Pension Gurus

Fletch

Fletch

Striker
In final salary pension scheme that have paid into since 18, so just over 30 years (full pension is 40 years service). Only small company with 10 staff and only 4 of us are in the scheme (original starters) as it was closed off to new staff about 20 year back.
Scheme works on 80ths for each year, so if retired at 60 or whatever would get 40/80 as your pension. We are protected persons under the scheme.
Company is winding up as at end March and we are all being transferred to a new company (same industry) which may take off or may well go tits up within a year, its touch and go on that.
We have been told over the past year that we have to give up our final salary pensions due to the large scheme deficit, or else this new company is a non starter for everybody. Coming out of it will trigger our pensions but we wont get full pensions just the years paid in i.e 30/80ths (i have to wait a year til i can get mine as too young).
Were being called into a meeting on tuesday to discuss this and pretty sure we will be expected to sign away our rights the following week or sooner.
its always been assumed by the managers that we will do this , question is am I missing a trick and should we be asking for something in return for doing this as in ideal world i'd want to stay in the scheme and build up my years to get the 40/80ths ? no other staff are impacted and having to change anything.
Any advice appreciated as I know will be put under pressure to sign , possibly even there and then.
 


Fletch said:
In final salary pension scheme that have paid into since 18, so just over 30 years (full pension is 40 years service). Only small company with 10 staff and only 4 of us are in the scheme (original starters) as it was closed off to new staff about 20 year back.
Scheme works on 80ths for each year, so if retired at 60 or whatever would get 40/80 as your pension. We are protected persons under the scheme.
Company is winding up as at end March and we are all being transferred to a new company (same industry) which may take off or may well go tits up within a year, its touch and go on that.
We have been told over the past year that we have to give up our final salary pensions due to the large scheme deficit, or else this new company is a non starter for everybody. Coming out of it will trigger our pensions but we wont get full pensions just the years paid in i.e 30/80ths (i have to wait a year til i can get mine as too young).
Were being called into a meeting on tuesday to discuss this and pretty sure we will be expected to sign away our rights the following week or sooner.
its always been assumed by the managers that we will do this , question is am I missing a trick and should we be asking for something in return for doing this as in ideal world i'd want to stay in the scheme and build up my years to get the 40/80ths ? no other staff are impacted and having to change anything.
Any advice appreciated as I know will be put under pressure to sign , possibly even there and then.
Click to expand...

Pm @Billy Smart's Circus - family have used him and a top bloke.
 
Don't really see what you can do if the scheme is ending unfortunately. A sweetener would be nice but suppose they don't have to offer you anything. I know it's of little help but you've done well to get 30 years in it in this day and age.
 
As i understand it, what you've accrued to date should be protected as final salary. Then future accrued years wont be, so in effect you'll sort of have 2 pension schemes. If they're trying to take away you're previously accrued benefits, tell them where to go or demand a hefty compo package.
 
Ask them what the CETV is.

Can you take it out and invest elsewhere?

Is there really any point taking a pension these days.

Our benefits were also reduced.
 
Staff in my old place got a token gesture of a sweetener. About a months pay I think, although I wasn't part of it.

In an ideal world everyone would have the opportunity of a mint pension.
 
Ask them to put £XXk into your new pension pot to kickstart it and cover what you will lose in retirement as a result of this move. Go high as they’ll whittle it down but not stupidly so. They’ll be expecting to compensate you in some way...or just ask for a payrise or something ???
 
few month back one of the directors did a slideshow to all the staff highlighting that the 4 workers still in the old final salary pension scheme were holding the company back due to the schemes deficit , the twat..

Goat Eyes said:
The fact there’s a huge deficit is the concerning part.

If the new company goes bust could you potentially end up with nowt?
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the deficit is an old npower scheme , where we were all originally employed as teenagers , should be ok i think

guess im just wary as witnessed my dad get turned over when the shipyards went tits up , he was badly advised and lost a lot of his pension, hes told me to sign nothing until i have no choice and like say one of the managers has almost took it as some personal vendetta
 
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Don't sign anything until it's been checked by someone that knows what they are talking about. There could easily be some small print that gets rid of most of your rights.
If you are concerned about the whole thing going tits up, get some advice and get it protected.
I had what I thought was a good company scheme, and it would have been if I worked until 67. However, I want to start winding down at 55. The penalties for doing that in the company scheme were huge, I've moved the whole lump sum to a private scheme, the monthly payout at 55 is double what it would have been in the company scheme.
 
Read up on the pensions protection fund/scheme.
If the scheme is being closed in effect you’d hope you’ll get some enhanced terms on whatever they are going to offer to replace it.
 
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Your pension benefits earned to date should be safe enough as it will be written under a trust.
I suspect that they will offer you a defined contribution pension scheme (investment-linked) for future benefits.
If the worst came to the worst, and the company went bust with the scheme under-funded, then it is likely that your pension will end up in the pensions protection fund (PPF).

The PPF would protect 90% of your earned up to a maximum of about £37,000 pa. While you reach the age at which you want to start your pension (any time after the age of 55), the pension will be increased by inflation (cpi) up to a maximum of 5% pa. When in payment, only the pension earned after 6th April 1997 will increase in payment by cpi max 2.5%. On your death, your surviving financial dependant will normally get a pension based on 50% of the value of yours at date of death.

Oh yes, when you decide to start your pension benefits you will have the opportunity to take a one-off tax free cash lump sum in exchange for some of your regular pension.

I hope this helps, no need to worry about your pension if it ends up in PPF.
 
Nero the dog said:
Don't sign anything until it's been checked by someone that knows what they are talking about. There could easily be some small print that gets rid of most of your rights.
If you are concerned about the whole thing going tits up, get some advice and get it protected.
I had what I thought was a good company scheme, and it would have been if I worked until 67. However, I want to start winding down at 55. The penalties for doing that in the company scheme were huge, I've moved the whole lump sum to a private scheme, the monthly payout at 55 is double what it would have been in the company scheme.
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Does your private pension increase by inflation each year, like the company scheme would? Inflation-proofing is very expensive. Especially as at 55, you were likly to be drawing your pension for about 30 years.
 

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