Former Employee Winding Up Defined Benefit Plan Pension

W

whackers

Registered User
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Hi,

My former employee of 4.5 years ago has instructed the trustees to wind up the old pension plans which I was a member of.

Mine was a Non contributory Defined benefits from approx 2001 - 2006 and I decided not to transfer it when I left the company at the time.

Can someone help me with some rough ideas on:-

Do my former company have to pay out this old plan?
Will I be refunded the amount contributed over the years?
Will I be liable to pay tax on the amount?

I am unemployed at the moment therefore am not in an existing scheme or have a private pension contribution...

thanks alot!!
 
The assets of the Defined Benefit pension scheme will be divided up between the members, including you. In broad terms, AVC funds and pensioners get priority, then everyone else.

You'll be offered a value for your entitlements. If you're over 50, you can "take early retirement" (in respect of this pension scheme - doesn't mean you have to physically retire from work) and draw some or all of your benefits now. If you're under 50, you can transfer your value into a Buy Out Bond or PRSA in your own name - effectively a pension policy that you choose. There will be a default option, but remember you can shop around for your Buy Out Bond or PRSA - you don't have to take the default one if you don't want.

You don't pay tax on transferring to another pension plan. There might be tax to pay on taking early retirement benefits, depending on how you take them and how much is involved.

Liam D. Ferguson
 
Many thanks for your prompt reply.
I am under 50 and will look into the options you provided....
As it stands I dont know whether my former company is doing this because it is insolvent or cannot afford to continue this plan and have a shortfall.
Time will tell how much I will be offered! Lets hope something!

thanks again
 
I'm sure you'll get something, although it will very likely be a lot less than the actual value of the benefits if the scheme had continued.
 
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