Pension Question

[RobertT]

You are correct RobertT based on the current Final Salary/Career Average schemes, but if we are privatised, how much longer will they be available

The final salary scheme closed in 2008, the career average scheme will probably close fairly soon after privatisation, possibly even before? But they will still be index linked and backed by the government - we just won't be able to build up any more qualifying years.

and will the new company owners/shareholders be prepared to pay a percentage of salary into a defined contribution scheme.

By law they will have to because of the introduction of auto-enrollment. What percentage they'd be willing to pay is debatable,but many companies still see a pension scheme as a way of attracting and keeping good members of staff.

[hans solo]

not fcukin us btw

[crammypostie1]

If you have been in the pension for less than two years you can opt for a refund of premiums paid, less a deduction for tax. Otherwise the benefits accrued to date will become paid up. They will increase in line with the terms and conditions of the pension scheme, which is normally the rate of inflation or a certain rate of growth, normally around 5%, whichever is the lower. So if inflation is 7% the increase would only be 5%. If inflation is below 5% then it would be by the rate of inflation. This is for the Final Salary Scheme and the Career Average Scheme. Those who have paid into the Defined Contribution Scheme, the value of your fund would rise and fall based on the performance of the underlying funds you have chosen to invest in.

yeah but clarify this to the staff that have less than the 2 years opt in. Do they cash out there monies in and royal mails monies in to?

[Zootsuit]

yeah but clarify this to the staff that have less than the 2 years opt in. Do they cash out there monies in and royal mails monies in to?

If the scheme is cashed in between 3 months and 2 years of qualifying date the return is what has been paid in by the contributor less 20% tax on refunds up to £20,000 plus 50% tax on any excess over £20,000 plus fund growth if any. Payment of tax on the fund growth is the responsibility of the contributor. Employer contributions are not paid to the contributor.