How is a DC pension in payment protected?

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soulsaver
soulsaver Posts: 5,976 Forumite
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in Pensions, annuities & retirement planning
Simple enough question: I have a DC pension 'guaranteed' for the next 20 years (in exchange for a reduction in rate) - i.e. if I die tomorrow it carries on being paid to the spouse /nominated beneficiary for the balance of the 20 years.

In the hopefully unlikely event that the company can't pay, how, if at all, is it protected?

Is there a difference in the protection if I'm alive or passed?
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  • dunstonh
    dunstonh Posts: 116,379 Forumite
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    I have a DC pension 'guaranteed' for the next 20 years (in exchange for a reduction in rate) - i.e. if I die tomorrow it carries on being paid to the spouse /nominated beneficiary for the balance of the 20 years.

    is this a scheme pension or an annuity?
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • soulsaver
    soulsaver Posts: 5,976 Forumite
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    dunstonh wrote: »
    is this a scheme pension or an annuity?

    It's a Pension Annuity: An annuity bought from funds generated in the first instance in a DB scheme, transferred to a DC scheme (30 years ago) and used to for what L&G call a Pension Annuity.
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  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    edited 19 June 2017 at 1:20PM
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    Your first protection is the insurance company and it's financial solvency. I have a guaranteed deferred annuity with TIAA-CREF in the USA. I'm not worried about it because TIAA-CREF has a A++ rating. I imagine there is some government insurance scheme too....others will be able to describe that if it exists.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • dunstonh
    dunstonh Posts: 116,379 Forumite
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    soulsaver wrote: »
    It's a Pension Annuity: An annuity bought from funds generated in the first instance in a DB scheme, transferred to a DC scheme (30 years ago) and used to for what L&G call a Pension Annuity.

    Annuities have 100% FSCS protection with no upper limit.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • soulsaver
    soulsaver Posts: 5,976 Forumite
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    edited 19 June 2017 at 2:27PM
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    dunstonh wrote: »
    Annuities have 100% FSCS protection with no upper limit.

    Many thanks, Dunstonh. :thumbs up: http://static.moneysavingexpert.com/images/forum_style_1/icons/icon14.gif
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