Final Salary Pension

mazzybabe

I have a final salary pension which has been frozen for 6 years and which I paid into for 14 years. I am 52 years old and have contacted the pension company with regards to taking early retirement pension but I have been informed that the account has protected rights and there isn't enough in the fund to take early retirement pension. I have been informed that the transfer value is currently approx £40K but should have been £54K but there is a deficit. Anyone got any advice on how to access this or should I sit tight?
Just worried that it won't be worth anything in a few years. Any advice welcome.

tawl_2

i believe trustees can refuse early retirement if the guaranteed minimum pension part of your pension isn't cover by the reduced pension when you ask for early retirement. the reduction in the transfer value isn't uncommon. some schemes do this to protect the remaining members in the scheme.

the reduction in the transfer value isn't permanent. if things improve, trustees can decide to start providing full unreduced transfer value.

Just worried that it won't be worth anything in a few years. Any advice welcome.

I wouldn't worry just yet! There should be a plan in place to remove any funding deficit from the scheme and The Pensions Regulator is overseeing that this is done appropriately. That doesn't say that things can go wrong like the employer going bust but then there's always the Pension Protection Fund if this ever happens.

if you don't need the income yet, you can always sit tight and wait for full transfer values and/or a higher early retirement pension as you get older (as the reduction should then be less and hence early retirement may then be possible).

hope this helps.