What happens to pension contribution.

The message from Alasdair contains these words:

Happened to me when I left GEC circa 1970. I got my contributions back, GEC got theirs. There was a residual contracted out pension to be had

That's stupid you should have got the lot. It's very unfair if you didn't nordering on illegal IMO. Humanr right - right to a fair trail. That's clearly unfair.

Most public sector pensions I looked at had such a provision for small pensions. My recollection is that it only happened if you had been in the scheme less than two years though.

Neb

Employer's contributions are made into the pension fund as a whole, not into a portion of it specifically set aside for particular employees. So, when you leave, you are only entitled to a rfeund of your own contributions. The employer's contributions remain in the fund to pay for all the benefits the fund has to pay out.

Roger posted

IPC did it to me in the 1980s after I had worked there five years. It was legal then - company pensions funds could make up their own rules almost without limit. But the law was changed a few years later to make it only permissible if the pension value was very small. I don't know the threshold, but it might well have been above a part-time dinner lady's pension.

"Alasdair" wrote

How long ago was this, and how long had she actually been in the scheme for? (eg might not have joined the scheme until a while after starting work).

For leavers prior to 6/4/88, return of contributions could only be offered if scheme membership was below five years (this changed to two years from 6/4/88).

"Alasdair" wrote

Depends whether it was actually 'funded' or not(!)...

If funded, they would have stayed in the scheme fund. If unfunded, they would have already been used to pay for the pensions of pensioners in the scheme at the time the contributions were paid!

"Nebulous" wrote

Yep, that's true for leavers from 6/4/88. But earlier leavers could be given a refund of contributions for anything less than 5 year's scheme membership.

"Les Invalides" wrote

... only if you'd been in the scheme for *less* than five years.

"Les Invalides" wrote

Don't be silly - of course they couldn't!

"Les Invalides" wrote

For leavers on/after 6/4/88, the five-year limit was dropped to 2 years.

"Roger" wrote

I doubt it ... GEC's contributions would usually be left in the scheme.

"Roger" wrote

Sounds a bit like a CEP ("contributions equivalent premium")...

"Lord Turkey Cough" wrote

You obviously don't know what you're talking about.

Tim posted

Well, I'm very sorry. I'm only quoting what the IPC fund trustees told me when I complained. They said I had no case because they could choose to apply any rules they wanted. Indeed they had changed the rules a year or two previously, increasing the time limit to five years from the two or three years it had been when I joined.

The two-year limit was grossly unfair too, given the turnover in the industry (publishing has always been a very uncertain career). Effectively they were robbing one class of members to pay large pensions to another.

However, IIRC, at the same time the law changed to stop employers forcing their employees to join their pension schemes. That was what really rubbed salt into my wounds; IPC *forced* me to join the scheme, thus preventing me (by the rules of the time) belonging to any *other* scheme; and then they refused to give me any benefits whatsoever. Incredibly unjust. The funny thing was that the trustees couldn't see anything unjust about it.

Usual generalisation s**te from Norman which is just untrue - it will depend on the Ts&Cs of the particular pension fund.

Actually, he was quite right above. He is, of course, talking about final salary (type of defined benefit) schemes, and NOT any type of money purchase (defined contribution) scheme. But that's OK, because she worked "... as a School Meals Assistant for a local authority" -- hence public sector scheme.

wrote

I think you mean "the Trust Deed and Rules", rather than 'Ts&Cs' ...

Clues: 'local authority', 'many years ago'.

What I said is how it worked.

That is the point - *if* he had said final salary schemes then he would have been - but he didn't - hence my use of the word "generalisation".

(It was probably what was known as a local authority superannuation scheme - and part of the rules of the scheme were that you only got back your contributions when you left)

You have devel Employer's contributions are made into the pension fund as a whole

You should have said: "Employer's contributions are made into *some* pension funds as a whole"

I can see why so many people "misunderstand" what you post here.

"Les Invalides" wrote

No they couldn't, as you well know (see below).

"Les Invalides" wrote

Exactly. There is the limit. That's what the law said. They could hardly "choose to apply any rules they wanted"!

"Les Invalides" wrote

"Les Invalides" wrote

How were they robbing you? You got back all the contributions that you had made, didn't you?

"Les Invalides" wrote

"Les Invalides" wrote

Not really. The pension was a part of the employment package. You agreed to that when you took the job - you weren't *forced* to take the job they offered, did you?

Saying "IPC forced [you] to join the scheme" is a bit like saying "IPC forced [you] to work N hours per week for them". It's just part of the employment contract which you agreed to.

"Les Invalides" wrote

What scheme would you have preferred to belong to instead?

"Les Invalides" wrote

Why do you think that you were owed a pension?

Oh dear - are you really that dense? It had already been established that we *were* talking about a final salary scheme, by the initial post. Hence by your own admission, he *was* correct!

wrote

He wasn't being that general - he was being quite specific, just in respect of the post to which he was replying.