Christ. That's big pensions.
it's a curious effect of a defined benefit pension (let's say, £20k a year, index linked, plus 50% widow's pension) and very low (near zero) interest rates and bond yields, to a person aged, say, 57 and likely to be drawing it for 30 years, and his wife even longer.
If the yield was 1%, you would need a pot of £2,000,000 to bring it in just on the yield. So if you want to transfer the pension obligation to another provider, the valuation will be calculated on the estimated liability.
In fact, the calculation increases the size of the pot to allow for anticipated inflation over the anticipated life of the pensioner and the widow, and decreases it because you will notionally be giving back a bit of the capital sum with every payment, and it reduces or increases according to increase or reduction in interest rates.
Defined benefit pensions and index linking have now almost disappeared (except for Directors of large companies, and MPs). They're far too good for the common people. Pension providers hate carrying the risk of growing inflation, poor returns and improving lifespan, and will pay through the nose to get rid of it.
I don't know current annuity rates for index-linked plus widows for a person retiring at 57. But they won't be much.
Many years ago, pensions had a rule of thumb that you would earn about 10% annual pension income on the size of your fund, and would live to draw it for around around ten years. When I moved jobs to a company in Holborn, I found some old marketing handouts down the back of a drawer telling the punters that's what they'd get. The estimate ignored inflation and growth.
If you think you can do better than the annuity rates, you can take the pot and draw a bigger income, but then you own the risk that you might live too long and run out of money.
Not checked what civil servants get and the local gov one may not be exactly the same as a typical company one - better maybe.
