Dixons Pension Help!

Welsh_Red

Hi,

I left Dixons Group in March 2012 where I was paying into the company pension scheme for 13 years (DRESS + Pensionbuilder). I am now employed by Stagecoach and due to be enrolled in their pension scheme after 1 years service in March 2013.

My question is what to do (if anything) with my Dixons Pension which I no longer contribute into?

My gut feeling is to sever all ties with Dixons as I no longer work for them and move my Pension but appreciate this may not be the best move financially for me.

Any help greatly appreciated.

Thanks in advance.

Linton

Was the Dixons Pension Defined Benefit (Final Salary) or Defined Contribution whereby a pot was accumulated in your name? I guess your new one is DC.

If the old one is DB then it probably isnt sensible to transfer though you would need to get a benefits statement and transfer value to confirm. If they are both DC you would need to compare the details, particularly the charges and the range of supported funds.

In principle there is no problem with having multiple pensions.

Welsh_Red

Linton,

Just made a call to Dixons Pension dept.

From May 1999 - April 2010 I was enrolled in DRESS (final salary scheme) then the Company made a decision to change the pension scheme so at that point my final salary pension was frozen.

All employees enrolled in DRESS were then transferred into the new pension scheme called Pensionbuilder (not final salary scheme) I paid into this between May 2010 - March 2012.

The lady I spoke to said my Pension is now frozen and that the 2 pension schemes are linked.

I have a transfer enquiry form for the 2 schemes which I sent for back in September 2012 which contains various figures, total accrued pension at exit, employer contributions, employee conributions etc.

Linton

Your final salary scheme isnt frozen - it will continue to rise in value with inflation. And the bit about them being linked could be important if it means you can take out 25% of the combined pension as a tax free lump sum preferentially from the DC Pensionbuilder scheme when you come to retire.

It would seem that the Dixons pension could be moderately valuable and you would be need to be very careful about moving it. In any case you could find it difficult as transfering a FS pension to a DC one may well be seen as a mis-sale and pension companies would be very wary about permitting it.

RichandJ

Welsh_Red wrote: »

Linton,

Just made a call to Dixons Pension dept.

From May 1999 - April 2010 I was enrolled in DRESS (final salary scheme) then the Company made a decision to change the pension scheme so at that point my final salary pension was frozen.

All employees enrolled in DRESS were then transferred into the new pension scheme called Pensionbuilder (not final salary scheme) I paid into this between May 2010 - March 2012.

The lady I spoke to said my Pension is now frozen and that the 2 pension schemes are linked.

I have a transfer enquiry form for the 2 schemes which I sent for back in September 2012 which contains various figures, total accrued pension at exit, employer contributions, employee conributions etc.

Then she's talking drivel. A Final Salary entitlement built up after 1990* is not "frozen", it has to be increased between leaving and retirement by at least RPI (maybe CPI for the portion of benefits built up after 6 April 2009, depending on the scheme Rules). The technical term for a Final Salary pension when you leave before normal retirement age is "deferred".

Suggest you call again & get someone who knows what they're talking about.

* technical note for any pedants about - yes, some elements for leavers between 85 & 90 are also subject to revaluation, but it's not relevant in this case.

ETA - Linton beat me to it.

Welsh_Red

Linton,

Thank You very much for our advice.

One more question - If in the future Dixons went out of business would my Pension be protected, I am 42 now and have quite a few years before I can retire.

Linton

Welsh_Red wrote: »

Linton,

Thank You very much for our advice.

One more question - If in the future Dixons went out of business would my Pension be protected, I am 42 now and have quite a few years before I can retire.

See here. Your pension scheme is separate from Dixons, but may be owed money by the company. If the pension scheme is unable to pay you, 90% of your pension is protected up to a maximum of nearly £27000/year.