Help please... Forced pension scheme closure

amazon1

I have a final salary (DB) pension and my employer has decided to close the scheme and transfer to a new one, a DC I think, which obviously is terrible in comparison to my existing one.

The have offered me £500 pounds if I sign by a deadline to agree to the opt out.

If I don't sign, they have said they will listen to any reasons anybody has for not wanting to leave the scheme but if they decide to go ahead and close it, then it will be a contractual change.

Obviously this decreases my package etc, can they just go ahead and do this?

Will ring the Pensions Advisory Service in the morning but I'm just not sure what to do....

Shimrod

Sadly, they can close the pension scheme, and it has happened to a large number of pension schemes in recent years. Here are some links to other threads discussing the same - You might get something useful out of them to use in any possible negotiations.
https://forums.moneysavingexpert.com/discussion/3085268
https://forums.moneysavingexpert.com/discussion/2782066

https://forums.moneysavingexpert.com/discussion/2776114

mania112

To be clear (and as I understand it) this is closed to NEW money.

You're not actually taking the money out of it, what you've got will continue as normal.

However, all future monies will enter the new scheme.

xylophone

The have offered me £500 pounds if I sign by a deadline to agree to the opt out.

Opt out of what?

Shimrod

xylophone wrote: »

Opt out of what?

I read it as a sweetner to make it easier for people to swap to the DC scheme. Closing the final salary pension scheme is going to be a change to terms and conditions, most probably with a new contract to ensure no link between salary and the DB scheme going forward.

xylophone

i think you need to be sure of what is actually proposed.

Do you mean that the FS scheme is closing completely, even to existing members?

amazon1

yes, this a closure to existing members. It has been closed to new members for a few years now.

The 500 pounds is an 'early opt out' payment if I sign to agree.

xylophone

http://www.sjberwin.com/Contents/Publications/pdf/251/7f4e19b9_a23b_4593_80c2_755a436543e0.pdf

The fund is closing to future accrual but what is happening to benefits already built up in the Scheme? http://www.out-law.com/en/topics/pensions/advice-for-employers/closing-defined-benefit-pension-schemes/

amazon1

As I understand it, they would remain, (deferred), unless I chose to transfer them into the new DC scheme

xylophone

unless I chose to transfer them into the new DC scheme

:eek:

And how would this be to your advantage?

Look at 'increases in deferment' in your scheme booklet.