Final Salary Pensions

[otherman]

b2dan said:

I was just wondering what would happen to my money if this was wound up before I retire (I'm only 23 now so it's a long time off!)

Cheers

b2

Earned years in a final salary (or 'defined benefit') scheme stay earned, even if the scheme is closed. So if you get say, 5 years in then you've earned 5/80ths of your salary at that time, collectable at retirement. You can leave the employer or the scheme and become a deferred member, still entitled to those benefits. Once earned, they stay earned.

[otherman]

-Pete- said:

Do it.

A final salary scheme is a guaranteed amount of income based on your years of service and final salary. A money purchase scheme is a gamble based on the performance of shares, after deductions to pay for the fund managers.

I used to have a final salary pension but we were forced to change it and my pension has roughly halved

When you say it halved, I think it will be your forecast pension that halved. If they made changes to your earned pension that's entirely illegal and you're entitled to have it reinstated, since you would clearly have been wrongly advised.

[-Pete-]

otherman said:

-Pete- said:

Do it.

A final salary scheme is a guaranteed amount of income based on your years of service and final salary. A money purchase scheme is a gamble based on the performance of shares, after deductions to pay for the fund managers.

I used to have a final salary pension but we were forced to change it and my pension has roughly halved

When you say it halved, I think it will be your forecast pension that halved. If they made changes to your earned pension that's entirely illegal and you're entitled to have it reinstated, since you would clearly have been wrongly advised.

Sorry, I didn't explain it properly. We were forced* to come out of the defined benefits scheme and the money was moved into a money purchase stakeholder scheme. The value of my funds halved.