How can Pension companies be allowed to keep you in the dark?

rpc

That story isn't so different to what could happen here.

If a company with a DB pension scheme went bust, the PPF would step in. That protects most of your benefits (90% of benefits up to a cap just over £30k). In the story you highlight, up to $54k was protected so most people did not lose a thing. DB pensions don't get "lost" any more, although the benefits above the cap are at risk.

Trustees do not have much discretion over death benefits and the best way to protect your partner is to marry them. I haven't read the story you cite, but the trustees clearly decided that the partner wasn't dependent or didn't meet their criteria in some other way. The Scheme Rules are fixed and it is easy enough to find out what they are.

RichandJ

Bazofts_Revenge wrote: »

Google Pilots lose their pensions ( I can't post attatchments) This was one story of company pensions going down. Maybe it would only happen in the US. I have heard of Pension guarantee schemes where 90% is covered. The company who has my pension is gradually becoming more US based and may one day move its base. I just don't like having all my eggs in one basket. I don't recollect getting an update on my scheme in the last year either.

I will write to them and get valuations on all my options. I have a new partner and as such I want her to be looked after. I do not trust 'Trustees' to pay out if I pass away first. Despite filling in a nomination form it is up to the trustees whether they pay out or not. The Sunday Times this week listed such a case where a depenent partner wasn't given a spouses/dependent pension.

So your one (not "so many") horror story is about something happening in the USA, not the UK. So not relevant as the scheme is based here and subject to UK law.

I'm afraid some of your generalisations in this post are just wrong as well. Under UK Trust law, pension scheme Trustees may take notice of but are not bound by member nominations. This is actually a protection against any death lump sum being subject to inheritance tax. Trustees are also bound by the Rules of their Scheme, and they can be prescriptive, descriptive or sometimes (bloody annoyingly) vague about who they can & cannot consider as a dependant for survivors benefit purposes. Of course, being married is the best way to avoid any uncertainty.

As dunstonh says here (& on many previous occasions) don't listen to the bloke down the pub or workplace colleagues, get the facts from whoever administers the scheme. Facts are good, they tend to trump media scare stories, irrelevant international news & especially, the bloke down the pub.

dunstonh

You need to look at the UK as that is what applies to you. You said many stories. What others have you got?

The company who has my pension is gradually becoming more US based and may one day move its base.

Which does not affect the pension.

I don't recollect getting an update on my scheme in the last year either.

you wouldnt do if you are no longer a contributing member. The benefits are set when you leave and do not change apart from having an indexation applied.

I will write to them and get valuations on all my options.

as has been said already (a couple of times), you do not have a valuation.

I do not trust 'Trustees' to pay out if I pass away first.

That isn't a very logical view.

Despite filling in a nomination form it is up to the trustees whether they pay out or not.

That is not correct. The scheme rules will be applied. It will pay out in accordance of those rules. The trustees have a right to overrule nominations of beneficiary that are viewed as being out-of-date or malicious. Nomination of beneficiaries are more applicable to money purchase schemes though.

The Sunday Times this week listed such a case where a depenent partner wasn't given a spouses/dependent pension.

an unmarried partner is not a dependent or spouse. This would clearly be shown in the scheme rules explaining payout on death. A money purchase scheme would pay out because it is a pot of money. It is not a selection of defined benefits.

xylophone

What you do need to do is keep the Trustees updated with any change of address or personal circumstances.

atush

And of course, GET MARRIED if you want a pension to go to a partner.

Could be, in the case you cited (but didn't cite so we can't check) that a guy left his wife and 5 kids for his mistress, and put her on his nominations form when he hadn't made a settlement and pension split with his wife.

The trustees would clearly side with the wife (and esp) children in this case and not give the pension to the new partner.

molerat

I was "kept in the dark" as you put it for 15 years. I knew what the pension was at leaving and I knew what the indexing was, all from the documentation provided at the time. I set up a spreadsheet with a forecast indexing and put in the correct figure each year. At the end of that 15 years the pension paid me 0.2% pa less than my spreadsheet calculated (when I recalculated using an exact day start their sums were correct ). That is how simple it is.

hyubh

RichandJ wrote: »

Final salary schemes do not by law* have to provide annual statements to deferred members. You are (should have been) told what the pension is on leaving with a constituent breakdown, e.g. GMP, pre/post 97 element etc, and how each element revalues (increases) in deferment.

An annual statement would be pointless (as well as a significant cost to schemes) as the figure means nothing until actual retirement

Blimey - it's that lazy, good for nuffin' private sector again! ABSs are compulsory for LGPS funds, though the deferred ones are obviously pretty trivial to produce (add the latest pensions increase %, and wack them out). Not sure why you say 'the figure means nothing'...

Obviously, to save on postage, LGPS administrators are slowly gravitating towards electronic distribution. Either way, ABSs are still produced.

pimento

I paid into a final salary scheme from 1981 until 1992. When my employer's company went into receivership in 1992, it transpired that they had stopped paying contributions to the pension company (Guardian Royal Exchange as they were then) a few months earlier. The employees knew nothing. GRE didn't contact us to tell us our pension wasn't being paid to them.

It took them (the receivers, Grant Thornton) seven years to sort out the mess and my 11 years worth of contributions eventually bought me 18 months worth of contributions in the pension of my new employer.

It's fair to say that I don't really have a lot of trust in pensions these days.


Edited to add: A Google search found the details.

http://data.synthesis.ie/site_media/trec/FT/FT923-539.txt

dunstonh

I paid into a final salary scheme from 1981 until 1992. When my employer's company went into receivership in 1992, it transpired that they had stopped paying contributions to the pension company (Guardian Royal Exchange as they were then) a few months earlier. The employees knew nothing. GRE didn't contact us to tell us our pension wasn't being paid to them.

Are you sure that is final salary. It is very rare to see an insurance company used on final salary schemes.

It's fair to say that I don't really have a lot of trust in pensions these days.

Which is strange as pensions have so many protections at different levels now that such an event would be hard to happen again on defined benefit scheme. I don't think it is of anyone's benefit to compare 1992 legislation and protections with that which exists today.

pimento

dunstonh wrote: »

Are you sure that is final salary. It is very rare to see an insurance company used on final salary schemes.

I thought it was but it was a long time ago.

Which is strange as pensions have so many protections at different levels now that such an event would be hard to happen again on defined benefit scheme. I don't think it is of anyone's benefit to compare 1992 legislation and protections with that which exists today.

Ironically, I'm in another final salary scheme at the moment. As I joined it quite late on (I was 37) I doubt it will pay out enough to keep me in the manner to which I would like to become accustomed but will probably pay out too much to qualify me for any means tested benefits.

Given my time again, I wouldn't have joined a pension scheme.