Key Post: Pensions - Actuarial valuations

Re: frs17 and equalisation

Hi TV

FRS17 does not give an employer the right to retrospectively change how its pension scheme works from defined benefit to target benefit. FRS17 is an accounting standard and how the company prepares its accounts is generally not of concern to the employees (provided they are fair, honest, etc.).

How it operates its pension scheme is however a matter of fundamental importance to the employees. A company cannot use an accounting standard as justification for a retrospective change in employees' entitlements.

You should seek further clarification from your employer of what exactly is going on in relation to the pension scheme. If you don't like the answer, talk to the trustees. If you get no satisfaction from the trustees, talk to the Pensions Board.

Regards
Homer

frs17

thank you for this - it puts the mind at ease but it also means that the employers will use any technicality to change employees entitlement - same mindset as what was done in respect of equalisation of nra for females - however I understand they are still fight.

Re: frs17

Hi TV

Be careful you're not jumping to conclusions. I know that it sounds like the employer is trying to pull a fast one, but you may be getting the wrong end of the stick. You should make sure that you're aware of all the facts before accusing them of using a technicality to change employee entitlements.

By the sound of things, you've totally lost trust in your former employer and that in itself may be sufficient reason to take a transfer value rather than remain in the fund.

I suggest that you write to them asking for a statement of your options and keep a copy of the letter as proof that you requested the information. When you get a response from them, you will be in a better position to decide whether or not to take the transfer payment and whether you are being offered less than your full entitlement under the rules of the plan.

Regards
Homer

transfer value

I am not the only one - have written twice and still no reply

changing the benefits due to FRS17

I have been reading the above. My scheme has done exactly what has been described. The company accounts now state that the scheme is a target benefit scheme to comply with FRS17 and the company has stated that the scheme is now a target benefit scheme and therefore not guaranteeing the two thirds pension if the funds cannot meet this. The scheme provides for the deficit to be made up by increased contributions but the employers are stating that they have no liability. The scheme is in the state sector.

frs17

my company has now said that the frs17 has meant that the pension scheme as far as they are concerned is a defined contribution -
previous annual accounts stated defined contributions

can they do this?

Also is there any chance that FRS17 will be changed for this years accounts so that this nightmare situation can be dealt with?

Re: frs17

This whole discussion baffles me.

I don't see how any employer, public sector or otherwise, can use an accounting standard as justification for retrospectively disimproving someone's conditions of employment.

Most trust deeds allow the employer to amend or discontinue the scheme at any time, but subject to members retaining their accrued rights in respect of service prior to the change. That does not prevent an employer from seeking the employees' consent to a change in how their accrued rights are determined (for example, by accepting a defined contribution transfer in exchange for your accrued rights), but they should not be able to do this without the employees' consent.

As regards FRS17, the full implementation has been deferred, but it is still required as a disclosure item in company accounts. Whether it will be abandoned in time to save what remains of the defined benefit market remains to be seen.

Regards
Homer

Bumped by ajapale