Steven Barrett
Registered User
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- 5,124
I had a query recently of a pensioner who had used his AVC's to buy back years in the defined benefit pension scheme he was in.
Under the new rules regarding DB schemes in trouble, pensions in payment can be reduced to provide some benefits for deferred members. This pensioner had a 10% cut to his pension, including the years he bought back himself. I queried this with The Pensions Authority that surely if he used his own money to purchase the years, he shouldn't have suffered a 10% loss on that portion. While the empathised with the situation, they said he was buying into the scheme and you take the good and bad of it.
With most defined benefit schemes underfunded, members should be aware of a potential cut in benefits in the future (it can happen at any time). If you have AVC's, look at your options of keeping it separate from the main scheme in retirement.
Steven
www.bluewaterfp.ie
Under the new rules regarding DB schemes in trouble, pensions in payment can be reduced to provide some benefits for deferred members. This pensioner had a 10% cut to his pension, including the years he bought back himself. I queried this with The Pensions Authority that surely if he used his own money to purchase the years, he shouldn't have suffered a 10% loss on that portion. While the empathised with the situation, they said he was buying into the scheme and you take the good and bad of it.
With most defined benefit schemes underfunded, members should be aware of a potential cut in benefits in the future (it can happen at any time). If you have AVC's, look at your options of keeping it separate from the main scheme in retirement.
Steven
www.bluewaterfp.ie