final salary pension being closed and deferred- what are my rights?

taktikback

for the sake of balance here -and I have every sympathy with your position, don't get me wrong. Firstly -companies were not allowed by the government, to overfund their pension schemes by more than 15% I think it was, which is why many (including mine) in the 80s/90s took payment holidays. Secondly -your company could not take out any money from the pension scheme to fund anything - that is just mis-information. Maxwell was the last person to raid a pension fund like that - he's dead and the law was changed to stop it happening again.

As many have said -striking is more likely to cost you your job as well as your pension -why would you want to do that. What you should be doing is putting pressure on to ensure the best possible deal for the replacement pension scheme in terms of salary sacrifice or employer contributions.

Yes it is a kick in the teeth, but it's the same kick in the teeth that is doing the rounds for everyone except the public sector

RichandJ

taktikback wrote: »

for the sake of balance here -and I have every sympathy with your position, don't get me wrong. Firstly -companies were not allowed by the government, to overfund their pension schemes by more than 15% I think it was, which is why many (including mine) in the 80s/90s took payment holidays. Secondly -your company could not take out any money from the pension scheme to fund anything - that is just mis-information. Maxwell was the last person to raid a pension fund like that - he's dead and the law was changed to stop it happening again.

As many have said -striking is more likely to cost you your job as well as your pension -why would you want to do that. What you should be doing is putting pressure on to ensure the best possible deal for the replacement pension scheme in terms of salary sacrifice or employer contributions.

Yes it is a kick in the teeth, but it's the same kick in the teeth that is doing the rounds for everyone except the public sector

It was 5% overfunding. Funding a scheme at a higher level than this was seen by the gov't of the day as trying to avoid/evade tax. Companies didn't just take it on themselves to take contribution holidays.

What most schemes would give to be overfunded now.

Mado

stevet wrote: »

exactly how myself and my mates at work feel

just to say the company had a 15yr payment holiday and took 26m out of the fund for investment in new plant

we have meetings with a trustee on monday and the union have a meeting next week also

thanks for all your posts and advice

Yep, that sounds familiar.
Our db pension closed a few years ago after a "consultation".

The company paying in8% is better than no contributions,so I would still take it.
The last defined benefits pension are al disappearing rapidly.

stevet_2

we were told by the pension that the lump sun was given to the company because the surplus in the fund was at such a level the goverment would claim it in tax, it happened about 13 years ago

xylophone

we were told by the pension that the lump sun was given to the company because the surplus in the fund was at such a level the goverment would claim it in tax, it happened about 13 years ago

http://www.opalliance.org.uk/decline.htm might be of interest.

stevet_2

xylophone wrote: »

http://www.opalliance.org.uk/decline.htm might be of interest.

thank you very intresting

one thing we have said is the company should return the money it had out of the pot if nothing else

no chance of that happening of course

taktikback

stevet wrote: »

we were told by the pension that the lump sun was given to the company because the surplus in the fund was at such a level the goverment would claim it in tax, it happened about 13 years ago

Which makes sense - so there was no foul play by the company -the fund offered it money back (which benefited you via investment in new plant) rather than lose it to the government to spend on who knows what.

scottiepaul

stevet wrote: »

thank you very intresting

one thing we have said is the company should return the money it had out of the pot if nothing else

no chance of that happening of course

Why would you want the Company to return £26m back to the Scheme?!?!

Firstly, it wouldn't increase your benefits in anyway (which are fixed and guaranteed - other than the rises in line with inflataion or whatever other rate the Scheme Rules apply for revaluation) - all it would do would be increase the surplus in the Fund, which is pointless.

More importantly, a contribution of that magnitute is most likely destroy the Company. Assuming you are employed by a small to midsize business, where would they find to meet that cost? Pay freezes and redundancies no doubt.

From every angle asking for the £26m to be put in is a real waste of money, as it doesn't achieve anything for anyone.

The freeze on accrual of more benefits is in the hope that the Scheme will ultimately be able to keep investing itself out of trouble (with the Company still making ongoing contributions but at a lower rate).

Your pension will increase during deferment at a reasonable rate (certainly at a rate higher than your pay will increase in the current climate!).

As others have said stick as much as you can into the new pot up to the Company's matching rate.

You still have superb pension provision. Do not lose sight of that amongst all the deliberately ambiguous correspondence and misinformation you will be fed by the union.

I appreciate its hard, but the world moves and things change. Unfortunately sometimes you need to take a step back and readjust your goals. It's not your fault, and it's not your employers either. Better to have a DC pension than no job.