Couple of questions

busy_builder

I have a deferred pension with Trafalgar House Pensions (was Kvaerner) and have asked for a pension entitlement quote as I'm now 50 (comes around quick doesn't it !!).

As they supplied me the figures they are reducing the amount by 47%. I want to wait as I don't need the money, but my wife says a bird in the hand...so I don't know what to do now, I don't trust THP as I was a Nominated Trustee way back in 1998/9 and saw how they operated.

Anyway I have been told that the pension rules have changed and my pension is now protected under new legislation but have no idea what that is and how it applies to me....so any ideas and is my pension really protected ??

Also now I have a quote for early retirement can it go down as well as up if I leave it for a couple of years to increase (through lower reduction/annual increase) ??
TIA

EdInvestor

The info you need should be here:

http://www.pensionprotectionfund.org.uk/

busy_builder

Thanks EdInvestor

Looked through the list but neither KPP/KPF or THP are listed. Must be something else, I was told it was some new legislation but wasn't told what ?

EdInvestor

Perhpas the FAS? THis affects pensions which were affected earlier.

http://www.dwp.gov.uk/lifeevent/penret/penreform/fas/

busy_builder

Perhaps this has something to do with it

Against that backdrop, what did surprise some observers last week was the Regulator's approval of a controversial deal allowing a company with a £252m pension deficit to sever all responsibility for the fund in return for a fixed payment of £101m over the next five years.
This little-noticed move was the first time such a deal has been agreed - and could serve as a template for other companies with big liabilities.
The Kvaerner UK pension fund has 32,000 members. The bulk of them originally worked for Trafalgar House - which was acquired by Norway's Kvaerner shipping group in the mid-1990s.
The gist of this new Regulator-backed deal is that the pension fund now becomes a stand-alone entity, with no company or sponsor behind it - a most unusual situation for a final salary scheme.
Some see this as a climb-down by the Regulator. "We've returned to the bad old days," says independent pensions expert John Ralfe. "Kvaerner has turned its back on a huge pension deficit. What they've said they will pay isn't nearly enough."
It is certainly true the agreed £101m pension contribution won't plug the £252m hole. That sounds like bad news for Kvaerner's UK workforce in Aberdeen, Warrington, Portsmouth and Middlesbrough.
But judging the details of the deal isn't easy. After nine months of haggling, the parties involved - the company, trustees and the Regulator - aren't talking.
But one source close to the negotiations told me this "ground-breaking deal" was "the best possible outcome" for members. "The alternative was to receive nothing from Kvaerner and put the scheme in the Pension Protection Fund."
The PPF is an industry-funded safety net, designed to safeguard members' interests when schemes go bust. But it pays only limited benefits, with no indexation. The new arrangements at Kvaerner, the trustees hope, will allow them "to pay members' full benefits over the long-term".
How so? The fund hopes to grow its way out of trouble - continuing to pay out members' pensions, while trying to tackle the deficit. With no further company contributions in prospect, that puts enormous pressure on the trustee's investment strategy.
The high annual growth required - an estimated 3.5 per cent above the return on gilts - can be achieved, the trustees hope. The fund will be making considerable use of "swaps" and other derivates to protect existing assets.
I accept this deal was cut in good faith. But what if the investment bets don't work? A £252m shortfall in a fund worth £1.2bn is a lot of ground to make up. And, alarmingly, a senior Kvaerner executive told a Norwegian newspaper last week the deficit could be £800m.
If this strategy does fail, the scheme will need to fall back on the PPF in several years' time. But pension schemes can only do that as a result of their parent company being declared insolvent. This Kvaerner fund now has no parent.
More importantly, this deal sets a dangerous precedent. Other companies could propose writing cheques for a fraction of their pension deficits in return for being able to walk away. Pointing to Kvaerner, they can tell trustees and the Regulator that ever more exotic investment strategies can be used to address the shortfall.
In that sense, our new "safe" pensions environment - where the Regulator can force companies to make good their pension promises - may just have become more dangerous.