Introduction
The Pension Audit Report should only be used for a Defined Benefit (final salary) pension scheme. If the pensionholder is a police officer, fire & rescue services, armed forces or prison officer 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 esamples are Defined Benefit schemes available for the public and private sectors showing different cases of age, earnings, years in scheme.


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 examples of valuations 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.

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

New public sector 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 table gives examples of valuations 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.

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 table gives examples of valuations 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.

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 gives examples of valuations 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.

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