pension ? what is my option

geelamch

hi,
I have been in a final salary scheme for 18 yrs and transferred a previous pension which gave me 12 bonus years.(they still allowed transfers then ,but not anymore)
I earn £36642 which is part of a 2/3 scheme. joint contributions from my employer and self are £164 weekly ,£20 of this is avc which i have done for around ten years ( this has a pot of around £17000 ).
I am allowed to be a memeber for forty years and my membership now equates to thirty years.
So my query is this

What will happen after the forty years as i will only be 54.
(enjoy work and dont have great desire to give it up )

Do i still have to contribute

If i am not allowed to contribute can i have another pension and if so can i still recieve any contributions from employer or tax break.

I appreciate this may be complicated as I dont have a lot of insight myself but i would like to be forewarned of any pitfalls and anything i would have to start thinking about before speaking to provider.

thanks for reading

Batchy

I am pretty sure, but would speak to an expert.

If you want to contribute to a personal pension of your own, you can do that now, and even after you have reached 40 years in the other scheme.

As for whether or not your employer MUST contribute to a scheme then I would have thought NOT, but if it decides it wants to help you further still, then of course yes, its all part of your remuneration package at the end of the day. Does it want to motivate you or not, but I wouldnt bank on it, final salary schemes are VERY expensive for employers, and they wont be rushing to pay out further benefits to you.

Well done anyway, you have plenty to look forward to in the future, I would pay into your AVCs so you can max the tax free 25% payout from the scheme, without effecting the final salary pension scheme pot of entitlements and RPI increases.

I am not a financial advisor... please do not rely on this advice... :-)

ColinJS

Hi
I would definitely speak to the Trustees of the pension scheme to enquire whether the scheme rules have changed and you can continue to accrue rights beyond 40 years of service (as the pension rules have now changed substantially since you joined the scheme). Not all pension schemes operate the same rules about service so it is difficult to comment, but I cannot imagine they could possibly force you to cease pensionable service (otherwise why transfer in other benefits if it is only going to shorten the period of service you are credited with???).

I'd speak to your HR department and get some answers if I were you.

MikeJones_2

Hi Batchy,

Batchy wrote: »

...its all part of your remuneration package at the end of the day.

I often wonder about this. In fact, in European Law 'pensions' have been decreed as 'deferred pay'. But I'm not so sure that that relates to the actual amount ('contribution') paid into the pension.

Pedantic as though this may seem, it is in fact important. The reality of the matter is that as far as I know, this has not actually been put to the test in the UK Courts.

If pension contributions are indeed part of remuneration, then whenever a defined benefit scheme closes and employees are offered a money purchase alternative, or no alternative at all - aren't the employees simply being forced to take a pay-cut, given that money purchase benefits are unlikely to provide broadly comparable benefits, all things being equal? (Rhetorical)

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.

Batchy

MikeJones wrote: »

Hi Batchy,



I often wonder about this. In fact, in European Law 'pensions' have been decreed as 'deferred pay'. But I'm not so sure that that relates to the actual amount ('contribution') paid into the pension.

Pedantic as though this may seem, it is in fact important. The reality of the matter is that as far as I know, this has not actually been put to the test in the UK Courts.

If pension contributions are indeed part of remuneration, then whenever a defined benefit scheme closes and employees are offered a money purchase alternative, or no alternative at all - aren't the employees simply being forced to take a pay-cut, given that money purchase benefits are unlikely to provide broadly comparable benefits, all things being equal? (Rhetorical)

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.

Hi Mike,

If I was in a final salary scheme, and I was offered a couple of years from retirement 10% personal pension contributions, I would tell them to stick it. Id mention the fact that the pension has been built and if they want to renumerate me effectively, then give me a payrise, to the tune of a nice %age. If they give 10% then its 10% onto the 40/60ths already built up as your pension is then based on the last couple of years of pensionable salary. So you will benefit from it for all your remaining years, and so too may your partner, etc.

The 10% into pension contributions will frankly cost them the same on an annual basis, but wont benefit you by a 1/4 as much. However pension scheme liabilities will grow, but this would not necessarily be clearly identifiable to the individual. plus you could spend the money your earning rather than never really seeing it.

No brainer really!

But definately a discussion point, between employee and individual.