Withdraw my pension contributions - Is it forbidden by law?

Arabahn

I have been enrolled in my company pension scheme over 2 years and I would like to withdraw my contributions.
However, the pension officer says that after two years of enrollment, I cannot withdraw my contributions (not even when paying any due tax or fee for it). "I can confirm that Under the Pensions Scheme Act 1993 it states that members of pension schemes who have 2 or more years' service in a pension scheme have a statutory right to a preserved pension and are not entitled to a refund of their own contributions. "

The only thing they can do is transfer my contributions to other scheme or wait until my retirement (I’m in my 20s!).

I can't believe I can't get back my money (even paying a penalty fee and the due taxes). Is there any way I can get back my money? What is the best way to pay lower penalty fees/taxes?

JoeCrystal

Well, it is not your money, it is held for your benefits. This is why it get tax relief and so on. Not mentioning getting the employer's contribution as well. Free money really.

What kind of pension scheme it is anyway?

dunstonh

I can't believe I can't get back my money (even paying a penalty fee and the due taxes).

Its a pension. Not a savings account. The clue is in the name.

s there any way I can get back my money?

Not until you are 55. (although could be 60 by the time you get there as its 10 years less than state pension age)

Arabahn

It is the Universities Superannuation Scheme (USS).

I know I got some tax relief and some university contributions but I can also tell that part of it came straight from my paycheck so, to some extent, it is actually my money.

dunstonh

I know I got some tax relief and some university contributions but I can also tell that part of it came straight from my paycheck so, to some extent, it is actually my money.

its a pay cheque. not paycheck.

it is not your money. It is held under a trust for which you are a beneficiary. You paid money in exchange for benefits when you retire. You didnt put money into an account you can draw on.

Arabahn

But I just don't want their benefits, I want the money deducted from my pay cheque (paying any due tax or fee).

I was thinking if it is possible to move to another scheme and, from that new scheme, withdraw at least a part of it.

missbiggles1

Arabahn wrote: »

But I just don't want their benefits, I want the money deducted from my pay cheque (paying any due tax or fee).

I was thinking if it is possible to move to another scheme and, from that new scheme, withdraw at least a part of it.

You'd be mad to transfer out of the USS sceme.

dunstonh

was thinking if it is possible to move to another scheme and, from that new scheme, withdraw at least a part of it.

its not. There is no lawful way to access the money. Transferring it between pensions doesnt allow you any earlier access. Pensions are locked in until age 55 (or 10 years less than state pension age by the time you get there).

One assumes you are leaving employment. Otherwise why on earth would you consider leaving an excellent scheme.

Arabahn

I may need the money over the next year.

I don't even manage to get them to send me my pension statements now, I don't think they will pay me back any money in 40 years time. If I had known this pension thing was a sort of 40-year long deposit, I wouldn't have put my money in it. Thanks to all for your contributions (to the forum) ;-)

JoeCrystal

Arabahn wrote: »

It is the Universities Superannuation Scheme (USS).

I know I got some tax relief and some university contributions but I can also tell that part of it came straight from my paycheck so, to some extent, it is actually my money.

And you want to transfer out from USS? That is insane. You are paying a pittance for that benefit then. In the long run, you will get your money and more back. Do you understand how good that scheme is?

For an example, let say that you earn £13,000 and for two years, you paid a modest £845 per year (based on tiny 6.5% contribution) so that mean, you paid £1690.

In exchange of that, you will get £325 per year income index-linked (based on two year service on 1/80th accrual) when you retire. (More since it will increase during the period you are not part of it) as well £975 lump sum (based on three time the pension).

So within two years after getting the pension from USS, you already got your money back and will get some more. Outstanding!

jem16

Arabahn wrote: »

I may need the money over the next year.

Try and save money elsewhere.

I don't even manage to get them to send me my pension statements now, I don't think they will pay me back any money in 40 years time.

That would be very, very unlikely.

If I had known this pension thing was a sort of 40-year long deposit, I wouldn't have put my money in it.

What did you think a pension meant? It's for retirement which you won't be doing for 40 years.

The USS is one of the best schemes around. Your older self will thank you for not being silly now. Stay in it.