A hybrid of pensions and many questions?

dprovan

Hi,

I think I have reached the age where I am beginning to take more of an interest in our (my wife and I) pension arrangements and weighing up whether we are well enough positioned. In doing so, I realise how little I understand about pensions and hope some of you can help me to get a better handle on my situation:

My wife's situation is probably more straightforward:
My wife is 41. She has been enployed with the NHS continuously from the age of 21. So 20 years service. She has paid into the final salary scheme for all of this time. My wife's salary has always been realitvely good, on average higher than the average for her age. She gradually worked her way up over that 20 years from 20k to 45k. As of 2 years ago and the birth of our 3rd child she moved to part time work 21 hrs per week 3/5 of a week. So she had 18 years of full time contributions and the last 2 years of part time.

My situation is a great deal more complex:
I have worked from the age of 17 ( I am 39 now) so 22 years of making pension contributions. At the age of 17 I left the NHS scheme and took a private pension:o. I later had a successful claim back and joined the local authority pension scheme and had additional years paid back by the private pension company in compensation. I don't recall what this compensation was as the union dealt with it at the time and being younger and niaive I took it at face value. I also accrued another 6 years local authority pension from my own contributions which would be in addition to any payments made in compensation (I recently phoned them to get a handle on how it stood but they were very unhelpful). I left this scheme 10 years ago when I changed job and moved to the voluntary sector where I joined a non contributory final salary scheme:beer:. That lasted for 9 years and then following the recession the vol organisation froze the scheme and moved me to a stakeholder scheme one year ago. As part of the deal my employer agreed to pay 3x my contributions for 3 years up to a maximium of 15% of my salary so I have been paying this 5% and there are 2 more years before it reverts to a basic stakeholder pension where they match my contribution (I think).

Sorry this is soo long.

So the parts I am unsure of:
1. Given that my wife paid 18 years at full time will her pension be based on her final salary which is likely to be p/t hrs.
2. If yes to above, should she be hoping the pension changes to take an average of contributions rather than final salary?
3. Can we/should we pay more into this scheme as it is the better scheme compared to my final salary scheme.
4. Re my schemes. Am I correct in thinking that my two final salary schemes are better than the stakeholder and I should just leave the final salary schemes as they are?

I think those questions pretty much cover the areas i am unsure of. If you think there is anything else I am not thinking of or am not taking into account I would be grateful of advice.

atush

1/2- not sure she has to ask her HR dept from what I can see she gets a number of years and that should be based on a full time at her position as her years would be reduced for p/t? If not, then she should transfer into the new scheme which will be average salary based?

3- they may have an AVC scheme so ask. If not, no problem opening other personal pensions.
4-your stakeholder isn't bad (depending on the funds you choose) as you are getting 20% of salary paid in, but yes your old ones are still probably better. I would leave them.

re3. You need to look at your all over financial position from mtg/home and ISA provision as you may find that saving any addional funds into cahs and equtiy ISAs will provide you with the extra you need.

Bigmoney2

dprovan wrote: »

Hi,

I think I have reached the age where I am beginning to take more of an interest in our (my wife and I) pension arrangements and weighing up whether we are well enough positioned. In doing so, I realise how little I understand about pensions and hope some of you can help me to get a better handle on my situation:

My wife's situation is probably more straightforward:
My wife is 41. She has been enployed with the NHS continuously from the age of 21. So 20 years service. She has paid into the final salary scheme for all of this time. My wife's salary has always been realitvely good, on average higher than the average for her age. She gradually worked her way up over that 20 years from 20k to 45k. As of 2 years ago and the birth of our 3rd child she moved to part time work 21 hrs per week 3/5 of a week. So she had 18 years of full time contributions and the last 2 years of part time.

My situation is a great deal more complex:
I have worked from the age of 17 ( I am 39 now) so 22 years of making pension contributions. At the age of 17 I left the NHS scheme and took a private pension:o. I later had a successful claim back and joined the local authority pension scheme and had additional years paid back by the private pension company in compensation. I don't recall what this compensation was as the union dealt with it at the time and being younger and niaive I took it at face value. I also accrued another 6 years local authority pension from my own contributions which would be in addition to any payments made in compensation (I recently phoned them to get a handle on how it stood but they were very unhelpful). I left this scheme 10 years ago when I changed job and moved to the voluntary sector where I joined a non contributory final salary scheme:beer:. That lasted for 9 years and then following the recession the vol organisation froze the scheme and moved me to a stakeholder scheme one year ago. As part of the deal my employer agreed to pay 3x my contributions for 3 years up to a maximium of 15% of my salary so I have been paying this 5% and there are 2 more years before it reverts to a basic stakeholder pension where they match my contribution (I think).

Sorry this is soo long.

So the parts I am unsure of:
1. Given that my wife paid 18 years at full time will her pension be based on her final salary which is likely to be p/t hrs.
2. If yes to above, should she be hoping the pension changes to take an average of contributions rather than final salary?
3. Can we/should we pay more into this scheme as it is the better scheme compared to my final salary scheme.
4. Re my schemes. Am I correct in thinking that my two final salary schemes are better than the stakeholder and I should just leave the final salary schemes as they are?

I think those questions pretty much cover the areas i am unsure of. If you think there is anything else I am not thinking of or am not taking into account I would be grateful of advice.

1. The case with my final salary scheme (yours may be different) is that salary used is the FTE (full time equivalant). The part time service will give a reduction in the number of years service accrued, so 12 months at 3/5th will give 3/5th of a years service.

2. Probably not.

3. Depends on details of the (AVC?) scheme .

4. Possibly. Ask what the transfere value is, and also what the deffered pension amounts are.