Defined benefit versus defined contribution pension

[DogDaysNeverEnd]

I've scoured the internet but I can't figure out how to compare a defined benefit and defined contribution pension scheme.

I've just joined the university USS pension at age 42. I have to pay about £300 per month, and I think will see £450 per year pension for each year of contributions. The current strike action is about pensions, amongst other things, so it got me wondering; how does this compare to if I was putting the same into a private pension? I don't have a choice with work, but as university pay is also not stellar I'd like to be able to compare jobs with the two different schemes to know what is a "good deal".

If anyone can shed some light I'd be most grateful.

Look into a SIPP as a top up. I wrote a really detailed post, and it's gone and I can't be bothered to rewrite it as carefully, but I think annuity rates are improving again as interest rates increase.

Employer contributions to Defined Benefit schemes are more an indicator of how much shit the scheme is in versus how generous the employer is. They aren't a barometer of how good the scheme is, the accrual rate and indexing are all you can compare to other DB schemes and see if it seems good value

The schemes would love to need a lower employer contribution as that obviously frees money up for other uses.

“Employer contributions to Defined Benefit schemes are more an indicator of how much shit the scheme is in versus how generous the employer is. They aren't a barometer of how good the scheme is, the accrual rate and indexing are all you can compare to other DB schemes and see if it seems good value”

yep

The DC bit is better than a sipp because no fees charged.

But a Sipp is advantageous because it's a trust; it doesn't form part of your estate when you die, so your heirs inherit it without tax, No IHT. As long as you have not touched the funds invested, your heirs get the lot. It's not bomb proof but properly set up, they are hard for HMRC to challenge.

This is all so complicated!

impressed with pp knowledge but still confusing!

I’m not 100% sure but I think the same is true of the USS scheme. We can only “suggest” beneficiaries on death, the trustees decide (in practice, I assume that they follow the suggestions in 99.9% cases)

Yes your additional payments into the investment builder are treated in same way as sipp tor inheritance