Company pension raids - The next Maxwell?
Thread Starter
Joined: Feb 2000
Posts: 187
Likes: 4
From: North West
Company pension raids - The next Maxwell?
I recently had a review of my pension and other financial arrangements. To my surprise, the Financial Adviser told me to keep a eye on my final salary pension. I hasten to add that he was not commenting on my own scheme but on the regulation in general.
The Financial Adviser took the view that it has been a long time since the Maxwell scandal. The regulations surrounding company pension schemes are still complicated and, ultimately, open to abuse if we keep our eye off the ball..
Now, my question to other Ppruners is this?
What is the best way to monitor the administration of a pension scheme when you have left the company?
The Financial Adviser took the view that it has been a long time since the Maxwell scandal. The regulations surrounding company pension schemes are still complicated and, ultimately, open to abuse if we keep our eye off the ball..
Now, my question to other Ppruners is this?
What is the best way to monitor the administration of a pension scheme when you have left the company?
Last edited by Wig Wag; 3rd March 2005 at 06:44.
Joined: Jan 2005
Posts: 18
Likes: 0
From: Halifax
Ask the trustees to provide you with the following
1) an up to date benefit statement
2) the amount of the current transfer value
3) a copy of the most recent scheme accounts
4) a copy of the most recent actuarial valuation
1) should show you what your current entitlement is and what you might get at retirement.
2) will give you a current value and you could ask your financial adviser to tell you if this value might be better invested elsewhere - (usually unlikely in the case of a good Final salary Scheme) - it should also tell you if the transfer value is in any way restricted - if it is scaled back this could indicate that the scheme is underfunded.
3) look at the accounts to see if contributions are being paid on time (in the auditors report) - also how the scheme investments are performing.
4) look at the actuarial report to see how well the scheme is funded - firstly on an ongoing basis (ideally it should be around 100%) - secondly on a discontinuance basis - unlikely to be 100% but the nearer it is to that the better.
If the actuarial report reveals the scheme to be underfunded the actuary will have advised how it might be dealt with - probably by recommmending increased contributions for a time - the trustees Report (in the accounts) should reveal what has been agreed with the employer in terms of funding contributions.
G7SWZ
1) an up to date benefit statement
2) the amount of the current transfer value
3) a copy of the most recent scheme accounts
4) a copy of the most recent actuarial valuation
1) should show you what your current entitlement is and what you might get at retirement.
2) will give you a current value and you could ask your financial adviser to tell you if this value might be better invested elsewhere - (usually unlikely in the case of a good Final salary Scheme) - it should also tell you if the transfer value is in any way restricted - if it is scaled back this could indicate that the scheme is underfunded.
3) look at the accounts to see if contributions are being paid on time (in the auditors report) - also how the scheme investments are performing.
4) look at the actuarial report to see how well the scheme is funded - firstly on an ongoing basis (ideally it should be around 100%) - secondly on a discontinuance basis - unlikely to be 100% but the nearer it is to that the better.
If the actuarial report reveals the scheme to be underfunded the actuary will have advised how it might be dealt with - probably by recommmending increased contributions for a time - the trustees Report (in the accounts) should reveal what has been agreed with the employer in terms of funding contributions.
G7SWZ
Joined: Dec 2001
Posts: 1,389
Likes: 0
From: England
Make sure you know who the trustees are. If you need to ask questions of the administrators you might find it best to have the trustees ask on your behalf because the administrators are usually obliged to keep the trustees informed.
Watch out for companies not making their payments into the fund on time. They may deducted your contributions from your salary monthly but how quick are they in paying money to the fund.
Watch out for companies not making their payments into the fund on time. They may deducted your contributions from your salary monthly but how quick are they in paying money to the fund.
Joined: Jan 2005
Posts: 18
Likes: 0
From: Halifax
By law (Pensions Act 1995) contributions deducted from salary must be paid over by the employer to the Trustees within 19 days of the end of the month in which they are deducted.
Hence my reference in my earlier reply to checking the auditors report in the scheme accounts to confirm that contributions are being paid in accordance with the schedule of contributions.
Where contributrions are not paid on time there is an onus upon the Trustees to report the matter to OPRA the pensions regulator.
Similarly the Auditor has an obligation to whistleblow to OPRA where he finds the contributions are not being paid on time.
Responsibility lies with the Trustees not the Administrator and all enquiries are best addressed to the Trustees.
G7SWZ
Hence my reference in my earlier reply to checking the auditors report in the scheme accounts to confirm that contributions are being paid in accordance with the schedule of contributions.
Where contributrions are not paid on time there is an onus upon the Trustees to report the matter to OPRA the pensions regulator.
Similarly the Auditor has an obligation to whistleblow to OPRA where he finds the contributions are not being paid on time.
Responsibility lies with the Trustees not the Administrator and all enquiries are best addressed to the Trustees.
G7SWZ
Thread Starter
Joined: Feb 2000
Posts: 187
Likes: 4
From: North West
Gentlemen, thank you for your informative and helpful replies.
One last question: It is some years since I worked for the airline. Should I approach the company for the names of the Trustees or would BALPA be able to help?
Many thanks,
Wig Wag.
One last question: It is some years since I worked for the airline. Should I approach the company for the names of the Trustees or would BALPA be able to help?
Many thanks,
Wig Wag.
