Works pension

Willow_70

Hi, I have a query about my works pension.
in my old job I was off long term sick & got diagnosed with ms. My work offered me a redundancy package which I took.
My pension will be substantially much lower than my co workers. 

One of my ex work mates pension is over double per month than mine and she has 5 years service whilst I have 16 year service.
is there a chance my employer took their contributions back. ? And could the redundancy package I thought I got been taken out my pension pot too? 

JoeCrystal

Not really enough information regarding your workplace pension scheme.

Is it a DB pension scheme in which your pension is based on your length of service and salary, or is it a DC pension scheme in which you got a pension pot in which you invest the money in the various funds on the market?

Are you applying for Ill-health retirement if it is a DB pension scheme? Frankly, it would be best not to care about what your ex-colleagues make or get, especially since this has no bearing on the matter. Knowing what kind of scheme it is and what you can do or not do with them matters.

If it is a DC pension scheme, generally, any contributions made into your workplace pension scheme are yours to keep unless there are contributions errors relating to tax relief or overclaiming on tax relief, but that is generally rare.

So again, what are the conditions and terms relating to redundancy packaging on pension schemes in this case? Do your scheme booklets, statements or paperwork have anything to say?

comeandgo

There could be a few reasons why there is a difference.  Maybe your work colleague transferred some previous pension pot to this employer, maybe they paid in over and above the minimum percentage.  

dunstonh

Hi, I have a query about my works pension.

What type of works pension?
If DB, then they are based on years of service.
if DC, they are based on what is paid in and where you invest.    DC schemes will usually be different as you get to choose how much you pay in and where it is invested.

Willow_70

Hi thanks for your replies,
I think it’s a DC pension. I know money came off my wages every week and the company I worked for matched it. 

I did that for 16 years and my work mate done it for 5 years then left the company.
My work mate hadn’t paid anymore than me into her pot or transferred another pension.
So I don’t understand how my pension is so low.
she would get (once we turn 55, which is only a couple of years away, so that’s why we were looking at it)
She would get over double a year than what my pension says and she could take a massive large sum of money which is 25% tax free at 55 then her yearly pension and that still works out more than mine even if I didn’t take 25% at 55, it doesn’t even give me that option when I log on to my pension account.

can you lose your pension if you leave your work for ill health.?
what I was led to believe was that they gave me my redundancy as a good will gesture, because they felt sorry for me. 

Brie

It may be that the projections she has received is based on her continuing to pay in (one of my providers did this and got my numbers badly wrong) while yours is based on your actual service. 

any prospect of you applying for ill heath pension now so you'd be getting your (potentially) full pension years earlier than expected?

can you lose your pension if you leave your work for ill health.? 
 NO.  pension is yours not the company's so it's up to you to decide how and when to take it not them.

what I was led to believe was that they gave me my redundancy as a good will gesture, because they felt sorry for me. 
That would be a good thing to check up on perhaps just so you know.  It might have been a payment to ensure that there would be no grounds for unlawful dismissal rather than a pity payment.

MallyGirl

she might have different investments - not everyone stays in the default option. Much more likely that the projection assumes her continuing to contribute till retirement age as @Brie says

Linton

Willow_70 said:

Hi thanks for your replies,
I think it’s a DC pension. I know money came off my wages every week and the company I worked for matched it. 

I did that for 16 years and my work mate done it for 5 years then left the company.
My work mate hadn’t paid anymore than me into her pot or transferred another pension.
So I don’t understand how my pension is so low.
she would get (once we turn 55, which is only a couple of years away, so that’s why we were looking at it)
She would get over double a year than what my pension says and she could take a massive large sum of money which is 25% tax free at 55 then her yearly pension and that still works out more than mine even if I didn’t take 25% at 55, it doesn’t even give me that option when I log on to my pension account.

can you lose your pension if you leave your work for ill health.?
what I was led to believe was that they gave me my redundancy as a good will gesture, because they felt sorry for me. 

The company cannot take money away from a DC pension so something else must be happening.

Have you compared the current pot sizes?  Dont believe any projection given on the annual statement about what the annual pension could be. The projections are based on pessimistic assumptions specified by the regulator and also are stated in today's prices -  assumed future inflation is taken off the values.  Can you tell us the 2 pot sizes?

How long is it since you left the company? Did your workmate leave at the same time? Were you both members of the ocmpany pension scheme for all the time you worked there?

DC pensions are invested in funds of shares and other assets.  It could be that you friend's pension has used different types of fund to yours.  It could be worth checking.

Do you have any old paperwork on your pension to show how its value has changed over time?

The problem is that without detailed information the best people can do here is to guess.  But it is very difficult to see how a pension based on 5 years employment could be so much larger than one based on 16.

Marcon

Willow_70 said:

Hi, I have a query about my works pension.
in my old job I was off long term sick & got diagnosed with ms. My work offered me a redundancy package which I took.
My pension will be substantially much lower than my co workers. 

One of my ex work mates pension is over double per month than mine and she has 5 years service whilst I have 16 year service.

All sorts of reasons you could have different pensions. Summarising the comments above:

1. Your former colleague is still contributing to this pension scheme and her projections are based on the assumption that she will contribute until age 66 (or similar)
2. Your former colleague has higher earnings than you had, especially if you were on sick pay and your contributions were based on this rather than your normal full salary
3. Your colleague chose different investments within the pension scheme, and these performed better than the ones you chose
4. Your colleague chose to make extra contributions which the employer may or may not have 'matched' (paid in more)
5. Your colleague is in a different scheme from the one you were in (employers don't always keep the same scheme)

Sometimes people aren't quite sure what they've done, especially when it comes to pensions, so comparing yourself with someone else is often unhelpful. 

The other possibility is that your benefit statement is wrong, or hers is.

Willow_70 said:

is there a chance my employer took their contributions back. ? And could the redundancy package I thought I got been taken out my pension pot too? 

No and no.

Silvertabby

Such a huge difference in your pensions, based on the information you have given,  can't be right.  

Is it possible that your friend has misunderstood her pension forecast?

Bimbly

Your colleague may have transferred in a pot from a previous employer? Giving them a bigger pot than you.