My final salary pension has gone
Discussion
As with most companies at the moment my company is stopping its final salary pension scheme. We have been offered an alternative through Standard Life. We contribute a minimum of 3% and the company gives 7.5%.
So, as others, I have gone from a rather nice final salary scheme to a terrible contribution pension which for me, at 29yrs, means a loss of 60% of my pension.
So have the great PH collective got any secrets or other ideas about what to do? I guess investing in property, ISA and such forth is a good idea?
So, as others, I have gone from a rather nice final salary scheme to a terrible contribution pension which for me, at 29yrs, means a loss of 60% of my pension.
So have the great PH collective got any secrets or other ideas about what to do? I guess investing in property, ISA and such forth is a good idea?
Sorry to hear that mate, god they're dropping like flies aren't they.
I in a FSS too but you simply can't reply on getting the bloody thing ever, I just ignore it and have my own savings pot.
Usual stuff really, max your ISA every year, mix of funds covering different markets and commodities and of course some property.
Diversifying your risks in a key theme though.
I in a FSS too but you simply can't reply on getting the bloody thing ever, I just ignore it and have my own savings pot.
Usual stuff really, max your ISA every year, mix of funds covering different markets and commodities and of course some property.
Diversifying your risks in a key theme though.
it was a taboo but it's been broken recently. Or have they put the old pension as a deferred pension which will stay there as a pension based on x/60ths of today's pensionable salary? Rather like if you left the company and didn't transfer to a new scheme.
That is the norm for many schemes.
If however they really have sold the whole caboodle to Standard Life that is indeed a bugger.
You need advice and not from the internet I fear.
That is the norm for many schemes.
If however they really have sold the whole caboodle to Standard Life that is indeed a bugger.
You need advice and not from the internet I fear.
Do I understand that you have 29 years of service? If so you should have a preserved final salary pension for those 29 years and the remainder of your service will be in a defined contribution scheme. I was in a final salary scheme that closed when the company was sold to another firm that already had a scheme in place. I left, for various reasons, and now look forward to a final salary pension based on my years of service prior to the closure and an extrapolated 'final salary'.
VERY unlikely they'll have got rid of the whole caboodle to Std Life. If they trigger wind up of the scheme they are required by law to secure all members' pensions 100%. More likely they've closed the scheme to future accrual. If the scheme is in deficit (it probably is) the employer will continue to fund this deficit, so although your new group personal pension with Std Life is "only" a 7.5% employers contribution, you'll also "benefit" from having your accrued FSS scheme secured. The employer's contribution to the closed scheme could be significant.
Bear in mind that that the FSS scheme was probably contracted out, so you'll start to accure state second pension going forward too. Not all bad news and at least the new pension is your property.
I'm not going to go all political, but if the Chancellor had listened to the pensions industry over the past ten-ish years.......
Bear in mind that that the FSS scheme was probably contracted out, so you'll start to accure state second pension going forward too. Not all bad news and at least the new pension is your property.
I'm not going to go all political, but if the Chancellor had listened to the pensions industry over the past ten-ish years.......
I paid into a private pension for 6 years until I went into my companies final salary pension.
My original pension which is frozen will be worth an estimated grand total of £385 PA when it matures in 17 years.
A friend of mine who is a pensions manager for a very large American company said I would have been better off putting the £50 contribution on the horses each month.
My original pension which is frozen will be worth an estimated grand total of £385 PA when it matures in 17 years.
A friend of mine who is a pensions manager for a very large American company said I would have been better off putting the £50 contribution on the horses each month.
wolves_wanderer said:
Isn't it great that we have to give up our pensions but the civil service only have to threaten strikes to keep theirs?
Funny how someone losing their private sector FSS is viewed as bad and they get sympathy but if/when the public sector lose theirs people will be dancing on the street.
Schadenfreude?
One of the reasons people take crappy public sector jobs is the good pensions. Taking them away is just a kick in the balls.
The overexpansion of the public sector by the current labour government is another matter entirely of course.
By the way I do have a public sector FSS (university superanuation scheme), but it is privately administered and not paid out of the tax pot. I'm going to get 3.5/80 of SFA!
Extra 300 Driver said:
Do I understand that you have 29 years of service?
No I have 4 yrs service, I am 29 yrs old.
My final salary one has been frozen after 4 years.
ahh bless! for a minute i thought you were some hard done by old timer!
if you are that bothered about a DB pension go and join the council!
DC pensions are ok for what they are. at least you know what's in it and you still save on income tax compared with savings...
btw that pension sounds fine and quite competitive . i pay 4% and they pay 8% so it's similar to that.. that should still pay a real £10k pa even if i stay at the level i am now and i, obviously, hope to get a good bit more senior in the next 40 years...
timmy30 said:
Sorry to hear that mate, god they're dropping like flies aren't they.
I in a FSS too but you simply can't reply on getting the bloody thing ever, I just ignore it and have my own savings pot.
Usual stuff really, max your ISA every year, mix of funds covering different markets and commodities and of course some property.
Diversifying your risks in a key theme though.
Ah my Friend Timmy30....... agree with the isa's but No no no... Put your money in Property, commercial with residential above is the way to go. All in one pot otherwise nothing will do well. master of one - jack of many.
Im sure Timmy30 and I will be having a donut bet in 25 yrs time to see how our outlooks on investments have worked !
Everywhere is at it - and yes the Civil Service are looking after their own with taxpayers money very well!!! My commiserations.
7.5% company contribution isn't that bad, though, for a defined contribution scheme.
Unfortunately, it's about half what they were likely paying into the defined benefit scheme.
You shouldn't be too badly off, if you think things through:-
1) You started your pension aged 25 - so you're doing better than many.
2) While this pension won't be worth loads, you can plan for the future.
3) At your age, I'd suggest (not professional advice, just someone financially literate who's done the same sums) a minimum of 15% combined contributions (employee and employer...so invest another 4% of your salary somewhere) from age 30 onwards. Can spread the investments to hedge risk - ISA's are apparently a good bet...and 4% of your salary, I would guess, will be less than the £3k threshold.
7.5% company contribution isn't that bad, though, for a defined contribution scheme.
Unfortunately, it's about half what they were likely paying into the defined benefit scheme.
You shouldn't be too badly off, if you think things through:-
1) You started your pension aged 25 - so you're doing better than many.
2) While this pension won't be worth loads, you can plan for the future.
3) At your age, I'd suggest (not professional advice, just someone financially literate who's done the same sums) a minimum of 15% combined contributions (employee and employer...so invest another 4% of your salary somewhere) from age 30 onwards. Can spread the investments to hedge risk - ISA's are apparently a good bet...and 4% of your salary, I would guess, will be less than the £3k threshold.
superlightr said:
Sorry to hear that mate, god they're dropping like flies aren't they.
I in a FSS too but you simply can't reply on getting the bloody thing ever, I just ignore it and have my own savings pot.
Usual stuff really, max your ISA every year, mix of funds covering different markets and commodities and of course some property.
Diversifying your risks in a key theme though.
Ah my Friend Timmy30....... agree with the isa's but No no no... Put your money in Property, commercial with residential above is the way to go. All in one pot otherwise nothing will do well. master of one - jack of many.
Im sure Timmy30 and I will be having a donut bet in 25 yrs time to see how our outlooks on investments have worked !
to be fair though
you should max out your isa every year. apart from anything it's very liquid - try getting your money out of a house in a dodgy market.. i agree we should all try and invest in property but as you say diversification is the key. risk spreading if you like..
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