My employer is taking away my WYPF DB pension and moving me to a DC pension scheme....

Hoenir

Silvertabby said:

Hoenir said:

The Pension Scheme trustees are ultimately responsble for the scheme. Is there a material level of underfunding? 

No.  The issue will be the employer contribution, which will be anything up to 30% of the employee's salary.  Not the first time that a small employer has decided that remaining in the LGPS is unaffordable, and sadly won't be the last.

30% contribution levels aren't just to fund current members pension but also to narrow the long term scheme deficits that exist as well. 

daveyjp

Hoenir said:

Silvertabby said:

Hoenir said:

The Pension Scheme trustees are ultimately responsble for the scheme. Is there a material level of underfunding? 

No.  The issue will be the employer contribution, which will be anything up to 30% of the employee's salary.  Not the first time that a small employer has decided that remaining in the LGPS is unaffordable, and sadly won't be the last.

30% contribution levels aren't just to fund current members pension but also to narrow the long term scheme deficits that exist as well. 

There are no long term scheme deficits with LGPS, it is fully funded and can pay all existing and  liabilites.  At the last actuarial assessment it had 108% of assets required to meet its liabilities.

Marcon

CDunn911 said:

...... I am substantially worse off but it is also difficult to present a reasonable compensation offer. Has anyone been through anything similar or can anyone offer advice or know someone who can?

Thanks

What makes you think you're going to be offered any 'compensation'? You won't have a contractual entitlement to a DB pension for the whole of your employment, and any number of people will have been through a similar unwelcome exercise.

I'm afraid the only 'remedy' here is to vote with your feet if you don't like the move - which I can quite understand. 

GenX0212

Went through similar many years back. Our scheme rules even had a clause saying that the employer could not amend the scheme rules to the detriment of its members unless the members voted in favour by a 2/3rd majority- which obviously no one did. They simply manoeuvred around that by creating a brand new scheme and closing the old.
I tried to fight every way possible, direct with the Company, by harassing and haranguing Union reps, even eventually taking a complaint to the Ombudsman and then a further complaint about the Ombudsman's response itself - they were completely uninterested. it caused me massive stress for several years until I finally accepted there was nothing more that could be done (unless you have a few spare millions to take it to the high court and beyond).
Sickening as it feels my best advice would be to not to dwell on it and be thankful that you have at least built a level of deferred DB pension.

penners324

DB schemes are an anachronism of the past. I'm surprised any private company still has one.

enthusiasticsaver

My husbands DB scheme was withdrawn in 2014 and the benefits frozen and then converted to DC scheme from then on.  However there was a very good compensation scheme where if employees paid in 10% of their salary the company would double their contribution to 20% and it gradually reduced over 5 years I think it was until eventually they matched at 10%.  Is there no compensation scheme being offered at all? 

hyubh

Marcon said:

CDunn911 said:

...... I am substantially worse off but it is also difficult to present a reasonable compensation offer. Has anyone been through anything similar or can anyone offer advice or know someone who can?

Thanks

What makes you think you're going to be offered any 'compensation'? You won't have a contractual entitlement to a DB pension for the whole of your employment, and any number of people will have been through a similar unwelcome exercise.

I'm afraid the only 'remedy' here is to vote with your feet if you don't like the move - which I can quite understand. 

I can't see any place where the OP claims they are 'entitled' to compensation. However it is true that switching out active membership of the LGPS (if that's what it is) for AE DC would be a massive drop in the overall renumeration package. And it's pretty common for some sort of arrangement to happen to get preferable DC terms for employees kicked out of a closing DB scheme (ditto keeping a final salary link, though that wouldn't be possible if this is LGPS rather than the employer's own scheme). 

hyubh

daveyjp said:

Hoenir said:

Silvertabby said:

Hoenir said:

The Pension Scheme trustees are ultimately responsble for the scheme. Is there a material level of underfunding? 

No.  The issue will be the employer contribution, which will be anything up to 30% of the employee's salary.  Not the first time that a small employer has decided that remaining in the LGPS is unaffordable, and sadly won't be the last.

30% contribution levels aren't just to fund current members pension but also to narrow the long term scheme deficits that exist as well. 

There are no long term scheme deficits with LGPS, it is fully funded and can pay all existing and  liabilites.  At the last actuarial assessment it had 108% of assets required to meet its liabilities.

Actuarial practices vary quite a bit, so figures aren't always commensurate. However it is true LGPS funding levels have sharply improved recently, like for most DB schemes (witness the USS shenanigans...). This though actually makes getting out more not less attractive, since exit valuations (LGPS) or buy in or buy out prices (private sector schemes) will likely be more favourable for the employer. 

Pat38493

When my company decided to shut down the DB scheme in 2008 and force everyone onto a DC scheme, I challenged it based on that fact that my original work contract specifically stated that I would be in a pension scheme that provided a guaranteed benefit with the proportions in the actual contract.

They told me that if I refused to accept it I was effectively resigning from the company.  I am not sure if that was legally correct, but rightly or wrongly I chose not to hire a solicitor to investigate, partly because none of my other colleagues seemed bothered, even when you pointed out that this was like a big pay cut.

GunJack

It's a common thing these days unfortunately.... our DB moved to DB CARE around 7-8 years ago, and is closed to future accrual from this April. We are being moved to the company DC scheme which was the default for new starters from 2007, but has been enhanced to allow for the influx of ex-DB staff.

It's not a bad deal to be fair, 8% employee gets 15% company contributions (the DB was 7.5% so hardly any personal difference) and sal sac remains. Also, for us ex-DB people a starting bonus of 15% of salary into the DC. The DB becomes preserved, with CPI(max 5%) + 1% revaluing until NPA. Actually works quite well for me personally, as all my previous provision is DB (20 yrs CS, 17 yrs in current) so the 6-ish years of DC will nicely bridge between actual retirement and company and SP being paid