I started that job with a guaranteed Pension…is it still guaranteed?

The retirement/pensions industry is guilty of technical jargon that baffles anybody not working in Pensions!

This is particularly prevalent in group pension schemes. If you are that person who recalls being told of a guaranteed pension many moons ago, you may well remember terms like defined benefit, 50% salary etc.

This promise of a guaranteed monthly pension has rapidly evaporated in Ireland, high profile and particularly negative stories like Waterford Crystal pension scheme is a case in point. Thankfully most are not like this, however, they are under financial strain. Group DB schemes are now asking members to consider taking a set amount from these schemes and exiting.

The simple reason is cost, it is a promise that for many they can no longer be kept. However, like anything related to money, it is rarely straightforward! There are a few key questions one needs to ask of their scheme/trustee/themselves or a financial adviser:

  • Am I being asked or pressured to take a transfer? If so this is a good indication that the group DB pension scheme is under financial pressure and no longer fully funded
  • How many years have I got left to reach retirement, if it is more than 5 years, what deterioration or value will be within the group DB scheme by then?
  • If I take a transfer, what are the terms?
  • How do I know I am getting good value?
  • Will they give me an enhanced value to encourage my exit?
  • Will this decision be made for me soon regardless by the scheme trustees?
  • Should I stay where I am?

Taking control of your own money/affairs has never been more important in these disruptive times.

These are all reasonable things to get clarity on before making any decisions on your money. If you need a second opinion, get in touch with us today.


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