Can a company sack you for not accepting a pension change

Daniel54

pvt wrote: »

I don't believe this is correct.

The basic rule of pension schemes is that whatever you have accrued cannot be altered or watered down. If you have accrued 10/60ths of FS, then that entitles you to 10/60ths of your FS, assuming you are still with the same company when you retire.

If you leave the company before retirement age, then it becomes a deferred pension and the benefit becomes 10/60ths of your salary at the point of leaving, plus whatever annual indexing is defined in the scheme.

When a DB scheme closes,it typically closes to further accrual which includes the effect of any future changes in salary.

The pension therefore becomes deferred as from the date of closure

The accrued benefits at closure are salary as at date of closure mulitplied by the accrual rate and the pensionable period of service up to that date.You are correct that these accrued benefits cannot be reduced and their value will therefore be maintained through indexation at either RPI or CPI,depending on the scheme rules

agarnett

Thank you Daniel54 for clarifying to avoid any further misunderstanding. So it looks like my S32 policy was correctly arranged, but sadly for the OP, if he was hoping for another promotion or three to cause his final salary pension at retirement to be relatively much bigger than it is today, then that is one big benefit lost.

In my case, I got all my fast-track promotions in early, and my salary seems to have plateaued at best since final salary pension scheme days, so I am just glad that what has survived of my deferred schemes to date is indeed still true final salary (on closure/exit) and not some Career Averaged hybrid!

redbuzzard

I was in a FS scheme that closed to new entrants in about 2000, and closed to further accruals in 2010.

At the close off date in 2010, my accrued benefits were about 13/60ths of my salary in that final year. That figure will be revalued (in the case of that particular scheme) according to the change in RPI each year, capped at 5% in any year, until NRA regardless of whether I continued to work for the company or not (I didn't). It would not have mattered had I continued to work there and ended up on a lower, or higher, salary.

pvt

Daniel54 wrote: »

When a DB scheme closes,it typically closes to further accrual which includes the effect of any future changes in salary.

The pension therefore becomes deferred as from the date of closure

The accrued benefits at closure are salary as at date of closure mulitplied by the accrual rate and the pensionable period of service up to that date.You are correct that these accrued benefits cannot be reduced and their value will therefore be maintained through indexation at either RPI or CPI,depending on the scheme rules

I which case I stand corrected. I have to admit to not experiencing the winding up of a pension scheme, so bow to your greater knowledge.

I do recall, from a period when I was a trustee member on my company's pension scheme, that for actuarial purposes in calculating the scheme's liabilities it was assumed that deferred members' accrued pensions were assumed to rise at approximately RPI, whereas for active members that figure was RPI+2%. The additional 2% reflecting the promotions and above inflation salary increases that an active member would accrue.

Ironically, I would estimate over the last few years that that figure would be the other way around as for a number of years pay awards were below RPI (or even nil!), so deferred pensions grew faster than my own in that respect.