serps help

seaniboy

1991 contracted out of serps to Pru (18 yrs old)

where does the money come from paid to Prudential (i assume NI contibutions and were they higher contrubutions?) and because of below(works pension from 98 to date) what happens/happened to my first pension with Pru?(i have not heard from them for years)

1998 non contributary pension with work to date still running(25 yrs old able to join works pension)

so what happens with both?

Im 31 now and i really need to start understanding this!

Debt_Free_Chick

1991 contracted out of serps to Pru (18 yrs old)

where does the money come from paid to Prudential (i assume NI contibutions and were they higher contrubutions?)

Yes. Basically, whenever you paid the normal full rate of NI Contributions, the Contributions Agency (part of Inland Revenue) followed your instructions and paid some of them as a contribution to your Pru pension.

and because of below(works pension from 98 to date) what happens/happened to my first pension with Pru?(i have not heard from them for years)

Any contributions paid to the Pru pension will sit there invested in the way you chose. It sounds like no payments have been made to Pru since you joined your company pension scheme, hence you've not heard from them. You should contact Pru and ask for a statement. This should show how much has been paid in and how much it's worth. It should also give you details of the charges applied to the plan (see below).

1998 non contributary pension with work to date still running(25 yrs old able to join works pension)

Is your company scheme "contracted -out"? Check the booklet or ask the administrators. If so, then you are already paying a lower rate of NIC - therefore, there's nothing to pass on to the Pru. If you were to leave this job and get another with a pension scheme that is not contracted-out, then the payments to the Pru would start again. This is because you would be paying full rate NIC again and the Contributions Agency would follow your original instruction to make payments to the Pru. The instruction works, automatically, whenever you pay full rate NIC - unless you cancel it.

so what happens with both?

You have two pensions. One from your works scheme and one from the Pru plan.

You need to review the Pru plan though. You need to see if the charges are comparable with other pension plans, especially the low-cost Stakeholder plans where charges are capped at 1% of the value of the fund (annual charge).

And you need to review your decision to contract-out with the Pru plan. I would consider cancelling the contracting out election (ask Pru for the Form to do this). You can always change your mind later though as you get older, contracting out in this way (thru a personal plan) is less financially viable. Essentially, the amount paid by the Contributions Agency is less likely to give a good pension.

There are other considerations though - you might prefer to take the Government's money now and have it paid to your Pru plan, if you have little faith in the amount of State Pension the Gov't might pay in the future. Very complex .. you need to do more research. Have a look on this board at posts about "SERPS"

HTH

seaniboy

my pension is not contracted out its "in house" the organisation pays an outside company to run it though and no risk to me re future amounts im guarnteed the amount of i and my employer pays in and a certain percentage and hopefully more... with regards to the pru i assume then my contributions are still going there not sure, just thought i maybe never changed address with them when i moved 4 yrs ago so must call them...going to read over ur post again and again till i understand it fully....this could take some time ???

with regards to what ive just said can u direct/advisre me any further

much appricated!