Defined Benefit Pension Scheme being wound up

My DBPS was frozen 5 years ago, and we were offered a Defined Contribution Scheme in it's place. The original fund was left there in the hope that it would recover, and we were told at that time that it wouldn't be touched.

Recently, the trustees (who are also directors of the company) have informed us that the original defined benefit pension scheme has been closed down since the end of last year, and, that we have 3/4 options to choose from, with the cash offering from the fall-out - like it or lump it.

have they the right to close down a scheme that I have paid into for years, without consultation?
How usual is it for trustees to also be the employer?

I thought my DEFINED scheme was that - DEFINED. I feel so powerless in this situation.

Have I any redress to this, or is their nothing I can do?

Thanks for any advice.

They would have submitted a proposal to The Pensions Authority for approval.

The problem is that defined benefit schemes are incredibly expensive to run. With people living longer and long bond rates so low, providing benefits in retirement are costing the company more and more. If they fund the scheme now, they may run out of money in the future...or they say there will be no pay rises because they have to fund the pension scheme.

You can request the annual reports to see how bad off the pension scheme is. Make your decision off the back of it. Any guarantee is only as good as the person making it.

It is a sad reality of defined benefit pensions today that most members are losing out because employers can't afford to provide the benefits.

Steven
www.bluewaterfp.ie

Ephbee,

Steven is correct.

All comes down to money.
If you are say 40 and scheme runs low on funds paying existing pensioners , when your turn comes , tough! you get minimal pension.

Depending on how much transfers to your (new) Defined Contribution Scheme, you may have got the best of a bad hand.

Thanks for your replies, guys...but having your employer as Trustee of your pension seems self-defeating to me.
Not like as if they were ever going to sue themselves, does it?
Ephbee.

Ephbee said:

but having your employer as Trustee of your pension seems self-defeating to me.

Click to expand...

Why? Trustee duties are the same.

Steven
www.bluewaterfp.ie

At this stage all you can do is try and get the maximum transfer value out of the scheme. But even a full transfer value will not be sufficient to buy you your accrued pension to date.
Not unusual for Directors to be Trustees but not best practice either especially if no other Trustees. They must act in the interest of the members and this has been reaffirmed in recent cases. So, as Trustees in a windup, they may be obliged to place a demand on the Company for significant funds before closure of the scheme. I doubt they have done this. In a recent case, a company was forced to pay an enhanced transfer value. One of the key issues was that the company did not enter into negotiations with the Trustees after they placed such demand. The wording of the Trust Deed was also significant, yours may be different.

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Then we have the day to day reality. Much will depend on how much you want to push the issue with the Trustees/Directors and what the likely benefit would be for you. And do you have the energy to take it on? You still have to work there. Find out what your transfer value will be. From the sounds of it, yours may be cut. If so, see what the full and reduced value is.