12 August 2010

The End of Final Salary Pension Transfers?

Health Warning: This may all sound like gobbledygook! If it does, don't worry about it! If you have any questions about final salary pension schemes we may be able to help.

At the moment it is possible to transfer from a final salary pension scheme into a defined contribution scheme prior to retirement. Although it is not often worthwhile (since the employer guarantees the ongoing benefits), it can be worthwhile if you have doubts about the ongoing viability of the scheme or if you need extra flexibility of income - by transferring to an "income drawdown" scheme, for example.

But it looks like the Department for Work and Pensions are proposing to abolish transfers from final salary schemes into defined contribution pensions from 2012 onwards. Part of the reason may be that final salary schemes are often contracted out of the State Second Pension and "contracting out" will be abolished for defined contribution schemes.

No comments:

Post a Comment

Blog Archive