My Employer closed off the Defined Pension Scheme, and transferred to a Defined Contribution Scheme. The reason of course was the DB scheme was losing out,due to the financial crisis of 2008. On the subsequent transfer to the new DC scheme, the terms were laid out. In my particular case the contribution from the employer was 15% of my gross salary to the new DC scheme. Initially the contribution was 5%, but after much discussion with the employer it was upped to 15%. Subsequent to this I made AVC contributions to Match the 15%. My DB scheme had only 2 years to run when it changed, so it was important to maximise the Pot of funds.
What to do
1) Approach employer to ascertain what level of contribution they can make, and bargain on that basis
2) Decide if you can make contributions to the funds at a level you can afford
3) If there is a shortfall of your pension pot, ascertain if the employer is able to make up the shortfall.
When you get into the new D.C. scheme it will most likely be managed by a company, independent of Financial institutions, or should be so.
Seek Financial advice from a registered Financial Adviser, not one from the company managing the Funds. It will be worth paying the fee for this advice.
I retired 3 years ago and placed my pot into a ARF/AMRF scheme. I still use the same investment company for ongoing advice on funds for investing in, and on occasion a completely independent Adviser for an overall assessment of the scheme. Remember you will have control of the fund when you retire, so it will be your decision.
To summarise: The D.C. has worked out O.K. as the company made up a shortfall, used an investment firm, and contributed to the Pot when the D.B. Scheme closed.
