Pension Cash Equivalent Transfer Value Calculator

Calculator Inputs

Enter assumptions for a survival weighted present value estimate.

Annual pension now

Current annual deferred pension amount.

Current age

Age today.

Retirement age

Chosen pension start age.

Deferment growth rate (%)

Annual growth before retirement.

Discount rate (%)

Present value discount assumption.

Pension escalation rate (%)

Annual increase after retirement.

Member payment years

Expected payment horizon after retirement.

Annual mortality rate (%)

Simplified annual probability of death.

Spouse pension (%)

Continuation share after death.

Spouse payment years

Expected spouse payment horizon.

Retirement lump sum

One time amount at retirement.

Transfer adjustment (%)

Scheme or market adjustment.

Admin expense

Fixed deduction from the estimate.

Reset

Example Data Table

Use this sample scenario to test the calculator quickly.

Input	Example Value	Meaning
Annual pension now	18,000.00	Current deferred annual pension.
Current age	50	Age today.
Retirement age	65	Pension start age.
Deferment growth rate	2.00%	Growth before retirement.
Discount rate	4.50%	Present value assumption.
Escalation rate	2.00%	Annual pension increases.
Member payment years	24	Expected payment horizon.
Annual mortality rate	2.50%	Probability model input.
Spouse pension	50.00%	Continuation share.
Spouse payment years	12	Expected spouse horizon.
Retirement lump sum	35,000.00	One time retirement payment.
Transfer adjustment	5.00%	Scheme or market uplift.
Admin expense	1,500.00	Fixed deduction.
Estimated net CETV	221,760.76	Result from this example setup.

Formula Used

1) Pension at retirement
Pension at retirement = Annual pension now × (1 + deferment rate)^{years to retirement}

2) Member present value at retirement
PV member = Σ [ Pension at retirement × (1 + escalation rate)^t-1 × survival rate^t-1 ÷ (1 + discount rate)^t ]

3) Spouse present value at retirement
PV spouse = Σ expected spouse cash flow in each year ÷ (1 + discount rate)^year
Death probability in year d = survival rate^d-1 × mortality rate

4) Present value now
Present value now = (PV member + PV spouse + retirement lump sum) ÷ (1 + discount rate)^{years to retirement}

5) Net estimate
Net CETV = [Present value now × (1 + transfer adjustment)] − admin expense

This model uses an expected value approach. It simplifies mortality, timing, escalation, and spouse continuation into annual steps for fast comparison.

How to Use This Calculator

Enter the current annual pension amount.
Set current age and expected retirement age.
Choose deferment, discount, and escalation assumptions.
Enter member years, mortality, spouse share, and spouse years.
Add any retirement lump sum, adjustment, and expense.
Press calculate to see the estimated transfer value.
Review the chart, summary metrics, and export files.

Frequently Asked Questions

1) What does this calculator estimate?

It estimates a deferred pension’s present value using discounting, survival probability, escalation, spouse benefits, and adjustments. It helps compare assumption sets consistently.

2) Will this match an official provider quote?

No. Providers use scheme rules, yields, member data, funding levels, and pricing methods. This calculator gives an educational estimate, so official offers can differ materially.

3) Which input changes usually matter most?

Discount rate changes usually have the biggest effect. Higher discount rates reduce present value. Lower discount rates increase present value because future payments are discounted less aggressively.

4) Why does escalation increase the result?

Escalation increases later payments, so it often raises the transfer value. The effect is larger when payment periods are long and discount rates are relatively low.

5) How does the spouse pension affect CETV?

The spouse percentage models ongoing income after member death. Larger continuation percentages and longer spouse payment periods usually increase the estimated transfer value.

6) What does deferment growth do?

Deferment growth increases the projected pension at retirement. If retirement is many years away, even small growth assumptions can meaningfully change the present value.

7) How can I build a conservative scenario?

Use higher discount rates, shorter payment periods, lower escalation, and smaller spouse benefits. Then compare them with more generous assumptions to see the range.

8) Should I use this result for a transfer decision?

No. A transfer decision can affect guarantees, inflation protection, tax outcomes, and survivor income. Use this estimate as a planning aid before seeking professional advice.