My wife has been informed that her final salary pension scheme is being
wound up, and that the replacement will be the setup whereby it becomes
a personal pension and the company contributes as well as the employee.

Can they change the pension scheme in this way without authority? She
can't remember if she signed anything to say this was okay, but even if
she did, she certainly didn't receive any advice about whether or not it
was wise or advisable so to sign.

It has been suggested that the services of a financial advisor be
employed, bit I'm concerned that the cost of this could well meet or
even exceed the value of the fund in question, so perhaps not the best idea.

What is the legal situation on this matter?

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"Gary" wrote in message
...
My wife has been informed that her final salary pension scheme is being
wound up, and that the replacement will be the setup whereby it becomes
a personal pension and the company contributes as well as the employee.

Can they change the pension scheme in this way without authority? She
can't remember if she signed anything to say this was okay, but even if
she did, she certainly didn't receive any advice about whether or not it
was wise or advisable so to sign.

It has been suggested that the services of a financial advisor be
employed, bit I'm concerned that the cost of this could well meet or
even exceed the value of the fund in question, so perhaps not the best
idea.

What is the legal situation on this matter?


Very murky in my view, but loads of firms are doing it and getting away with
it. It's a matter of contract. Usually firms are careful to draw up the
employment contract to allow them to do things like this. Challenging them
can be very expensive.

"Gary" wrote in message

My wife has been informed that her final salary pension scheme is
being wound up, and that the replacement will be the setup whereby it
becomes
a personal pension and the company contributes as well as the
employee.

Can they change the pension scheme in this way without authority? She
can't remember if she signed anything to say this was okay, but even
if
she did, she certainly didn't receive any advice about whether or not
it was wise or advisable so to sign.

It has been suggested that the services of a financial advisor be
employed, bit I'm concerned that the cost of this could well meet or
even exceed the value of the fund in question, so perhaps not the
best idea.

What is the legal situation on this matter?

Perfectly legal.

The company had to provide as much support (contribution) as necessary to
keep the final salary scheme afloat. With the downturn in the stock market
in recent years many companies have found the contributions crippling and
have closed their final salary schemes. The alternative in some cases might
have been a bust company and a bust pension scheme. Better to change the
scheme before that happens and everyone loses.

The financial advisor is probably suggested in order to try to ensure that
every contributor to the existing pension scheme receives "best advice" on
the subsequent pension arrangements - join the new scheme or make your own
arrangements, what to do with the contribution from the current scheme, etc.
The company may pay the financial advisor or he may not charge. In the
latter case he would make his money from the pension he arranged for you.
Worth investigating how he is funded and what, if anything, you would have
to pay.

--
Old Codger
e-mail use reply to field

What matters in politics is not what happens, but what you can make people
believe has happened. [Janet Daley 27/8/2003]

Old Codger wrote:


Perfectly legal.

The company had to provide as much support (contribution) as necessary to
keep the final salary scheme afloat. With the downturn in the stock market
in recent years many companies have found the contributions crippling and
have closed their final salary schemes. The alternative in some cases might
have been a bust company and a bust pension scheme. Better to change the
scheme before that happens and everyone loses.

The financial advisor is probably suggested in order to try to ensure that
every contributor to the existing pension scheme receives "best advice" on
the subsequent pension arrangements - join the new scheme or make your own
arrangements, what to do with the contribution from the current scheme, etc.
The company may pay the financial advisor or he may not charge. In the
latter case he would make his money from the pension he arranged for you.
Worth investigating how he is funded and what, if anything, you would have
to pay.


The only advice (and the company has been clear to point out that this
is not, in fact, advice) is to either (A) take out a new personal
pension and transfer the fund to that. Even though they state they do
not give advice, they helpfully provide an illustration from a (I
assume) favourable (to themselves in the form of commission???) pension
company. Or you can apply to them and have a new illustration drawn up
showing what might happen if you transfer this fund to the companies
current (not final salary) scheme - the very fact that this is not the
default action makes me think they _want_ you to take out the new
scheme. Or you can hire your own advisor. They have helpfully provided
three incomprehensible forms to help you through this. There has never
been the offer of a free financial advisor or any guidance from the
company or its financial advisors about what is best. The employees
basically must DYOR (for better or worse), pay for advice or guess
what's best.


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"Gary" wrote in message
...
Old Codger wrote:


Perfectly legal.

The company had to provide as much support (contribution) as necessary
to
keep the final salary scheme afloat. With the downturn in the stock
market
in recent years many companies have found the contributions crippling
and
have closed their final salary schemes. The alternative in some cases
might
have been a bust company and a bust pension scheme. Better to change
the
scheme before that happens and everyone loses.

The financial advisor is probably suggested in order to try to ensure
that
every contributor to the existing pension scheme receives "best advice"
on
the subsequent pension arrangements - join the new scheme or make your
own
arrangements, what to do with the contribution from the current scheme,
etc.
The company may pay the financial advisor or he may not charge. In the
latter case he would make his money from the pension he arranged for
you.
Worth investigating how he is funded and what, if anything, you would
have
to pay.


The only advice (and the company has been clear to point out that this
is not, in fact, advice) is to either (A) take out a new personal
pension and transfer the fund to that. Even though they state they do
not give advice, they helpfully provide an illustration from a (I
assume) favourable (to themselves in the form of commission???) pension
company. Or you can apply to them and have a new illustration drawn up
showing what might happen if you transfer this fund to the companies
current (not final salary) scheme - the very fact that this is not the
default action makes me think they _want_ you to take out the new
scheme. Or you can hire your own advisor. They have helpfully provided
three incomprehensible forms to help you through this. There has never
been the offer of a free financial advisor or any guidance from the
company or its financial advisors about what is best. The employees
basically must DYOR (for better or worse), pay for advice or guess
what's best.


Calm down. There is a way through this maze.

First you have to decide whether there is anything you can do or want to do
about the abolition of the Final Salary scheme.

Second, assuming the FS scheme is closing down, you need to find somewhere
for her money held within that scheme. These schemes normally contain a
fall-back option, which is for the trustees to buy a non-profit deferred
annuity to equal your wife's entitlement to a pension calculated under the
rules. Where there is a deficit, she might only get part of the pension, but
it is no longer possible for the employer to walk away from the deficit.

Third, obtain illustrations for all of the options on offer. Insist that
those illustrations include the figures for commission payable to the
advisers.

Fourth, I doubt that the employer is getting a kick-back in commission from
the IFA, but you are certainly entitled to ask the IFA.