# Defined Benefit Pension Closing



## CD2005 (10 Sep 2012)

Hi,
Friend has heard that her defined benefit pension is closing with only 4 years left till retirement.....
What can she expect to be offered by the pension/company. Obviously with 4 years left this is a massive blow. we have read the ombidsman site but its all a bit overwhelming without any "actual" case's of what people are doing. 
Can the compnay do this? Can she buy the 4 years?
Anyone help


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## LDFerguson (15 Sep 2012)

CD2005 said:


> What can she expect to be offered by the pension/company.


 
She will be offered a cash value for her pension entitlements, known as a transfer value, which she can then transfer into some other form of pension arrangement, depending on what her plans are for the next four years. The amount she receives will depend on the size of the deficit in the scheme's finances. Unfortunately the transfer value won't buy her the pension she was expecting. It will buy her a lower amount. 



CD2005 said:


> Can the compnay do this?


 
If neither the pension scheme nor the employer have the money to keep the scheme solvent and have followed all the correct procedures regarding the wind-up of a pension scheme, then yes they can. 



CD2005 said:


> Can she buy the 4 years?


 
No. 

Unfortunately around 80% of Defined Benefit pension schemes in Ireland are in deficit so I'd expect that the incidence of such schemes being wound up is likely to become more common over the next while. 

Liam D. Ferguson


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## Billo (10 Oct 2012)

CD2005 said:


> Hi,
> Friend has heard that her defined benefit pension is closing with only 4 years left till retirement.....
> What can she expect to be offered by the pension/company. Obviously with 4 years left this is a massive blow. we have read the ombidsman site but its all a bit overwhelming without any "actual" case's of what people are doing.
> Can the compnay do this? Can she buy the 4 years?
> Anyone help



Is the defined benefit closing for all members or just for new members ?


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## millieforbes (10 Oct 2012)

As Billo said above, the first step is to find out what the company mean by saying its closing, many companies first close the scheme to new members, then close the scheme to new accruals, these options mean some of your friends benefits will be preserved (at least for a time)


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