£20,438 £27,056 £34,508 £41,342


Good private sector scheme
Generally provided by FTSE100 companies, financial services firms and similar employers. Often these schemes are only available to management and not all the employees are eligible and benefits at retirement are a pension of 1/60th of final salary per year of service. Taking a lump sum at retirement would require commuting the pension benefit. Maximum pension after 40 years is therefore two-thirds of final salary. The tables give results from the £80 Actuarial Report and assumes the pensionholder is male, time in the scheme is from 10 to 25 years, scheme retirement age is 65 and if 'In Service' remains so for 3 years after the pension valuation date.

Good Private Scheme - In Service
  Details:
Case A Case B Case C Case D
  Current age (yrs)
36 44 52 60
  Current earnings
£28,000 £35,000 £40,000 £45,000
  In scheme (yrs)
10 15 20 25
  Valuation
£56,513 £126,427 £233,561 £379,029

The table assumes the pensionholder left the sponsoring employer service from 7 years to 16 years ago for the cases shown.

Good Private Scheme - Left Service
  Details:
Case A Case B Case C Case D
  Current age (yrs)
38 46 54 62
  Last earnings
£20,000 £21,000 £22,000 £23,000
  In scheme (yrs)
10 15 20 25
  Left service (yrs)
7 10 13 16
  Valuation
£48,628 £98,782 £180,956 £284,249


Average private sector scheme
Generally provided by other employers, including many smaller firms. The benefits at retirement are a pension of 1/80th of final salary per year of service. Taking a lump sum at retirement would require commuting the pension benefit. Maximum pension after 40 years is therefore two-thirds of final salary. The tables give results from the £80 Actuarial Report and assumes the pensionholder is male, scheme retirement age is 65 and if 'In Service' remains so for 3 years after the pension valuation date.

Average Private Scheme - In Service
  Details:
Case A Case B Case C Case D
  Current age (yrs)
39 46 53 60
  Current earnings
£25,000 £29,000 £34,000 £39,000
  In scheme (yrs)
12 17 21 25
  Valuation
£48,081 £96,306 £156,456 £243,821

The table assumes the pensionholder left the sponsoring employer service from 8 years to 16 years ago for the cases shown.

Average Private Scheme - Left Service
  Details:
Case A Case B Case C Case D
  Current age (yrs)
41 48 55 62
  Last earnings
£17,000 £18,000 £19,000 £20,000
  In scheme (yrs)
12 17 21 25
  Left service (yrs)
8 10 13 16
  Valuation
£40,131 £73,461 £124,261 £184,190
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Annuity Rates
Single
  55 £4,164  
  60 £4,625  
  65 £5,370  
  70 £5,980  
Joint
  55 £3,918  
  60 £4,367  
  65 £4,895  
  70 £5,348  
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