Company Final Salary Pension closed

bobby1969

My company has closed it's Final Salary Pension to all members.
This will close at end of September 2013.
I have been in the FS for 28 years.
It calculates on 1/60th x how many years in scheme.
We have now all been told we will be put into the Money Purphase Plus Scheme, giving some benefits from the FSP like death in service still being X4 of salary.
I am 44 years old and would only have had 12 more years in the final salary scheme before I was 'maxxed out' at 40 years.
The company are still in negtioations and are currently willing to put in 6.5% to our max 4%. Any extra would have to be AVC's.
I have been paying in 9% (£220 p/month) into the scheme and looks like I will lose quite a bit money.
Looking to retire at around 62, still giving me 18 years to save in MP+.

roysterer

This is happening everywhere in the Private Sector.
Yet through taxation we are expected to keep the Public Sector Final Salary Pensions ongoing?????

Seems rather unfair to me along with many others no doubt.

When is the Government going to be brave enough to tackle this??
I guess it will be sooner than later, they cant bury there head in the sand for to much longer.

WobblyDog

The company I work for closed its final salary scheme a few years ago. In the replacement defined contribution scheme employee contributions are matched by the employer up to 10%, and for the first 3 years after the change, I think the employer contributions were even higher than that.
Even so, those in the FS scheme were considered to be disadvantaged by the change.

The only slightly positive aspect of this I can see is that by having both final salary and defined contribution pensions, you are spreading the risk a bit, because the the 2 pension types are impacted differently by law changes, political decisions, market moves, etc.

gadgetmind

A 6.5% employer contribution is reasonable but not spectacular. Might they go for 7.% to match 5% or similar?

Will they also allow contributions via salary sacrifice to save NI? If so, will they contribute some of the 13.8% they save on your contributions?

Also, is the pension managed by them or will you have a choice of funds?

These would seem to be the key negotiating points.