# Company moving from DB to DC Pension



## JudgeDredd (15 Jun 2010)

The company were I work is now trying to persaude the remaining employees on DB pension to move to DC!

As an "incentive" they have stated that as the DB fund is in deficit ,if we wish to remain with it we will have to double our contribution with reduced benefits!

The compant is extremely profitable and the deficit could easily be picked up however  I feel the company is using the economic climate to intimidate people to move.

The main bone of contention for me is the increased premiums for lesser benefits, also I wonder contractually if the company can do this?


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## Deas (16 Jun 2010)

If it was me I would double my contribution for reduced benefits in the DB scheme.  This is much better than the equivalent DC scheme; particularly if you have any length of service.  The fact is that it is your pernsion, not the company's.  If you want to retain it you should, and the decision is yours and most likely how this decision can be made is defined in the Trust Deeds.


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## JoeRoberts (20 Jun 2010)

This is primarily an Industrial Relations issue and should be aproached in this manner. Most DB schemes can be closed if the Company so wishes. Then it's up to employee representatives to negotiate how accrued pension to date is secured and what the replacement scheme will be.


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## JudgeDredd (21 Jun 2010)

Thanks for your response!

I realise morals don't come into things but it is particularly galling that the company is using the justification of the economic downturn yet is itself still extremely profitable!


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## murp (3 Aug 2010)

I wouldnt necessarily write off the idea of moving from a DB to a DC arrangement that quickly, depending on the level of deficit and other factors that DB arrangement could become a very pricey arrangement going foreward, and as joeroberts states its typically well within the company's power to cease or wind up a scheme.


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## Don_08 (3 Aug 2010)

Deas said:


> If it was me I would double my contribution for reduced benefits in the DB scheme.  This is much better than the equivalent DC scheme; particularly if you have any length of service.  The fact is that it is your pernsion, not the company's.  If you want to retain it you should, and the decision is yours and most likely how this decision can be made is defined in the Trust Deeds.



There is no way you can compare the two from the information given above. We would need to know accrual rate, salary definition, proposed contributions to dc scheme, NRA, age and salary of op and most important of all the funding level of the current db scheme.

At the moment I would much prefer to be on any sort of dc scheme than a poorly funded db scheme with a large portion of pensioners. With a dc scheme your pension pot is yours no matter what, with db you could find yourself with nothing if an employer triggers a wind up no matter how long the service is. 

It is not helpful in these boards to use the blanket union approach that db is better than dc. Each case needs to be looked at individually.


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