Final Salary Pension scheme - leave or not?
Discussion
I've been approached by a mob offering advice on my pension. I think they've used my LinkedIn profile to figure out I'm an ex-pat, which annoys me a bit so I'm tempted to string them along for a while. However it has got me thinking.
I suspect they are going to suggest that I pull the funds out of my final salary scheme and put it in another fund. The final salary scheme is the usual: 50% to my spouse if I die once I start taking the pension, can take a lump sum and reduced pension etc etc.
Having done a bit of checking I think the options for taking a lump sum out now and putting it elsewhere are a SIPPS or a QROPS. I'm not sure where overseas because in Australia (which is where I am) none of the big pension funds are QROPS. That means you have to set up your own scheme, get it QROPS certified (which is only possible if all the scheme members are over 55, which I'm not) and then move the money. You also get taxed at 15% on the lump sum when you move it.
I'm wondering what they are going to suggest.
If the health of the scheme is important then my only answer to that is I'm not sure - it does have some issues with funding shortfalls. I haven't even checked if I can pull funds out.
Apart from the mechanics of whether or not I can actually get paid out and then move the money, is leaving a final salary scheme a good idea? I've read good and bad online but the balance seems to be that staying is a better option.
Does anyone have any experience of this, or any advice to offer?
I suspect they are going to suggest that I pull the funds out of my final salary scheme and put it in another fund. The final salary scheme is the usual: 50% to my spouse if I die once I start taking the pension, can take a lump sum and reduced pension etc etc.
Having done a bit of checking I think the options for taking a lump sum out now and putting it elsewhere are a SIPPS or a QROPS. I'm not sure where overseas because in Australia (which is where I am) none of the big pension funds are QROPS. That means you have to set up your own scheme, get it QROPS certified (which is only possible if all the scheme members are over 55, which I'm not) and then move the money. You also get taxed at 15% on the lump sum when you move it.
I'm wondering what they are going to suggest.
If the health of the scheme is important then my only answer to that is I'm not sure - it does have some issues with funding shortfalls. I haven't even checked if I can pull funds out.
Apart from the mechanics of whether or not I can actually get paid out and then move the money, is leaving a final salary scheme a good idea? I've read good and bad online but the balance seems to be that staying is a better option.
Does anyone have any experience of this, or any advice to offer?
ruggedscotty said:
No No No...
final salary pension you stay in, even a bad final salary is much much better than any outside a company, your in a scheme that will probably have the company directors in so they will be ensuring that its performing as best as it can.
Also take proper advice on this and ensure that you are not talking to sharks that are trying to get you out of a scheme to their own where they get commission etc...
Also is it a non contributory pension ? are you getting the benefit of their contributions boosting your own ?
sooooo much in pensions that you really really need to be aware of
I'm always suspicious of anyone offering "free" financial advice because there is no such thing final salary pension you stay in, even a bad final salary is much much better than any outside a company, your in a scheme that will probably have the company directors in so they will be ensuring that its performing as best as it can.
Also take proper advice on this and ensure that you are not talking to sharks that are trying to get you out of a scheme to their own where they get commission etc...
Also is it a non contributory pension ? are you getting the benefit of their contributions boosting your own ?
sooooo much in pensions that you really really need to be aware of
. It appears there are fees involved if I do decide to move (and no doubt commissions as well).The fact it seems impossible for me to move the funds (assuming I could get them) to Aus anyway has already got my alarm bells ringing - I'm expecting a "we'd recommend this fund based in the Cayman Islands" type discussion.
I'm not sure what you mean by "non-contributory" - I left 9 years ago (forgot to mention that bit) so haven't contributed anything since then. However the "final salary" portion is index linked so is going up every year by around 2.7% so far (as far as I can work out).
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