Reducing time - affect on final salary pension

chesky369

I'm female, 63, and my final salary pension scheme allows me to retire now, if I so wanted. I would like to stay working for another couple of years, however I would like to reduce my time to a four-day week.

The scheme which I've been contributing to for the last 19 years, bases the term 'final pensionable salary' on the average of the last three years before retirement, so it looks as though this would really scupper my plans, and negate the years I've worked full-time.

The scheme was closed to new employees about five years ago and I was wondering about the possibility of voluntarily removing myself from the final salary scheme, asking to have it 'frozen' - as though I'd left the company and then start the new money-purchase scheme instead on this part-time basis.

What do you think? Would it be something the Trustees would have to decide on?

Mortgage_&_debt_free

Talk to your scheme administrators, they will be able to outline all the options for you.

Some schemes allow the better of the 3 year ave or the best single year in the past 5, etc.

Andy_L

Generally (ie your scheme may be diferant so check) when you go part time in a final salary scheme the scheme uses your full time salary rather than the pro-rata (reduced) rate & you accumulate years of service at the pro-rata rate

eg if you were on £26k pa and go 1/2 time (just to keep the numbers easy) you get paid £13k, your final salary is still based on £26k but the, eg, 2 years you do only count as 1 year for working out your 1/80ths (or 1/60ths) pension entitlement.