Pension Question

Gareth,

Thanks for info. I was in the scheme for 14 years. As for my departure, I was dismissed, however my solicitor has negotiated a settlement based on compensation, letter of reference and letter of apology from my former employer. Any ideas how I stand re pension rights?

Thanks

OK... it doesn't sound like you've done anything to give your employer cause to withhold your pension rights under any sort of "lien" so you should have full preserved pension rights based on 14 years service. You can leave it where it is or transfer it elsewhere (new employer's scheme, personal pension or buyout policy.) I suggest you take advice before deciding.

Errr.. yes, I know otherwise. ;-)

You need to get a transfer analysis done, which will show the "critical yield" needed to match the guaranteed benefits under the final salary scheme. If the "critical yield" is sufficiently low then it could be good advice to recommend a transfer. Certainly if the process is gone through correctly, with the risks being fully explained and documented there should be no risk of a subsequent mis-selling claim. It may be harder to find an insurer's direct sales force that will give this type of advice, but there should be no problem doing it through an IFA.

And I would have though that if the reason for the transfer was "Client has totally lost faith in his ex employer's ability to look after his money" suitably confirmed, there would be no problems.

I am now of an age where it is supposedly beneficial for me to contract back into SERPS. I am staying out, thank you very much, as I don't trust a future government not to change the rules and cheat me out of whatever it is I am supposed to get.

Tim

"No Flipping" wrote

Eh? Why would that necessarily be so? Doesn't seem unreasonable to me that a particular personal pension could possibly outperform a particular deferred pension in a company final salary scheme...

Your solicitor should have covered that point as well. Ask him.