final salary pension,state pension claw back

rtzpillar

I know I should have read the terms but I still would have joined I suppose. I just seems unfair that the government is telling people to make sure they have sufficient pension and still allowing large companies to carry out this practice. I wrote to my MP regarding this and he got a reply from the Minister for Pensions saying this allowed companies to pay out larger sums to people who take their retirement early, he clearly doesnt have a grasp of the situation. It is simply to reduce the amount that companies have to pay out to their employees when they retire.Basically, if I leave my pension in till I am 65, instead of getting say £5k pa, it will be reduced to £3.5k pa and the money purchase scheme we all had to transfer to isnt worth having even though it has been running for over 10 years.

jem16

rtzpillar wrote: »

It is simply to reduce the amount that companies have to pay out to their employees when they retire.

The other option would have been to increase your contribution rate. Would you have prefered this?

How much were you paying into the scheme?

Basically, if I leave my pension in till I am 65, instead of getting say £5k pa, it will be reduced to £3.5k pa

What would you get by taking it early at age 58 and what would that then go down to at age 65?

blindman

What about if the OP defers taking his state pension?

Will there then be no clawback?

Also IIRC his state pension will go up by a %age every year he defers.

Would this be a good way to get the best value?

Just a thought :cool:

jem16

blindman wrote: »

What about if the OP defers taking his state pension?

Will there then be no clawback?

Very unlikely.

xylophone

What about if the OP defers taking his state pension

http://www.mycompanypension.co.uk/index.php?area=forumviewthread&zs=1&ft=10 might be of interest.
http://www.theyworkforyou.com/wms/?id=2012-03-26a.99WS.0

jamesd

I expect that even when schemes can extend the higher payments beyond age 65, most won't. They won't have been collecting the higher payments into the scheme to allow them to pay for it, so they would be harming the long term stability of the scheme.

FLAPJACK

I retired at 49 (ill health....employers decision) and was awarded a full pension ( equal to what my pension would have been if I had stayed until 60).

Due to the fact that medical evidence was such that I am unable work again....let alone do the job I was doing at the time.

I was given the choice of taking the "levelling" option. It says in the rules that, if you leave before 60 then your pension income will be uneven ....being lower at the start and higher once the SP begins.
It does say to check that you have full SP entitlement.

It says that if you take the option it will cease at 65 reducing the FS income (SP takes over...net income the same....this is where you need the full SP) then at 75 your FS pension will return to what it would have been but for the levelling adjustment.

So at 75 the FS will be paid in full (including any increases that accrude in the 10 years of reduction) plus the SP which means the total net income (at 75) will be what it would have been if the LO hadn't been taken.

So from what I am reading here my scheme seems pretty generous in that once the 10 year reduction has ended the FS reverts to what it was at the outset.

The scheme rules do not mention any other "claw back" except for the LO situation.

I take it then I am in a pretty generous scheme....albeit since I have left it has closed to new joiners and is career average..