Changing “pensionable salary” definition

bluebaron

I have a quite generous DB pension. I started working for my company in 2003 and in 2011 my company made some changes.

Previously my pension was to be paid on my average salary over the last two years befor retirement.

In 2011 they applied a ‘cap’ to my salary before a large promotion doubled my salary. As such my salary at retirement will be significantly different to my new “pensionable salary”.

My question is that that although they affirmed that the new changes would not affect my accrued pension, it does. I now have 8/60ths of my accrued pension based on a significant lower salary.

Is this permitted?

Thanks for advice.

Dox

Almost certainly yes, unless your capped salary is lower than your pensionable salary at the time it was capped.

Many companies have capped the salaries they are prepared to pension.

kidmugsy

bluebaron wrote: »

In 2011 they applied a ‘cap’ to my salary before a large promotion doubled my salary. As such my salary at retirement will be significantly different to my new “pensionable salary”.

In effect they have cut your deferred pay. One possible response is to contact a headhunter.

Dox

kidmugsy wrote: »

In effect they have cut your deferred pay. One possible response is to contact a headhunter.

Good luck finding a new job in the private sector which offers you a DB pension scheme.

hyubh

bluebaron wrote: »

In 2011 they applied a ‘cap’ to my salary before a large promotion doubled my salary. As such my salary at retirement will be significantly different to my new “pensionable salary”.

My question is that that although they affirmed that the new changes would not affect my accrued pension, it does

'Accrued' = what your pension to date is (was), at a particular point in time. On the changes being made (= the point in time), it was formally possible that your salary would decrease in real terms in the future. Ergo, your 'accrued' pension was not diminished.

I have sympathy, but kidmugsy claim ('In effect they have cut your deferred pay') is one concerning prospective, not accrued pension.

kidmugsy

Dox wrote: »

Good luck finding a new job in the private sector which offers you a DB pension scheme.

Why should he demand a DB pension? If he can find a whole package that is more attractive then he should consider moving.

hyubh wrote: »

'In effect they have cut your deferred pay' is one concerning prospective, not accrued pension.

Indeed it is. Still a pretty good reason to look for a new job though. The present job has just been made less attractive.

bluebaron

Thanks for advice people.

I've been offered a DC rate of 20.5% in lieu but will still end up around £20k a year worse off.

Still won't find better elsewhere so I'll have to suck it up I guess.