pension advice 50 this year

Melly45

I am 50 this year worked for Alcan for 18 years and prior to that the NCB.Seven years ago my Alcan factory closed and I was lucky enough to get another job with the railways ,but couldnt transfer my pension into this scheme.My NCB pension was also transferred into Alcan into what is called the British Alcan retirement Income and Life Assurance Plan where it has resided till now.
So you will all know what Im going to ask do I take pension this year or not I have been quoted the following
473 pounds a month and a 43.500 pounds lump sum or
744 pounds a month with no lump sum
Obviously I know the monthly income is taxed about a fifth I believe
most people have grabbed cash and ran is this wise or should I leave it till retirement age if I make it ,or take cash and tuck away the lump sum I must admit tempts me half I would spend on house the rest tuck away
Any thoughts
BRUCE

dunstonh

what type of pension is it?
what is the scheme retirement age?
what penalties are there for early retirement?

More questions will apply but we need the above questions answered before we know what else to ask.

Melly45

A quick reply is no money is paid into Alcan fund now as I work for Scotrail so I assume it is held with the trustees and invested ,
I believe there is 40 per cent deducted for taking at 50 .
The retirement age for scheme I dont think would be relevant as I assume I will be able to take it at any point ,of course ater this year minimum 55
Im not sure exactly what kind of pension it is but will find out

As you may realise im not that switched on as regards to my pension
for which I apoligise
I also have a railway pension on the go

dunstonh

so I assume it is held with the trustees and invested

need to know what type of pension it is. Cant go by assumptions. Invested suggests its money purchase (maybe a COMP or CIMP) but mention of trustees suggests it could be defined benefit scheme.

I believe there is 40 per cent deducted for taking at 50 .

Thats a mighty penalty.

the retirement age for scheme I dont think would be relevant as I assume I will be able to take it at any point ,of course ater this year minimum 55

it is relevant because the penalty will be applied usually on a decreasing basis to that point or maybe upto 5 years before that point.

Remember, if you commence this pension, its a once only decision. There is no going back on it later and if you pick the wrong options then its done for life. So, you need to get it right first time.

Melly45

Sorry for taking so long to reply my pension is a defined pension dont know how this ties in with long term investment,

dunstonh

Is that defined benefit or defined contribution? Sorry....

Melly45

Ill get back to you on that I take this has a big impact on final out come.
The majority of people I have spoke to so far have taken the money and run the thinking being better 10 to 15 years of some pension than passing away at an early age and getting no cash.I know this is not a practical way of thinking but as time wears on a lot of people dont make the finishing post.

Turnip_Edd

Oh to be an Actuary..LoL

Good point.. sort of reverse lotto mentality.. and not entirely unreasonable, I say!

Heavy industry, smoker, beerswiller... Vs.. Accountancy bloke, vegitarian Naturist, salad eater.

Taking pension Early/Lump or Staying the Course.

I will let you guess where MY Lotto bet would go :rolleyes:...

Taking the money, if you physically CAN'T RUN... probs a good punt!!

Turnip_Edd

BTW.. don't infer you, personally, here;).

MikeJones_2

Hi Bruce,

dunstonh wrote: »

Is that defined benefit or defined contribution? Sorry....

According to my information, the British Alcan Retirement Income and Life Assurance Plan is a defined benefit scheme, if that helps. (Source: NAPF Yearbook)

It's difficult for readers viewing your post to give you any precise way forward however, as if you've read other posts, much of what is recommended to posters on this website will depend upon the person's individual circumstances, so apologies if we can't be more focused on 'yes' / 'no' answer.

Taking account of YOUR specific situation is paramount, particularly in terms of what you have described so far. For example, we don't know about your health, your marital status, whether you have dependants, your attitude to security and risk or your financial status.

And, in terms of your preserved pension scheme, we're not familiar with what spouse's benefits are payable on death, or children's or dependants benefits, any lump sum payment on death, pension increases or ill health provision. EACH of these might be different when you change from being a preserved member to a pensioner member.

There's also the aspect of considering the security of the sponsoring employer, the demographic makeup of the scheme (i.e. is it heavily weighted towards pensioner members already, or is there a good mix of active, preserved and pensioner members?), as well as the solvency position of the pension scheme (is it in surplus or deficit?).

As I always tend to say with this type of post, you really do need to sit down with an IFA with particular experience in these matters. Is your employer offering you access to an IFA?

One thing I would say, is don't be led just by what all of your colleagues appear to be doing. People seldom have identical pensions and you should avoid drawing comparisons with colleagues whose circumstances may at first appear the same but could emerge as having significant differences.

If you've got the time, you (or your colleagues) might find this Factsheet useful, particularly the paragraphs headed: Pension Increases once your pension commences and Step-up pensions, Bridging pensions, Pension Deductions & Offsets. Most people don't have a clue about these - but they can have a dramatic effect on your retirement income under certain circumstances. See:

- Early Payment – Preserved Members of a defined benefit scheme

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.