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Can someone explain please

Hello All

I am under consultation for redundancy but would possibly be able to get medical retirment instead.

However on contacting the pension head office I discover that even with a fully paid up pension you can only receive 25% of your final salary.

Although this was quoted as a projected £12,000 pension in 2005 the company that has took over in 2006 have only quoted £4000 explaining that we have changed from 60 to 90 whatever this means.

I have paid into this pension fund for 25 years and would have thought it would be a lot better than thier quote.

Would I now be better taking redundancy package bearing in mind that as I am partly disabled I will struggle to find another job.

Thanks for any replies.

Comments

  • ads_2
    ads_2 Posts: 109 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    The change from 60 to 90 probably relates to the fraction of your salary you will receive in retirement.

    It sounds like you would have received 1/60th for every year you paid into the scheme, at some point the scheme changed so you were then going to receive 1/90th of your final salary when you retire. I believe the change in the scheme should only effect future benefits. If the scheme only changed from 60ths to 90ths in 2006 I can't see how it could have made such a dramatic difference to your quote?

    I hope this makes sense and I'm no expert.
    something missing
  • Andy_L
    Andy_L Posts: 12,958 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    When you are medically retired (under most scheme rules) you dont get a "full Pension" ie get credited with the years of service you'd get if you worked till normal retirement age. Generally you get what you've acrued possibly plus a few bonus years - but it isn't reduced for taking it early.

    However only getting 25% for 25 years seems low, did they perhaps mean 25 years, ie 25/60ths. about 40%
  • tanith
    tanith Posts: 8,091 Forumite
    Part of the Furniture Combo Breaker
    Its possible they were talking about your lump sum which would be 25% of the whole pension.... you need to get it explained properly before you commit

    EDIT: when I took Ill-Health Retirement the pension was made up to what I would of expected had I been able to continue to 60yrs , my retirement age...
    #6 of the SKI-ers Club :j

    "All that is necessary for evil to triumph is for good men to do nothing" Edmund Burke
  • Agree that you need some clarification. As ads posted, if the rate at which your pension builds up is changed, it can only change for the future - all the pension you built up beforehand is protected i.e. at the original promised rate.

    One other thing ..... your employment can only be terminated for one reason - either redundancy or ill-health. Either way, there is a process to go through.

    Has your employer initiated any action to terminate your employment due to ill-health? Have they indicated that they would be willing to do so, instead of redundancy?

    Have you considered that if your employment terminates due to ill-health, that you will not get any redundancy pay?
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
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