Taking DB pension while still working

Pat38493

Hi,

I have several pension schemes, one of which is a DB scheme from my old company - the scheme was frozen in about 2009 I think, and then after several top ups, in 2020 the pension scheme was put in a "buy in policy" with Aviva, "placing the bulk of the plan assets in an insurance policy".  At the same time it was moved to a sole trustee model.  I have to confess I am  not really sure what this means but I spoke to one of the trustees at the time and he assured me this would make it safer rather than less safe.

Does this mean the pension is completely separated from the company I work for, and therefore I could, in theory at least, start taking the pension whilst still continuing to work for the same company where the pension came from?  I realise this might be crazy as I would pay potentially higher rate tax on the whole pension income but I am just curious about it?

My impression these days are that all pensions are irrelevant as to whether you continue to work or not, excepting for some public service ones like NHS which may limit your ability to return to the exact same job immediately?

Brie

Completely possible.  In fact my employer allows people to take benefits from their DB pension and contribute to the newer DC scheme while working.  It should all be outlined in your benefits.

Thrugelmir

Have you been issued with a buy out policy in your own name that guarantees the benefits? 

Pat38493

Thrugelmir said:

Have you been issued with a buy out policy in your own name that guarantees the benefits? 

I don't think so that I am aware of - I have a letter which basically says as I wrote above - they have secured a "buy in" policy with Aviva which puts "the bulk" of the plan into insurance and they have appointed new sole trustee company to "complete the process of insuring the benefits in the plan".

This letter was from November 2020.  I don't recall receiving anything more on this topic since - I got some other correspondence from them about a proposal to make some kind of technical adjustments related to years that were contracted out or suchlike that they claimed should not have any effect on the pension I would receive, and I recently got from them a benefits statement based on a scenario I requested.

Marcon

Thrugelmir said:

Have you been issued with a buy out policy in your own name that guarantees the benefits? 

The scheme hasn't been bought out - a buy in is the usual preliminary to such a step. Even when it does move to a buy out, members are unlikely to get individual policies, given that it's a DB scheme. A buy-in is simply an investment contract and the trustees retain legal responsibility for the payment of members' benefits. Under a buy-out, the insurer takes legal responsibility for paying monthly pensions directly to each individual scheme member.

OP - doesn't sound as if there is anything at all to worry about. Nothing to stop you taking your DB pension while you are still working, assuming the rules let you take your pension early. If you've already reached the scheme's normal retirement age, then you are entitled to take the benefits regardless.