Pension or shares?

jamesd

Do check whether you can join the older scheme. If you can, that is probably your best option.

For examples about the new one, see the New Morrisons Pension discussion.

Linton

andy013 wrote: »

Yes, sorry for the confusion. Although I'd like to know where you read that this scheme is now closed to new employees, since I believe I still have the option to join it (is that because I was working there prior to 05?).

I don't really understand the CARE scheme though. Can someone explain it to me in terms of some example numbers? Would it be better than a SIPP with an index tracker?

It looks like I may have misinterpreted a press report. Looking further it now seems that in 2009 Morrisons did close their final salary scheme but replaced it with an average salary one. For example see a one line comment somewhere in here. However I have found this report from November 2012 which says that both Defined Benefit ("Final Salary") schemes are closed.

So perhaps more investigation on your part is required to see which schemes are really open to you.

Normally you would expect to find that a Final or Average Salary scheme is good for the employee and expensive for the employer - that is why they are being closed. Though whether the Morrisons one is would require detailed information and example calculations.

With these schemes you are guaranteed that you will be paid a fixed % of your final or average salary X years of service, index linked up to a cap, for the whole of your life after the retirement age. If you leave early the pension you have earned up to that point increases with inflation until your retirement age. So there is no investment risk whatsoever - all risk is borne by the company.