Can the trustees do this

chesky369

Query about my pension which I’ve only just noticed. Joined the company DB scheme when it started (1988) having been employed many years before that. In 1995, the company felt guilty about not having made pension provision previously and said it would pay my contributions. I was issued with an ‘explanatory booklet for non contributory members’ in 1998 which stated ‘you are not required to contribute to the scheme’.

In 2003 I was told in writing that ‘the concession under which your contributions have been subsidized since 1995 should cease’. Which they did.

I never thought about it until now, but could the Trustees do this?

Debt_Free_Chick

chesky369 wrote:

Query about my pension which I’ve only just noticed. Joined the company DB scheme when it started (1988) having been employed many years before that. In 1995, the company felt guilty about not having made pension provision previously and said it would pay my contributions.

So it looks like the company decided to subsidise your contributions. Which would be right - the trustees can't decide to spend the pension scheme assets to save a member from paying what he was required to.

I was issued with an ‘explanatory booklet for non contributory members’ in 1998 which stated ‘you are not required to contribute to the scheme’.

It looks like there was a special category of members who were not required to pay. Were you the only one or were there others?

In 2003 I was told in writing that ‘the concession under which your contributions have been subsidized since 1995 should cease’. Which they did.

I never thought about it until now, but could the Trustees do this?

Who told you that the concession was ceasing - the company or the trustees? Again, it would be unusual for the trustees to decide what contributions the members pay. The trustees normally decide on the total contributions to be paid (on advice of the actuary and in consultation with the company), but it's the company who decides what the members pay.

The company can normally vary any of the terms for future service e.g. pension accrual rate, members' contributions, normal retirement age etc.

If the company did vary your requirement to contribute, then the trustees would have no grounds to refuse. It's the company that decides on what the members pay.

So ... in conclusion - yes, the trustees could and probably did agree to a change in members' contributions - but at the company's request.

Bogof_Babe

A vaguely related question - my (ex)-company pension scheme when I joined said that women could retire and draw their pension at age 60. Several years ago (before the Government standardised pension age to 65) the company imposed on women within a certain number of years of retirement a revised pensionable age of 65. I fell within this bracket. There was no phasing in, so suddenly I found I had to wait another five years before drawing the pension that I had accrued over about 20 years.

I emailed Working Lunch prior to their Pensions phone-in about a year ago, but heard nothing from them, so I assume this might be some sort of hot potato.

I appreciate that it is probably far too late to query now, and I haven't worked there for over three years anyway (but have another 11 years to await my pension, not the six I'd planned for ) but can anyone confirm that the company was within its rights, as that would at least put my mind at rest.

Debt_Free_Chick

Bogof_Babe wrote:

I appreciate that it is probably far too late to query now, and I haven't worked there for over three years anyway (but have another 11 years to await my pension, not the six I'd planned for ) but can anyone confirm that the company was within its rights, as that would at least put my mind at rest.

Yes - worse still, employers were forced to equalise pension ages by a European Court Judgment (Barber).

However, you have a number of years that built up before the change. Your pension for those years is still payable "normally" at 60. If you retired at 60 you would get the pension for the years before the change paid in full, and the pension for the years after the change reduced for early payment.

You are not "forced" to retire at 65 - you can still retire at 60, but part of your pension will be reduced. The part that's reduced is the amount that built up after the company changed the normal retirement age.

HTH

Bogof_Babe

Thanks so much DFC (apologies, I forgot until now that I'd posted this last night ). That is extremely interesting. Now if only I can track down any remaining Trustees of our scheme (the company was bought out two years ago, and the pension scheme went with it) I will enquire about the pension accrued before the age changeover. There should be about 15 years worth that I should receive at 60, unless they can wriggle out of it in some way.

Many thanks for your advice. If it wasn't for people like you, we'd all be floundering around in the dark. :A

Pal

Unfortunately most occupational schemes do not allow people to split their pensions at different dates. So you will probably have a choice:

- Take your entire pension at 60. The pension earned after the retirement age change will be reduced for early payment. The pension earned before that date will not be reduced;

OR

- Take your entire pension at 65. The pension earned after the retirement age change will NOT be reduced for early payment. The pension earned before that date will be INCREASED to reflect the fact that it is being paid late.

Suggest you contact the current administrators of the scheme and ask them for a quote at 60 and 65, then you can make a decision.

Debt_Free_Chick

Thanks Pal - my original post did not make it clear.

Of course, after 6 April, Simplification will allow Trustees to offer a "split" pension so that members can choose to take only part of their pension at one date (e.g. age 60) and the rest at a later date.

Unfortunately, whilst the Simplification (tax rules) will allow it, the Preservation (DWP) rules make it extremely difficult and ... complex to achieve in practice!

No joined up policy on pensions !!!