Company Pension

[bigjoe_dub]

I have been with my present employer over 10 years now.

I have a DB pension with the company that they and I have been paying into since day one.

About 4 years back any new starters were put onto a DC scheme.


Now all of us on the old DB scheme are been told that this scheme will cease at the end of the year and we will be transferred to the DC scheme instead.


Simple question, are they allowed to do this legally?

 

[Baracuda]

Simple answer is Yes! About 80% of DB pension's are currently underfunded. As a result the trustee's have to submit a proposal to the Pension's Board on how they are going to plug the every widening hole, the trustee's have 3 options

1) ask the employer/employee to increase their contributions

2) seek to reduce the promised benefits at retirement

3) if neither of the above options are approved by employer/employee the trustees or Pension's Board may seek to have the scheme wound up.

It is now quitely accepted that most DB schemes are no longer fit for porpose as long term asset values have not met expectations over the last decade and people are living a lot longer albeit with a lot of medical intervention.

 

[bigjoe_dub]

Thanks Baracuda, appreciate that.