I'm so confused!!

jem16

atush wrote: »

If you have the choice between 5 and 9%, that extra 4 % is buying something. added years or AVCsm not sure.

The difference will be a better accrual rate. The OP mentions 1/67th. The 5% contribution will probably be a 1/80th.

atush

Ok, so it is worth paying then. Added years in a way.

stephga23

Of course they let me back in!!! I'm brilliant and worth it ha!!!

I'm saving hard (even harder after my holidays) and thanks again to everyone for your replies

Neverland

atush wrote: »

As a contrast, you would not have had to worry abt the DB pension as it would not have been you choosing funds or taking any risk- all investment risk in a DB scheme lies with the employer.

A defined benefit scheme isn't that great, how many companies have lasted less than 40 years of employment plus twenty years of retirement?

Once you have built up entitlements to a decent level of pension in a private DB scheme it isn't underwritten by the government

Even with a civil service pension scheme you are still liable for the employer changing the terms (e.g. lower accrual rates, higher contribution, RPI -> CPI) half way through

No pension is going to be no risk

mgdavid

Neverland wrote: »

A defined benefit scheme isn't that great, how many companies have lasted less than 40 years of employment plus twenty years of retirement?

Once you have built up entitlements to a decent level of pension in a private DB scheme it isn't underwritten by the government

Even with a civil service pension scheme you are still liable for the employer changing the terms (e.g. lower accrual rates, higher contribution, RPI -> CPI) half way through

No pension is going to be no risk

completely disagree; a DB scheme is for 'normal folk' always going to be best value compared to anything you could arrange for yourself.
DB schemes by their very nature tend to be found in blue-chip companies who usually do have a long history, a good heritage, a longterm viable business model and every chance of being around in 40 or 50 years time. (and if the company isn't the pension scheme will, as Jamesd explains...)

jamesd

I wasn't able to find much, not really any more than you've been able to say with your later posts. You're fortunate that they did let you in. Your pension is protected by going into a pot of money managed by trustees and not owned by the company, regulated by an active regulator which requires companies to catch up on deficits and then even if that fails, by the Pension Protection Fund that will pay at least 90% of the pension value. The company going bust wouldn't hurt you by more than that and even that much isn't very likely these days. If already retired it'd be 100% instead unless you're a high earner and in line for a pension in the £30,000 sort of range.

One of the big benefits is that the pension and company pick up the risk of retirees living longer. That's why your employer says they stopped letting new employees joining this scheme and switched to defined contributions for new employees.

atush

Neverland wrote: »

A defined benefit scheme isn't that great, how many companies have lasted less than 40 years of employment plus twenty years of retirement?

Once you have built up entitlements to a decent level of pension in a private DB scheme it isn't underwritten by the government

Even with a civil service pension scheme you are still liable for the employer changing the terms (e.g. lower accrual rates, higher contribution, RPI -> CPI) half way through

No pension is going to be no risk

I am guessing you haven't heard about the Pension Protection Fund which underwrites such schemes? And if they fail (ie the business fails), the pensioners do receive a pension (reduced by 10% I beleive and with lower indexing) but still better than money purchase.