Where to start unravelling pensions?

Andypandyboy

I have had several pension schemes running in my working lifetime, and I have no clue where to start to understand what my entitlement or rights might be.

I am coming up to an age where I should be getting organised, and would like to think about retiring around age 60.

I had a final salary scheme till it closed some years ago, but I am still with the same employer. The company has changed hands over the years several times and I have never kept track of where my pension payments were going. it is a large multinational company so I am hoping they are more clued up than I am and it has been invested wisely. Am I niave?

I think I need to rectify my ignorance now and start to understand what I might get and what my options are.

I would love some pointers on where to start.

xylophone

Make a list of the pensions that do not relate to your current employment. and where they are held.

Presumably you have been receiving annual statements?

If not, contact the companies and ask for the current values.

With regard to your current employment, presumably you are a deferred pensioner of the Final Salary scheme?

You are an active member of a Group Personal Pension Scheme.

Are you receiving an annual statement for both of these.

You will retire under the new state pension scheme - see https://www.gov.uk/new-state-pension/overview and obtain a statement

https://www.gov.uk/government/news/millions-more-offered-free-pension-statement

Once you have all the paperwork together, consider whether it might be to your advantage (or not) to consolidate the pensions that do not relate to your current employment.

https://www.hl.co.uk/partners/search/new-pension-rules-changes-2015?theSource=PCGSI&Override=1&adg=G+SIPPENI+BDG&gclid=CPLHj-zugsQCFXGWtAodqk4ANA might be worth a browse for information.

If you need assistance, you might wish to consult an IFA

https://www.unbiased.co.uk/

atush

Do you get annual statements? If so, get out the last ones?

See how much your DB pension os forecast to be, and see how the DC ones have performed. Their charges, and range of investments.

Then look to see if you can do better for any DC ones that are 'closed' ie you no longer contribute to and consider transferring. But eh DB pension and your current one should remain. You could change what your current one is invested in?

Then you need to get a current value of your DC pots. Use a pension calculator to see how large it might grow using current contribution levels. Check the projected income from the pot, add to DB pension income.

And raise the DC contributions if the projected income wont be sufficient?

Andypandyboy

Sorry, but what is the difference between DB and DC?

dunroving

Andypandyboy wrote: »

Sorry, but what is the difference between DB and DC?

DB = defined benefits (one such type being a final salary pension). It specifies how much pension you will receive, usually based on years of input. So the statements might say you will receive £X,XXX per year if you retire at age XX.


DC = defined contribution, or money purchase. These involve your contributions being put into various investments. Statements might tell you how much the total value of the "pot" is, how much it has increased over the past year, etc.

Andypandyboy

Reading this makes me realise I knew even less than I thought I did!

Right, so is it usually the case that when a FS scheme closes all benefits accrued to that point are frozen under those rules, or is it that the scheme has changed and simply becomes a different form of pension for everything that is in it regardless of the original designation?

DC is the investments made from my portion and the employers portion of pension payments?

What about the opt in/opt out of certain pension benefits that I seem to remember? I know I made a decision one way at the time, but I am not sure what that was. I am woefully ignorant on the subject I am afraid.

Thank you all for taking the time to help, it is appreciated.

dunroving

Andypandyboy wrote: »

Reading this makes me realise I knew even less than I thought I did!

Right, so is it usually the case that when a FS scheme closes all benefits accrued to that point are frozen under those rules, or is it that the scheme has changed and simply becomes a different form of pension for everything that is in it regardless of the original designation?

DC is the investments made from my portion and the employers portion of pension payments?

What about the opt in/opt out of certain pension benefits that I seem to remember? I know I made a decision one way at the time, but I am not sure what that was. I am woefully ignorant on the subject I am afraid.

Thank you all for taking the time to help, it is appreciated.

No, DC and DB refer to the type of pension scheme, not who pays into it.


My current occupational scheme is a bit like the teachers' pension (I teach at a university). Both I and my employer pay into the scheme. The "defined benefit" is that when I retire, for every year I and my employer have paid in, I will retire on 1/80 of my salary (that's the defined *benefit*). So if I paid in for 20 years I'd retire on a pension equivalent to 25% (20/80ths) of my salary. It's easy to get confused because the contributions I and my employer have to pay is "defined".


When I taught in the US, I was in a defined contribution scheme. Same as the current one only in that both I and my employer paid into it. However, it consists of a set of investments that I can change, rebalance, etc. The "benefit" when I retire will depend a lot on how well the investments perform. The value of the pot has doubled in the past 10 years even though I haven't paid into it. That is what someone else was asking when they said how is your DC pension performing. DC statement might tell you that your pension pot is currently worth £50,000. There was a time in the mid-2000's and immediately after 9/11 when my pot was going down in value even though I was paying into it.

atush

edit to change DB to DC there?

dunroving

atush wrote: »

edit to change DB to DC there?

Good spot thanks - didn't mean to add to the confusion!

xylophone

Start with the pensions unconnected with the company you are with now.

You do not say whether any of these were defined benefit pensions.

https://www.moneyadviceservice.org.uk/en/categories/types-of-pensions

What about the opt in/opt out

I wonder whether you are referring to contracting in and out?


http://www.which.co.uk/money/retirement/guides/contracting-out-of-state-second-pension-s2p/what-contracting-out-means/

When you become a deferred pensioner of a scheme, your benefits remain in the scheme but revalue in deferment.