Final Salary Pensions / Deficits / Benefits (long post)

[bobmcfc]

So I have a question

My husband had a pension at work where he pays in and so does his employer. Anyway it was with standard life. Anyway I really don’t have a clue with pensions but they changed his pension to equitable life a few years ago and now looking thorough statements, his old pension pot is just sat their doing frigg all ! It’s worth around 35k right now but it’s just sat there !!

When it changed I just thought it would transfer but it seems we’re starting again.

What are our options ? Can we ask for it to be transferred to equitable life ? I really haven’t a clue

 

[SWP's back]

So I have a question

My husband had a pension at work where he pays in and so does his employer. Anyway it was with standard life. Anyway I really don’t have a clue with pensions but they changed his pension to equitable life a few years ago and now looking thorough statements, his old pension pot is just sat their doing frigg all ! It’s worth around 35k right now but it’s just sat there !!

When it changed I just thought it would transfer but it seems we’re starting again.

What are our options ? Can we ask for it to be transferred to equitable life ? I really haven’t a clue

So you need to know if it’s a defined benefit (final salary) or defined contribution (money purchase) scheme.

If it’s a DC scheme then it continues to be invested and rise and fall with the markets and you may have some small investment choice (in terms of fund choice).

If it’s a DV scheme then that’s the nominal transfer value and you should also be able to get an annuity value (how much it will be worth each year in terms of income).

 

[bobmcfc]

So you need to know if it’s a defined benefit (final salary) or defined contribution (money purchase) scheme.

If it’s a DC scheme then it continues to be invested and rise and fall with the markets and you may have some small investment choice (in terms of fund choice).

If it’s a DV scheme then that’s the nominal transfer value and you should also be able to get an annuity value (how much it will be worth each year in terms of income).

If I tell you the name of the plans would you know if it’s one of those ?

It was a standard life stock exchange pension fund
Then it changed into a standard life passive plus IV pension fund

Now it seems well to be quite honest I’m not sure what the equitable life plan is. It says unit linked with profits fund from 2012. He’s been contributing to his pension since 97/98 when he was 18

hes going to be on the phone tomorrow finding out what’s what and with who. I’m inclined to say DC because he contributes a % and his employers do every month

 

[Blue Maverick]

Thanks for the answers guys much appreciated

 

[Paladin]

Thank you so much for offering your expertise, free of charge. It is a complicated area.

I fit your example to a tee. Age 56 with 30 years of a final salary scheme resulting in 30/60ths. Unfortunately, not on £60k though. I then have 8 years in a DC scheme. I hope to retire in around four years.

My firm (utility, formerly public sector) has run my scheme very well. It is in deficit though, and we are currently going through reform. I’m so close to retirement that whatever changes are implemented will have little impact on me thankfully.

 

[SWP's back]

If your employer offers a you money-purchase (aka defined contribution) pension where they the employer are going to put a significant chunk of your salary into it, then in the vast majority of cases, you'd be daft to say no thanks. Surely you can agree with that so we are not giving people duff or misleading advice on this very helpful thread?

I am concerned that people will read the various posts on here and conclude that they want no part in a company pension because of the horror stories like Corillion. These problems do not exist with defined contribution schemes where all of the benefits describe in your opening posts are usually available, but with the added benefit of free money from your employer.

Yes totally agree.

But my thread is about DB schemes and letting people know some of the pros and cons of such schemes.

If your employer is happy to contribute to a DC scheme then there’s very little risk in doing so as you will usually double or treble your money on day one.

I have, at no point, given “duff or misleading advice” and I find it rather offensive that you even suggest such a thing.

My thread is about DB schemes as stated in the title so I don’t know why you keep talking about DC schemes. It’s like a thread on Ederson and some bloke keep going on about him not being great as his goals scored per game record is wank. They are totally different subjects.

 

[west didsblue]

I’m in a DB scheme based on a retirement age of 65, however it can be drawn from 55 with penalties or 62 without penalties. Are the trustees within their rights to change the rules to impose penalties at 62-65? There’s already other changes being implemented for those taking redundancy between 55 and 60.

 

[SWP's back]

If I tell you the name of the plans would you know if it’s one of those ?

It was a standard life stock exchange pension fund
Then it changed into a standard life passive plus IV pension fund

Now it seems well to be quite honest I’m not sure what the equitable life plan is. It says unit linked with profits fund from 2012. He’s been contributing to his pension since 97/98 when he was 18

hes going to be on the phone tomorrow finding out what’s what and with who. I’m inclined to say DC because he contributes a % and his employers do every month

Thank you so much for offering your expertise, free of charge. It is a complicated area.

I fit your example to a tee. Age 56 with 30 years of a final salary scheme resulting in 30/60ths. Unfortunately, not on £60k though. I then have 8 years in a DC scheme. I hope to retire in around four years.

My firm (utility, formerly public sector) has run my scheme very well. It is in deficit though, and we are currently going through reform. I’m so close to retirement that whatever changes are implemented will have little impact on me thankfully.

I’ll message you both tomorrow in pm if that’s ok.

I’m off to bed now.

 

[bobmcfc]

I’ll message you both tomorrow in pm if that’s ok.

I’m off to bed now.

Cheers and thanks so much. To add I wonder if the equitable life “with profits” pension sounds risky

 

[SWP's back]

Are the trustees within their rights to change the rules to impose penalties at 62-65?

If the scheme’s in trouble then they are, yes. But it’s not a standard course of action.

It’s one of the reasons why getting a full breakdown of the scheme, it’s value, it’s funding position an everything else should be taken on an annual or biannual basis. It’s free of charge and a right of every scheme member.