What's happening to the Nortel Networks UK Pension Plan?

dapriuk

acc wrote: »

When someone with a company pension leaves that company at an age below the normal pension age and goes to a company that does not offer the option to transfer the pension in, then the pension has to be deferred.

The Pension Protection Fund compensation for a deferred pension is only up to 90%, and is further subject to a cap, as compared with 100% for a pension that has started.

From material I've seen from the PPF and the Nortel Pension trustees the cap is appplied BEFORE the 90% reduction. This doesn't make sense (why modify what you've already capped!) except that it saves the PPF money.

Just to be clear, we are being told that if your original pension entitlement was over the cap then your compensation is 90% of the PPF cap taking into account the cap actuarial table entry for you age.

MikeJones_2

Update on the Nortel pension fund situation as reported in the media:

- Nortel pension fund deficit rocks state lifeboat (The Guardian)

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

acc

Some sad news regarding the present Nortel staff in Maidenhead, Harlow and County Antrim - Nortel cuts staff without pay-off.

The administrators say the staff affected would be eligible for statutory redundancy pay through the government.

MikeJones_2

Further report in the media:

- Pension lifeboat in danger of sinking after £2bn Nortel hit (The Guardian)

Mike

acc

Members of the Nortel Networks UK Pension Trust Ltd should have received a second letter on the assessment process for formal acceptance into the Pension Protection Fund.

More information at http://www.nortelpensions.com/ and http://www.nortelpensions.com/nortel_in_administration.cfm

Arnofr

Beware many of these statements. I reached 65 in February, and I was originally quoted a pension of 29,200 p.a. I've just received a letter saying that I will only get 72% of that amount, ie 20,900. I would prefer 90% of the capped figure!

Nail_Lad

This isn't strictly pension related but as this seems to be the most 'hot' Nortel thread I'll put it here. There was a large round of UK lay-off's recently and the staff received little notice certainly not the 90 day consultation to which they are entitled. A rather flagrant violation of UK employment law and as such people's right and subsequent cost to the tax payer.

As a result various protests have ensued (media links below) but more importantly a Yahoo group has been set-up for current employee's who fear they maybe next at the hands of the Nortel E&Y axe and who need further advice on their rights and the legalities of the situation:

http://uk.groups.yahoo.com/group/nnukatrisk/ (Yahoo Group)

Media Links:
http://www.maidenhead-advertiser.co.uk/news/article-11066-video-axed-nortel-staff-protest/ (great video)

http://www.youtube.com/watch?v=iavOAlOV5e0 (London Protest Video)

http://www.dailymail.co.uk/money/article-1176691/Call-change-employers-flout-rules-axe-staff-short-notice.html (MOS article)

http://news.bbc.co.uk/1/hi/northern_ireland/8051149.stm (BBC news report on Ireland campaign)

acc

Arnofr wrote: »

Beware many of these statements. I reached 65 in February, and I was originally quoted a pension of 29,200 p.a. I've just received a letter saying that I will only get 72% of that amount, ie 20,900. I would prefer 90% of the capped figure!

That's ominous for members of the pension fund, and even more so for people like me who have yet to reach their normal pensionable age. Did you get the original quote in writing, and have you asked for or received a reason for the reduction being more than 10%?

Arnofr

I rang them to understand it better, and they sent me three pages of how the original promise was calculated, and three pages of how the reduced figure was calculated. Needless to say, I understand none of it! But there is still a 30% reduction. I need a pensions consultant - any recommendations?

acc

Arnofr wrote: »

I rang them to understand it better, and they sent me three pages of how the original promise was calculated, and three pages of how the reduced figure was calculated. Needless to say, I understand none of it! But there is still a 30% reduction. I need a pensions consultant - any recommendations?

Have you already received the pensions advice you needed on why the reduction is 30% rather than 10%, or have you tried the Pensions Advisory Service (TPAS)?