Hi

Not sure if this is the right newgroup to ask ths, but here goes.

As part of a TUPE process, i have been given a one off chance to join my new
employers final salary pension scheme.

The information I have says your pension is based on your pensionable
service, and final pensionable pay in last 12 months.

The formula to calculate the pension is 1/60 x fpp x ps.

What exactly is pensionable service? Is it the number of years I have been
in the scheme?

Also, I am now 45, and have no other pension provision, is this worth doing?

thanks for any advice

Rick

"rick stevens" wrote in message
...
Hi

Not sure if this is the right newgroup to ask ths, but here goes.

As part of a TUPE process, i have been given a one off chance to join my
new employers final salary pension scheme.

The information I have says your pension is based on your pensionable
service, and final pensionable pay in last 12 months.

The formula to calculate the pension is 1/60 x fpp x ps.

What exactly is pensionable service? Is it the number of years I have
been in the scheme?

Also, I am now 45, and have no other pension provision, is this worth
doing?

thanks for any advice

Rick

IMHO you grab it quick before the employer takes it away.
the best example to understand what a 60ths scheme is is to imagine a
standard 40 years pensionable service, therefore 40/60 = 2/3 so you get
2/3rds of your final salary as a pension.
Up to 2008 the local government pension scheme used to be an 80th scheme....
so choosing the above example that is 40/80 = 1/2 so you get half of your
final salary as a pension. Incidentally this scheme is now a 60ths scheme
with improved pension!
Pensionable service is as you say is number of years in the scheme (this
assumes that you are working a full working week and this is not reduced
pro-rata for part time working)
In my case I was an apprentice for 5 years and so was not a member of the
scheme until I became a fully fledged employee.
The most difficult definition to grasp is pensionable pay...which is not the
same as gross pay...or net pay. In the british steel pension scheme (not
sure if its the same for all schemes) it is gross pay minus single persons
state pension, irrespective of whether you have a full state contribution in
terms of 44 years for a male (or 30 years after 2010) .
At 45 you may not get a lot of service in, however the scheme may allow
additional voluntary contributions of years of service whereby you pay extra
to buy these additional years. Its worth asking... but only if you can
afford the cost. The scheme will give you the costs if you ask for any
numbers of additional years.

Summarising, these schemes are a dying breed and are really unsustainable
especially in businesses which have high salaries (such as steelworkers,
rather than shopworkers), so you go for it....unless you have a chronic
illness which is going to have you deceased early...in which case you may
not even need a pension.
But... if your a healthy 45, with no defects, and healthy then do take them
up. If its a large company the scheme might last, but if its a small company
it will be closed sooner rather than later, but even if it is you become a
deferred pensioner with protected rights.

"BigGirlsBlouse" wrote in message
...

"rick stevens" wrote in message
...
Hi

Not sure if this is the right newsgroup to ask this, but here goes.

As part of a TUPE process, I have been given a one off chance to join
my new employers final salary pension scheme.

The information I have says your pension is based on your pensionable
service, and final pensionable pay in last 12 months.

The formula to calculate the pension is 1/60 x fpp x ps.

What exactly is pensionable service? Is it the number of years I
have been in the scheme?

Also, I am now 45, and have no other pension provision, is this worth
doing?

thanks for any advice

Rick


IMHO you grab it quick before the employer takes it away.

remainder snipped


You clearly know much about these matters, Rick.
I've been retired many years and was on a final-salary scheme when I
was working.
My pension is index-linked. I've not noticed any mention of
index-linking when these matters are discussed here. Is I/L implicit in
a F/S scheme, or am I just fortunate?
Sadly, my wife dumped me some years ago but my scheme would have
given my widow a 'half-pension' for her remaining years. Is that common
with these schemes?

--
DB.

"BigGirlsBlouse" wrote in message
...

"rick stevens" wrote in message
...
Hi

Not sure if this is the right newgroup to ask ths, but here goes.

As part of a TUPE process, i have been given a one off chance to join my
new employers final salary pension scheme.

The information I have says your pension is based on your pensionable
service, and final pensionable pay in last 12 months.

The formula to calculate the pension is 1/60 x fpp x ps.

What exactly is pensionable service? Is it the number of years I have
been in the scheme?

Also, I am now 45, and have no other pension provision, is this worth
doing?

thanks for any advice

Rick

IMHO you grab it quick before the employer takes it away.
the best example to understand what a 60ths scheme is is to imagine a
standard 40 years pensionable service, therefore 40/60 = 2/3 so you get
2/3rds of your final salary as a pension.
Up to 2008 the local government pension scheme used to be an 80th
scheme.... so choosing the above example that is 40/80 = 1/2 so you get
half of your final salary as a pension. Incidentally this scheme is now a
60ths scheme with improved pension!
Pensionable service is as you say is number of years in the scheme (this
assumes that you are working a full working week and this is not reduced
pro-rata for part time working)
In my case I was an apprentice for 5 years and so was not a member of the
scheme until I became a fully fledged employee.
The most difficult definition to grasp is pensionable pay...which is not
the same as gross pay...or net pay. In the british steel pension scheme
(not sure if its the same for all schemes) it is gross pay minus single
persons state pension, irrespective of whether you have a full state
contribution in terms of 44 years for a male (or 30 years after 2010) .
At 45 you may not get a lot of service in, however the scheme may allow
additional voluntary contributions of years of service whereby you pay
extra to buy these additional years. Its worth asking... but only if you
can afford the cost. The scheme will give you the costs if you ask for any
numbers of additional years.

