The Barnardo's Pension Scheme

stephenadarglas

My wife is to leave her current employment with a local authority and take up a part time position with Barnardo's.  They have a DC scheme which they will contribute between 4 and 6%.  My wife will be with them for a maximum of six years (state pension kicks in).  I'd appreciate your views as I understand their old DB scheme was in deficit.  She's leaning towards starting a SIPP and investing there instead.  Barnardo's DC scheme invests circa 60:40 equities/bonds

molerat

Why would she want to give up an extra 4 - 6% pay ?

Why would a SIPP be better than their DC scheme ?

The DC scheme has no company involvement unlike the DB scheme, the two are in no way related. Even if Barnados went belly up and the DB scheme went into the PPF the DC scheme would still be there as if nothing had happened.

Dazed_and_C0nfused

stephenadarglas said:

My wife is to leave her current employment with a local authority and take up a part time position with Barnardo's.  They have a DC scheme which they will contribute between 4 and 6%.  My wife will be with them for a maximum of six years (state pension kicks in).  I'd appreciate your views as I understand their old DB scheme was in deficit.  She's leaning towards starting a SIPP and investing there instead.  Barnardo's DC scheme invests circa 60:40 equities/bonds

Seems an odd thing to be considering giving up free money which, depending on timing, could potentially all be taken without any tax liability at a later date.

Notepad_Phil

As per molerat above, the DB scheme and the DC scheme are in no way connected, so your wife would basically be taking a 4% to 6% pay cut for no reason if she chose to open a SIPP instead of paying into the company DC scheme - given that it is very unlikely that the company will contribute to anything other than their own DC scheme.

xylophone

 I'd appreciate your views as I understand their old DB scheme was in deficit.  

What has this to do with a DC Scheme?

Why would she wish to give up an employer's contribution to her pension?

sheslookinhot

One of the best employment benefits is being able to join an employer contribution pension scheme.

MX5huggy

Can’t see much public information on the DC scheme but the one thing mentioned is a 4 times salary death in service benefit. That adds further to the value.

stephenadarglas

Many thanks to you all.  Comments and advice are gratefully received and will be acted upon.

jamesd

Use the work scheme at least enough to get full employer matching. It's probably possible to change the investment.

She's clearly over 55 so making maximum pension contributions, up to full gross pay, is likely to be a good idea. With a non-work pension it's possible to take 25% out tax free with no adverse consequences and leave the 75% on flexi-access drawdown until age stops work. Similar for work DC, just more potential hassle.

Might be better to do this for you or some for each.

Marcon

stephenadarglas said:

My wife is to leave her current employment with a local authority and take up a part time position with Barnardo's.  They have a DC scheme which they will contribute between 4 and 6%.  My wife will be with them for a maximum of six years (state pension kicks in).  I'd appreciate your views as I understand their old DB scheme was in deficit.  She's leaning towards starting a SIPP and investing there instead.  Barnardo's DC scheme invests circa 60:40 equities/bonds

Rather a lot of DB schemes were and are in deficit, so nothing new there. It has no impact at all on the security of DC benefits - not least because what your wife would be joining is something called a Group Personal Pension (GPP), which is wholly unrelated to the DB scheme. GPPs have a wide range of investment choices, so possibly the 60/40 position you describe relates to a default fund.

With a GPP, members have individual personal pension contracts directly with whoever provides the GPP (usually an insurance company) and there's no way any employer with a DB scheme in deficit and a GPP could access GPP funds to subsidise an ailing DB scheme.