Morrisons - Safeway CARE pension Scheme

Amme

Hi,

I work for Morrisons & know nothing about Pensions.
I've decided to join the "Safeway CARE Pension Scheme" as I had the option to & was told it was the better out of the 2.

I'm 34 & was thinking I might pay AVC's into this pension but I'm wondering if it would be the right decision?

So anyone who is currently in this scheme or knows anything about it any information would be of interest to me,

Thanks

jamesd

See the discussion of one of the Morrison's pensions. If that is the scheme then it would be a very bad mistake to make any AVC payments into it unless you were within a few years of retiring.

Amme

Thanks for your reply.

It's not the Morrisons one its a Safeway CARE pension scheme open to all employees that worked for Safeway before Morrisons took over.

jamesd

I couldn't find out enough about that scheme to have an opinion on it.

MrCoops

I can't decide to go for this one or the morrisons retirement saver.

Employee pays in 5% of pensionable pay per annum, but with tax relief it's 4%. The CARE pension has an accrual rate of 1.5% with benefits in a scheme year adjusted in line with RPI (capped at 2.5%). Permitted maximum is 123600 for 2010/2011 rising each year in line with RPI. Commutation rate is 11.0

Debt_Free_Chick

MrCoops wrote: »

The CARE pension has an accrual rate of 1.5% with benefits in a scheme year adjusted in line with RPI (capped at 2.5%). Permitted maximum is 123600 for 2010/2011 rising each year in line with RPI. Commutation rate is 11.0

This is the next best thing to a "Final Salary" pension scheme. You almost certainly could not get anywhere close to this level of pension in a defined contribution scheme, like the Morrisons' plan.

MrCoops

Hi thanks for your comment, yeah running the numbers it appears to be much better. My only concern is if they change the accrual rate or the revaluation rate (prior to 2006 the max was 5%) so it is less of a 'guarantee' in that regards.

xylophone

For CARE Pension Schemes see
http://www.pensionsadvisoryservice.org.uk/workplace-pension-schemes/career-average-revalued-earnings-(care)-schemes

The better of the two, it seems to me.

Debt_Free_Chick

MrCoops wrote: »

Hi thanks for your comment, yeah running the numbers it appears to be much better. My only concern is if they change the accrual rate

If they do, they can only do it for the pension you build up after the date of change.

or the revaluation rate (prior to 2006 the max was 5%) so it is less of a 'guarantee' in that regards.

Nothing in life is guaranteed It was wrong for employers and their advisers to call a final salary pension a "guarantee" as has since been proven.

Whilst inflation is still comparatively low, the upper limit for revaluation is less important. Granted, inflation is running at nearer to 3% at the moment, but in the long term .....? Well, who knows, but at least next year's pension will be linked to next year's salary.