Re: Final salary pension schemes.



No.

It means employees still working won't build up future service benefits in the scheme. They'll still get a final salary pension for past service (though the "final salary" will probably mean the salary when the scheme is closed rather than salary at retirement - upgraded in line with inflation subject to various caps for various different periods - mostly 5% IIRC).
Basically existing members will be treated as if they left employment at the point when the scheme is closed and have the same entitlement to a deferred pension.
--
Andy



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In message

I can't speak WRT Vodaphone, but I continue to receive my FS pension in spite of withdrawal of the FS pension from existing employees at the company I worked for 18 years ago.
At first, most companies began by barring the FS scheme from new starters, but it appears that they are getting away with changing the pension status of all employees, unilaterally. :-(
--
Gordon H
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wrote:

Thanks guys.
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I never quite understood how this is possible since the pension arrangements are part of the contract of employment.
FoFP
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"M Holmes" wrote

I guess it's because the employer could simply set up a new company and transfer the business into the new company, with new pension arrangements for future service?
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wrote:

Contracts have a notice period for termination. After (usually) a "consultation" period, the company issues notice of termination of contracts to all employees, while offering them at the same time a chance to sign a new contract with identical terms except for the pension arrangement. Those who don't sign have their contracts terminated at the expiry of the notice.
--
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Andy Pandy wrote:

What if they're tenured contracts, i.e. where effectively the termination notice period is equal to the time left to retirement age?
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"Andy Pandy" wrote

Surely it's not necessary to go that far, just to change the pension scheme - is it?
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Tim wrote:

If one of the terms of your contract of employment is that you shall upon retirement receive a pension based on final salary and years of service, and the comapny want to move you into something completely different and you don't like the sound of it, I don't see how they can do much else. Well, OK, another thing they could do, which might be enough for their purposes, is to lock you out of all future salary rises, or at least promotions.
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"Ronald Raygun" wrote

Do you know of any companies which have put those terms ("final salary", "years of service", & specific accrual rate(s) ) actually into the contract of employment?
"Ronald Raygun" wrote

Most schemes allow for termination by the employer, don't they?
"Ronald Raygun" wrote

Ah, but what about future accrual? ;-)
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Tim wrote:

All of them I should think. Not verbatim, of course, but there will be a reference to the scheme rules (copy enclosed). Those rules then become part of the contract and cannot be changed unilaterally.
The point of these schemes is that the benefit is defined. This ain't much use if they can just change the definitions willy nilly.

Do they? I'm not sure. I have in mind USS.

What about it? I was presuming that by not having any more salary increases they will reduce their future commitment to funding your pension by enough (because your final salary will be less than it would otherwise have been). They will also enjoy a direct salary saving until your retirement date. Between them, these two ought to let them afford to pay you the pension your original contract guaranteed you.
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"Ronald Raygun" wrote

Yes, but read the Rules carefully - they will include the provision for the scheme to be terminated.
"Ronald Raygun" wrote

It seems to work OK for most people!

"Ronald Raygun" wrote

Well, in the "industry-wide" type schemes such as USS, there will be provision for any individual employer (eg University) to leave the scheme, altho' the scheme would then continue with the other employers instead of terminating.

"Ronald Raygun" wrote

I think that would rather depend on the relative values of past to future service, wouldn't it?
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In the case of USS, it's a question of whether any university could afford to leave the scheme as its share of the deficit would become due immediately.
FoFP
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"Ronald Raygun" wrote

Forgot to mention - note that it would be extremely unusual for members to be given a copy of the Scheme Rules; those are large documents, and instead of giving copies to members, they are given a 'Scheme Booklet' instead. There will be a sentence in the Booklet saying that it is only an indication of benefits, and if there are any differences in the Rules, then the Rules will prevail.
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I believe that you are entitled to membership of the scheme as part of your employment but that the rules of the scheme usually allow the employer to terminate the scheme at their discretion.
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In message

Much of this discussion is academic when there are so many take-overs and mergers.
I worked for ICL, but at one stage they were bought by STC, then we were hived off again, and eventually "merged" with Fujitsu. Then ICL disappeared.
During these moves, a healthy pension scheme surplus disappeared, and the pensioners were divided between three schemes.
Contracts? What contracts? :-)
--
Gordon H
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With the virtual destruction of Trade Union power only the workers who can seriously threaten the economy can protect contracts nowadays.
--
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