Pension Pot

Gkmaxx

There has been a lot of chat recently about your pension pot or pension fund , after looking through my recent pension statements I can't see any figures that may equate to the total fund in my pension. Does anyone know if this is common practice or any reason as to why this information is not readily available. Thanks GK

Loughton_Monkey

Gkmaxx wrote: »

There has been a lot of chat recently about your pension pot or pension fund , after looking through my recent pension statements I can't see any figures that may equate to the total fund in my pension. Does anyone know if this is common practice or any reason as to why this information is not readily available. Thanks GK

You'll need to be a bit more specific than that.

What sort of pension? One provided by your employer that will be based on 'final' or 'average' salary? A Cash pension into which you and your employer contributes each month? One that you personally pay into? Direct with a pension company, or through some sort of financial adviser?

Vortigern

Gkmaxx wrote: »

There has been a lot of chat recently about your pension pot or pension fund , after looking through my recent pension statements I can't see any figures that may equate to the total fund in my pension. Does anyone know if this is common practice or any reason as to why this information is not readily available. Thanks GK

Perhaps you have a "Final Salary" or "Defined Benefit" pension. In which case your annual statement will show a possible lump sum and a forecast annual pension.

Gkmaxx

It's a final salary pension.

dunstonh

Gkmaxx wrote: »

It's a final salary pension.

You dont have a pension pot or pension fund. You have a defined benefits pension. Your pension is provided as a range of "defined benefits" and is not subject to investment returns on funds.

Virtually none of the changes talked about have any impact on your type of pension.

sandsy

There's 2 basic styles of pensions:
- one which is defined by the income it provides;
- one which builds up a pot which is then used to provide an income.

You have the first type.

Triumph13

sandsy wrote: »

You have the first type.

And the envy of people who have the second.

Loughton_Monkey

Gkmaxx wrote: »

It's a final salary pension.

In which case, if you want to get to 'know' what you are entitled to, your company should be able to give you enough 'bumf' about the scheme. There will be a set of "Rules", but there should also be leaflets on what you pay, how you accrue benefits, and when your 'Normal Retirement Date' is.

xylophone

Don't you have a scheme booklet?

agarnett

dunstonh wrote: »

You dont have a pension pot or pension fund. You have a defined benefits pension. Your pension is provided as a range of "defined benefits" and is not subject to investment returns on funds.

Virtually none of the changes talked about have any impact on your type of pension.

In the current climate isn't that a downright misleading answer ? - and from an IFA too.

If the OP is a member of a private sector DB scheme then for all common or garden intents or purposes in 2015 there is usually an entitlement to receive a quotation for something commonly known as a transferable "pot" and better known as a Cash Equivalent Transfer Value or CETV.

There are good DB schemes and less good ones. There are however perhaps 80 or 90% fewer DB schemes than there were 15 years ago, primarily because employers got the idea of running from their original promises as soon as it started getting expensive to top up the pension scheme each year. They either froze their schemes for all further contributions and shoved their existing staff members into something less good, or they went further and wound up their DB schemes. There is better government protection developed over the past 10 years than there ever was previously for the fall out of such wind-ups, but pension freedoms have shone a well overdue spotlight on all our pensions.

Yes you have to think very carefully indeed before transferring out of a DB scheme, and IFAs will usually run a mile from ever being involved in a transfer out of one for fear of you coming back later to sue them for letting you transfer out over their live body. But I think that to blankly allow you to believe that there is no such thing as a pension "pot" because you are in a DB scheme is a very narrow-minded presumptuous thing to do without asking you why you might like to know. In fact I consider it misleading in the extreme.

The pension freedom rules do in fact apply to you if you are in a private company DB scheme, but talk is that they soon may not be - the door may very soon be slammed shut again on exactly your type of pension "freedom" (to be granted a CETV) if certain people have their way. In the last month or so it appears that very few IFAs have been prepared to continue to risk their Professional Indemnity insurance policies to even talk to you.

Part of any careful thinking about whether to transfer your entitlement to certain guaranteed retirement benefits out of the scheme into a cash equivalent "pot" is to take into account what state the employer company is in and whether it and its appointed pension scheme trustees are currently, or soon likely to be, trying to abdicate or dilute their pension scheme liabilities, or whether they are trying to continue to impress you by sticking to the original promises through thick and thin.

If yours is a government pension then that's different but I think you are still entitled to know in what ways it is different from your private sector oppos' schemes.

I am sure there are also plenty (both qualified in their opinion, and not) who believe that people like you should be kept in the dark for your own good, but their view of the world may be affected by the fact that they can't or won't help you (or both), and one cynical view might be that in their day job, answering questions from people they can't help gets in the way of their fee earning activity.

Is yours a private sector DB scheme, or a government scheme or something in between perhaps?

Even if you don't want to transfer out, a useful barometer on the real state of your scheme is the trend of CETV quotes you may generally request at least once a year free of charge.

mgdavid

agarnett wrote: »

In the current climate isn't that a downright misleading answer ? - and from an IFA too.

<rant start>

<rant end>

.......

No, it isn't. It will be correct 99% of the time.