Workplace pension talk

elantan

Hi all,

looking for advice/ opinions if you will.

Bit of background

I used to stay on top of the pension situation, however before I started my studies I purposefully transferred all my sipp to tracker ( vanguard 80) as I knew I wouldnt have time to spend on pensions as well as studying.

So with this in mind I have stayed away from changes that are happening within the area of pensions with a plan to pick back up when I have time.


So current situation (this is about husbands pension not mine)

Husband is 51 and has worked with his employer for 27 years, his company has changed several times and he has been tuped over, his pension was divided by two, one of which is with National grid the other with SGN. Several people in his work have approached him recently and informed him that they are taking their pension and putting it into a SIPP, especially the National grid one ( as there are no longer payments being made into this)

One person has suggested he do the same as they believe there will be no pension pot left soon with everyone taking their money out. They have said they feel sorry for those left (husband for eg) as when he comes due to have his pension there will be no money left.

Now as i say I have not been keeping abreast of the whole pension situation for a few years due to studying and I am aware that George Osborne did make changes but I didnt pay much attention to them as we are still a bit away from retiring and I knew things are liable to change and also I am studying.

My question I spose is, will all these individuals mean that when my husband comes to take his pension there will be a smaller pension pot left for him, if so is there a way we can prepare for this? Would it be a wise move to transfer his pension into a Sipp or similar to try and protect his pension ( particularly the one into which no payments are being made)

Sorry if this is confusing, I am receiving information 3rd hand and my husband knows nothing at all about pensions so it can be quite difficult to get to the bottom of the situation.

quotememiserable

I would think it's almost certainly a defined benefit pension, in which case there is no 'pot'. There's a commitement to pay him is earned pension. If it's a defined benefit, then he has a cash pot all his own that's unnafected buy what anyone else doesn. Either way, the people saying this are dramatically misinformed.

elantan

quotememiserable wrote: »

I would think it's almost certainly a defined benefit pension, in which case there is no 'pot'. There's a commitement to pay him is earned pension. If it's a defined benefit, then he has a cash pot all his own that's unnafected buy what anyone else doesn. Either way, the people saying this are dramatically misinformed.

Thanks yes it is a defined pension ( I think, dont have paper work to hand to be positive though), I should have said sorry, I did think this was still the case but was unsure with all the changes that have been going on, just incase something happened that I had missed.

xylophone

https://www.nationalgridpensions.com/392/784/deferred-members

Presumably your husband has a deferred DB pension with National Grid?

What is the transfer value?

https://www.moneyadviceservice.org.uk/en/articles/transferring-out-of-a-defined-benefit-pension-scheme

http://www.royallondon.com/Global/documents/GoodWithYourMoney/COMPANY-PENSIONS-FIVE-REASONS-TO-TRANSFER-OUT-AND-FIVE-REASONS-NOT-TO.pdf

Is the Scotia pension also a DB Scheme?

elantan

xylophone wrote: »

https://www.nationalgridpensions.com/392/784/deferred-members

Presumably your husband has a deferred DB pension with National Grid?

What is the transfer value?

https://www.moneyadviceservice.org.uk/en/articles/transferring-out-of-a-defined-benefit-pension-scheme

http://www.royallondon.com/Global/documents/GoodWithYourMoney/COMPANY-PENSIONS-FIVE-REASONS-TO-TRANSFER-OUT-AND-FIVE-REASONS-NOT-TO.pdf

Is the Scotia pension also a DB Scheme?

Since first posting I went and looked out his stuff, have got him to go online and look for a transfer value, they dont supply that online, however he can email them and request a statement letting us know how much he may get, not thinking of getting one of these at this stage.

Scotia gas one i'm unsure if it is still a Db pension I know it was but I seem to recall something happening with it

xylophone

Your husband should do nothing at all until he fully understands his pension situation.

He should read all the above links.

Has he obtained a new state pension statement?

https://www.gov.uk/check-state-pension

Is he currently contributing to the Scotia pension? Presumably he has a scheme booklet and information about any changes that have been made?

Are you indicating that there is also a deferred DB scheme with Scotia?

He needs to read that booklet/information carefully.

elantan

He has got an updated pension statement, I insisted we both got one over Xmas ( whilst I'm not staying totally on top of things I am trying to do bits and bobs)

I've read some of the links and have sent the others to the printer as I think we will need to go over it with a fine tooth comb.

He only has the two pensions ( plus state) one national grid ( with no money being paid into it) and one Scotiabank to which he pays monthly contribution 's

There no doubt will be a scheme booklet but it wasn't in the file where I keep his pension stuff so will need to search for it

elantan

Thanks for the help much appreciated

xylophone

Scotiabank to which he pays monthly contribution 's

Scotia Gas Networks as was?

https://en.wikipedia.org/wiki/SGN_(company)

elantan

Aye Scotia gas for some reason my phone just added bank ... weird

Malthusian

elantan wrote: »

Husband is 51 and has worked with his employer for 27 years, his company has changed several times and he has been tuped over, his pension was divided by two, one of which is with National grid the other with SGN. Several people in his work have approached him recently and informed him that they are taking their pension and putting it into a SIPP, especially the National grid one ( as there are no longer payments being made into this)

One person has suggested he do the same as they believe there will be no pension pot left soon with everyone taking their money out. They have said they feel sorry for those left (husband for eg) as when he comes due to have his pension there will be no money left.

They are talking abject nonsense on a stick.

I hope their SIPPs are not all invested in self storage pods or airport car parking spaces or similarly terribly clever investments.

To add to previous posters, no, the fact that they have transferred out does not make it less likely that your husband's DB pensions will be paid. The scheme has a committment to pay him the owed pension and that doesn't change one iota because someone else has transferred theirs out. If anything, the scheme will be more able to pay his pension because traditionally, the value you got by transferring out was typically less than what the future benefits were actually worth. (This has changed for some people with recent rises in CETVs due to low gilt yields, but the general principle stands.) The scheme will have fewer liabilities to pay in the future thanks to your husband's colleagues cashing theirs in, and the fact that it has slightly less money in the scheme is unlikely to outweigh this.

Even if the worst does happen, your husband's pension will be covered by the Pension Protection Fund. There would be a 10% haircut and a cap on inflation-linking and the total pension, but even a DB pension hit by the PPF haircut is often more valuable than the cash-in value.