Pension advice

Discussion in 'Et Cetera, Et Cetera' started by D_Relentless Original, Aug 30, 2010.

  1. D_Relentless Original

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    I have paid a full pension now for 20 years, i am concerned for my future as i have another 20 years to work.

    Talk is there may be no money to pay out, my employer has to match what i pay in.

    Is this true about pensions possibly being done away with?
    can i protect what i have paid in?,

    sorry for what might appear to be a daft question, i really do not know much about it and what is the best course of action to take to benefit me.

    Any advice?
     
  2. Rikter8

    Gold Member

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    Not a daft question at all.

    Many people lost their pensions here in MI. They were supposed to be secure, but they weren't.
    I would check with your H.R. department to see exactly what is secured and what isnt. It may be more beneficial for you to put the money in your own account and let it earn interest.

    My 401K plan after 5 years had less in it than if I would have just put the money into the bank, and that was Pre-popped bubble.
     
  3. B_starinvestor

    B_starinvestor New Member

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    Pensions have run into trouble with the poor performance of the equity markets over the past 10 years. A great many pensions are 'underfunded' - which basically means that they need to maintain a certain balance in order to be capable of paying the monthly benefits of all the participants; and currently that balance is below the threshhold.

    Most companies are shifting away from pensions and into 401(k) plans - in which case the responsibility falls directly on the employee instead of the employer.

    However, there is a level of protection from the PBGC which federally backs pension plan payments for failed pension plans.

    Since you still have 20 years, your pension benefit should be fine. If you were retiring soon, you'd have a much bigger problem with the pension.

    If you have the ability to switch your personal contributions over to a 401(k) or defined contribution plan, you will be in control of that asset and no longer have to worry about your employers performance in the pension account (at least with those future contributions.)
     
  4. JF

    JF
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    Make an appointment with an Independent Financial Advisor - maybe ask friends / colleagues for recommendations of a local one with whom they have had positive dealings.

    Make sure you steer clear of those associated with major financial organisations as they will be tied in to offering / selling you products from their organisation. Those that deal with 'whole of the market' products are your best bet, and ensure they are regulated by the Financial Services Authority.

    Most IFAs offer free advice and only charge / receive commission on products that you buy, so as long as time isn't a major factor, you could consult a couple of IFAs to compare their advice.
     
  5. D_Relentless Original

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    Thanks guys, i will look further into.
     
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