Summarising, these schemes are a dying breed and are really unsustainable
especially in businesses which have high salaries (such as steelworkers,
rather than shopworkers), so you go for it....unless you have a chronic
illness which is going to have you deceased early...in which case you may
not even need a pension.
But... if your a healthy 45, with no defects, and healthy then do take
them up. If its a large company the scheme might last, but if its a small
company it will be closed sooner rather than later, but even if it is you
become a deferred pensioner with protected rights.

Basically I agree with this. I would say, however, that you ought to ask the
scheme for its own definitions of the terms that you are questioning. For
example, in the old days (rules have changed since) the maximum the Revenue
allowed you to have as a pension was based on your years of service, which
may have been more than the length of time you were a member of the pension
scheme (given that some pension schemes required you to be an employee for,
say, 2 years before you could join). So 'years of service' depends on the
definition that the pesnion scheme uses.

Whatever the niceties of these definitions are, it's almost certain that
you'd be better off in than out.

Rob Graham

You clearly know much about these matters, Rick.
I've been retired many years and was on a final-salary scheme when I
was working.
My pension is index-linked. I've not noticed any mention of
index-linking when these matters are discussed here. Is I/L implicit in a
F/S scheme, or am I just fortunate?

I don't think it's implicit, but I do believe it's almost universal - but
then I don't know the terms and conditions of all the schemes there are.

Sadly, my wife dumped me some years ago but my scheme would have given
my widow a 'half-pension' for her remaining years. Is that common with
these schemes?

Yes, it is common. But in some cases it's taken time for this to apply,
particularly for different sexes. For example, until sometime in the 80s
(can't remember when), pensions for male teachers included a 50% widow's
pension on death. But this was not true in reverse, i.e. if a female teacher
died her husband did not get a widower's pension - although the wife could
pay into the scheme to establish this entitlement. But then later the
entitlement became equal (due to the Sexual Relations Act, I suppose).

Rob

I would only add that you ought to ask how much of your pay you would
have to contribute. That is so you can consider if you can afford it.
(It may well be good buy but it probably ain't worth starving yourself
today for the sake of a bit more jam in 2029.) When looking at the
contributions bear in mind that (i) you get tax relief on your
contributions so they cost you less than the gross amount and (ii) if
you don't join you may pay more NICs on your earnings. Your employer
may well help you with these figures.
--
R

In message , DB.
wrote

I've been retired many years and was on a final-salary scheme when I
was working.
My pension is index-linked. I've not noticed any mention of
index-linking when these matters are discussed here. Is I/L implicit in
a F/S scheme, or am I just fortunate?

You are fortunate. In these 'tough time' and when lots schemes are
showing a shortfall many of the terms and conditions are changing on a
regular basis. My employer has stopped this type pension for new
joiners. My final salary pension is going to cost me around 3% more of
my salary. Index linking has been capped at 2.5% per annum when it is
paid. Some of the guarantees with regards extra contributions will not
be ongoing and only honoured to the current year for funds already paid
in. There are also many 'little' changes that are constantly eroding the
potential value of my final pension benefits with respect to the
voluntary contributions.
--
Alan
news2009 {at} admac {dot} myzen {dot} co {dot} uk

In message , DB.
writes

"BigGirlsBlouse" wrote in message
...

"rick stevens" wrote in message
...
Hi

Not sure if this is the right newsgroup to ask this, but here goes.

As part of a TUPE process, I have been given a one off chance to join
my new employers final salary pension scheme.

IMHO you grab it quick before the employer takes it away.

remainder snipped

You clearly know much about these matters, Rick.
I've been retired many years and was on a final-salary scheme when I
was working.
My pension is index-linked. I've not noticed any mention of
index-linking when these matters are discussed here. Is I/L implicit in
a F/S scheme, or am I just fortunate?

Mine is index-linked to the RPI, but capped at 3% indexing.
We got less than 1% this year...

Sadly, my wife dumped me some years ago but my scheme would have
given my widow a 'half-pension' for her remaining years. Is that common
with these schemes?

I am a widower, my FS Pension scheme would pay out 50% if I re-married,
provided that my new wife was not more than 10 years younger than
myself. Other schemes may vary, don't you still have the handbook of
yours, or receive newsletters, or does the scheme have a web site?
--
Gordon H
Remove "invalid" to reply

Thanks for all the advice, I think I shoudl sign up and not look a gift
horse in the mouth, so to speak.

Just for info, the contribution rate at present is 11.6% (but I think the
employers contribue as well) and the final pensionable pay is basic pay -
1.5 x state pension

cheers

rick

In an earlier contribution to this discussion,
rick stevens wrote:

Hi

Not sure if this is the right newgroup to ask ths, but here goes.

As part of a TUPE process, i have been given a one off chance to join
my new employers final salary pension scheme.

The information I have says your pension is based on your pensionable
service, and final pensionable pay in last 12 months.

The formula to calculate the pension is 1/60 x fpp x ps.

What exactly is pensionable service? Is it the number of years I
have been in the scheme?

Also, I am now 45, and have no other pension provision, is this worth
doing?
thanks for any advice

Rick


I agree with all the advice given by others. Even for 20 years, it is well
worthwhile being in a final salary pension scheme.

You didn't say what your previous pension arrangements were. Were you
already in a final salary scheme? If so, what will happen to the pension
which you have earned so far? The default would probably be to freeze the
scheme, and pay you a deferred pension from it. The problem with this is
that even if the deferred pension is inflation-proof, it's unlikely to keep
up with rises in *earnings* - which are invariable higher than price
inflation. The ideal solution would be to transfer any existing entitlement
into the new scheme - particularly if your pensionable service is
transferred on a year-for-year basis. I realise that the trustees of the new
scheme are not that likely to agree to such a deal - but you won't know if
you don't ask!
--
Cheers,
Roger
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