Any Pensions experts on here???

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230K

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Hi

As the title any pension experts on here that could give me a heads up on my current situation.

Basically I joined our company final salary non-contributory pension scheme in 1995, everything was fine until 2003 when I was asked to contribute 6% to retire at 60, if i didn't my normal retirement age would increase to 65. I paid the 6% until 2009 when we were asked to contribute a further 6% to retire at 60 as before.

I agreed to pay the extra 6% meaning I now pay a total of 12%, remember this was a non contributory scheme.

Then the sting came, our 2010, 2011 & 2012 pay rises were non pensionable and the word is that future rises may continue as non pensionable. Meaning that when I retire in 2030 that my final salary could be my 2009 salary.

Years ago when i started working I wanted to start a private scheme of my own but was told I couldn't because I was in a company scheme so by being in this scheme i was denied the chance of having my own private scheme.

If my pensionable salary doesn't increase from 2009-2030 then in my opinion my pension has been halved.

I am sure what our company is doing will be legal but would welcome others thoughts by PM or whatever.

Thanks,

230K
 
Sorry I can't help with a constructive answer, but good luck.

This pension thing has become a bit of a racket, so many (intelligent and careful) people I know have been caught.
 
Will they give you a transfer value and do you have the time/inclination to do your own planning on a monthly basis?
 
The key question, I think, is whether you are paying 12% of your total salary, or it excludes the pay rises.

Logically it should be the latter, in which case you are able to make your own arrangements for that part of your salary. Unfortunately, you are likely to discover that contributing 12% doesn't come close to enabling you to retire at 60 on half salary, if that is the promise of your company scheme. So I would say be glad that part of your salary is covered by what is called a defined-benefits scheme, because it's a hard, cold world trying to fund your own pension.

People who know more will hopefully be along to advise.

Jon
 
You need to contact the Trustees for the scheme, via the secretary to the Trustees. Ask for your questions to be raised at the next Trustees meeting. Also ask for a copy of the rules of the scheme to study them. Ask for a transfer value estimate, which should be at no cost to you. Engage an independent financial advisor. The members of the scheme should have been given full information and options and implications of all the changes before they occurred and ideally been consulted on them first. Your concerns are valid and need answers. The Trustees run the scheme independently of the company and are liable for breaches of the rules and protocols. Good luck with it. You could contact the Pensions Ombudsman too and the Pensions Regulator if necessary re any breaches.
 
It is highly unlikely (but not impossible) that transferring out would be a sensible option (unless the scheme is grossly underfunded - and your employer is going to the wall!!). They will undoubtedly be paying at least the same as you into the scheme....

regrettably what they are doing is legal - and in some ways, in this economic climate - totally understandable. It is not pension schemes that are the problem - it is the cost of providing a pension now, with increased longevity having a huge impact, and this being exacerbated by reduced (even negative) investment returns, reduced tax breaks (thanks Gordon!!) and much lower gilt yields. 20 years ago £10,000pa pension would have cost around £90,000 at 65 - now, with indexation that same pension would cost around £250,000... theres the problem!

You can these days put money into a private fund as well as being in a company scheme - subject to total annual input limits....
 
How big a contribution has your company made over the years?

They may not have paid anything if you had taken out a "private" scheme
 

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