# Employer wants to close our DB Scheme: 30 members and dont have a fund deficit



## Friday (30 Nov 2007)

We are being threatened with closure of our DB scheme. We have about 30 members and we are lucky in that we do not have a fund deficit. Irrespective the employer is adamant to seek closure of the scheme. We are to be offered a DC scheme as replacement. No terms of this have been given to us yet.

The trustees tell us there is little they can do to prevent this. Is there any defence we can mount or is this now simply an industrial relations matter.


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## Red (30 Nov 2007)

*Re: Employer wants to close our DB Scheme*

What are the terms and conditions of employment ? 
Is  DB scheme mentioned as part of it?? AFAIK they can't change your terms & conditions of employment without your consent


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## MMilken (30 Nov 2007)

*Re: Employer wants to close our DB Scheme*

There is nothing you can do to prevent it - there will be a clause in the Trust Deed and Rules stating that the Trustees must wind-up the scheme if the Principal Employer gives them notice to do so.

You are "fortunate" if you are in the position that the Scheme is being wound-up without a deficit.


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## asdfg (30 Nov 2007)

*Re: Employer wants to close our DB Scheme*

You need to establish how the fund is going to be would up. 
How much will each employee get? AFAIA, this should be close to your transfer value that you get with your annual pension statement. 
Can you leave the value in the pension fund and collect your pension at normal retirement age. 
If not, will the transfer value be transfered into a DC scheme? 
What will the charges of the insurance company be on transfering the  money into a DC scheme. Could be 2 to 3 % 
What are the annual charges / Monthly contributions 
Is there a bid /offer spread 
How much will the employer contribute to the new DC pension. 
Will you be expected to contribute.


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## Friday (3 Dec 2007)

It looks like our trustees are right in that there is virtually nothing we can do within the existing framework of the scheme that can prevent the closure of the scheme. 

Contracts of employment refer to a pension scheme. Does not categorise the type of scheme.  

Is the company required by law to enter into a consultation process with the trustees?


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## MMilken (3 Dec 2007)

Not at all - what does the Trust Deed and Tules of the Scheme state under the Clause in relation to Dissolution of the Scheme?


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## Starbuck (4 Dec 2007)

Friday, don't take this lying down!
Our employer attempted to terminate our DB Scheme also. We went to the Pensions Ombudsman and they forced him to retain it.

Contact the Pensions Ombudsman.


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## Friday (4 Dec 2007)

Starbuck, tell me more! Any idea on what grounds you brought a case to the Ombudsman.


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## Starbuck (4 Dec 2007)

The Trustees handled the process for us. They were also given a lot of support by our union, IMPACT. Are you unionised or affiliated?

In the US this kind of behaviour has led to the collapse of several major pension schemes and many employees lost everything. The result of that is a greater burden on the State. Belatedly the US Government realised this and afterward they stopped some companies from restructuring moves which under-resourced or downgraded their company pension schemes.

I think the Pensions Ombudsman in this country took note of what was happening across the pond and has been taking a dim view of such moves over here as a direct result.

Go for it! You've everything to lose if you don't try!


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## MMilken (5 Dec 2007)

The Employer gernerally has a unilateral right to terminate a DB Scheme under a Trust Deed and Rules.

The only way to stop them is by negotiating out of it.

The Pensions Ombudsman cannot intervene when the employer does something it is entitled to do uder the Deed and Rules.


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## Friday (13 Dec 2007)

Our advice is that the scheme rules & deed do  not protect us.

Therefore negotiation seems the only option. We are not unionised though this may well be the result if the employer wants to pursue this course of action.


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## Starbuck (19 Dec 2007)

Sorry to hear thats the case.

Everybody hates Unions.
Until they get screwed over by their employer.


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## Moneymanager (28 Dec 2007)

Suggest you get some professional advice on transfer value to ensure it is fair.

Also, suggest you try to get your employer t consider setting up a group PRSA scheme ( Eagle Star is my preference on performance grounds)
PRSA's are more flexilble & among other things allow you to avoid having to buy an annuity on retirement. Other benefits are you can take 25% of your total PRSA fund including employer contributions tax free on retirement - compared to max of 1.5 time pensionable salary assuming - provided you have 20 years pensionable service.There are benefits for the employer too with a PRSA scheme - less admin / no trustees etc.
Suggest you read an item in the Accountancy December 07 issue ( Business Matters)  which if interested I could email  to you.


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