Re: company moving pension from defined benefit to defined contribution
Originally Posted by Calcio2
I suppose this is a common enough problem .been in a defined benefit company pension for the last 19 years .then last october it announces that it is closing it down to future acrual and now i will be enrolled in a defined contribution scheme going forward .Anybody have a similar experience
Yep very common and surprising that its only just happened for you TBH. My company pension changed years ago as did so many others. It began with stopping anyone new coming into the Final Salary Pension Scheme. Then the scheme changed and we had the option of freezing where we were or moving into a defined contribution type scheme.
I took that point to take stock and realise that it is unlikely any of us will see our pension money while ever we leave it in the hands of companies and trustees.
They are never going to stop changing the schemes now. Pensions are a liability, one that needs a lot of funding.
You can be certain that come the day, they are going to make some excuse about global financial crises and the like and will say that unfortunately your pension pot isn't actually very big.
I moved my company pension into a private SIPP. My company didn't help much with that process, naturally.
I went to one of the huge financial institutions and set up a SIPP and asked about transferring my pension pot into it. They insisted that I get a report from an independent financial advisor to be sure that I understood the ramifications of transferring. So I did that, cost me £400.
Then 10s of 1000s of pounds of my pension pot got transferred over and suddenly its like I have a new bank account.
I can see the money. The money is mine, no-one else's and I have total control over it. I choose to invest say £1000 of it into a stock or share. If that share rises I can then sell the shares and my pension pot is then bigger. If the share falls then I can sell at a loss or sit on the shares and hope they recover.
Basically I am doing the same with that pension pot that trustees were doing with it, the crucial difference being that ALL PROFITS go to me.
Huge difference !
I am much happier being in control and knowing that every successful trade puts money in my pot rather than into some trustees pot.
This does however require you to learn about the stock markets and how they operate. The markets are crooked and the internet is littered with fraudulent groups of people all busily promoting rubbish stocks on forums and Twitter trying to lure naïve people into buying the shares.
Once you understand that you can make better decisions.