New Actuarial Factors for C, N, DSL and I Plan pensions
The factors used in pension calculations are regularly reviewed by the Trustee’s advisers. They make certain assumptions about the future, particularly in relation to longevity and investment returns to assess how long a pension may be payable and the cost of providing it.
Following a recent review, some factors will be changed with effect from September 2011. The final outcome is not yet known but it is likely that for all plans:
• The cash commutation factors will increase which means you will give up less pension if you choose to take a cash lump sum
• The factors that are used to convert ASC/AVC funds to pension will be increased, which will mean those funds will buy less pension. If you are planning to use your ASC/AVCs to provide up to the maximum tax-free lump sum available, the factor change will only affect any fund that is not used to provide the lump sum.
• The factors used to calculate transfer values will also change and the impact will differ from plan to plan.
In addition for C and N Plan:
• The Cost Neutral Early Retirement Discount Factor (ERDF) applied to your pension will reduce. This means that the reduction applied to your pension for taking it early will be lower so you will receive a higher pension.
The ERDF for I Plan is currently under discussion and details will be made available once finalised.
Below is a comparison of the 'before and after' position of the cash commutation and ASC/AVC conversion factors (it is not possible to provide a similar comparison of the change in cost neutral ERDFs or transfer value factors as there are many different elements which contribute to the overall effect of this change).
All factors (except the cash commutation factors) are market-related and change on a monthly basis - the factors below reflect the current market position.
If you have any queries, please contact Pension Services by sending an email to pensions@uk.ibm.com.
David Newman
Pensions Trust Manager
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Downloads
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| File | Size | Uploaded | Link |
|---|---|---|---|
 C and N Plan Comparative Cash Commutation Factors |
10.95KB | 2011-07-29 | Download |
| I Plan Comparative Cash Commutation Factors |
10.64KB | 2011-07-29 | Download |
| DSL Comparative Cash Commutation Factors |
10.81KB | 2011-07-29 | Download |
| C, N and DSL Comparative ASC/AVC Factors |
11.84KB | 2011-07-29 | Download |
| I Plan Comparative ASC/AVC Factors |
12.03KB | 2011-07-29 | Download |
Last Updated: 03/10/2011
