Hi, my father has a decision to make about a defined benefit pension scheme that he is part of. He has received advice from an independent financial advisor about it but basically the advisor has outlined the advantages and disadvantages of each option to him and now he has to make the decision himself. Just looking for some second opinions here if possible...
Basically, my father was made redundant after 20 years of working for the same company. He has been paying into their defined benefit scheme. The pension fund is currently under-funded and he has been offered a transfer value of only 75% of the value of the pension. His old employer appears to be in a bit of financial trouble so we've been trying to factor that into our thoughts i.e. will the company still be around when my father reaches retirement age in 10 years time.
So it feels like the choice is basically a bit of a gamble. Does he leave the pension as it is and hope the company is still there when he retires and is funded enough to provide him with his pension benefits? Or does he cut his losses, take the 75% transfer value and then at least have the security of knowing that 75% is in a personal pension?
I'd be very grateful if anyone has any recommendations.
Basically, my father was made redundant after 20 years of working for the same company. He has been paying into their defined benefit scheme. The pension fund is currently under-funded and he has been offered a transfer value of only 75% of the value of the pension. His old employer appears to be in a bit of financial trouble so we've been trying to factor that into our thoughts i.e. will the company still be around when my father reaches retirement age in 10 years time.
So it feels like the choice is basically a bit of a gamble. Does he leave the pension as it is and hope the company is still there when he retires and is funded enough to provide him with his pension benefits? Or does he cut his losses, take the 75% transfer value and then at least have the security of knowing that 75% is in a personal pension?
I'd be very grateful if anyone has any recommendations.