Company pensions

After retirement and you are drawing your company pension should your former employer go " bust " what effect could this have on the pension.

Re: Company pensions

I'm under the impression that company pensions are invested in a fund on your behalf and therefore are secure if the firm goes bust.

Re: Company pensions

I am quite surprised that no one has come to your aid chum.
My understanding of this matter is that after the recklessness of CAptain Bob (Robert Maxwell) pension funds are a seperate set up & independent of the companies concerned.
Thats all I know








(Not you Alan)

Re: Company pensions

My OH has been drawing his company pension for a while now and although his company packed up and then re-started, was taken over a couple of times and then belonged to Taylor-Woodrow and finally joined up with Wimpey - his pension has been OK through all the changes.
I am fairly certain that once a pension starts to be taken it is safe and will continue to be paid as it becomes separate from the company a person was employed by. If it is taken as an annuity then the pension paid is by the provider of the annuity (through an insurance company and not your employer) and if it is a final salary pension scheme, like my OH's pension, there will be a board of trustees who administer the pension and who are separate from the company all together, so the pension is safe - I think.

Re: Company pensions

I had this happen to me, and I did and still collect my pension even though they went bust twenty years ago.
On another point, do you know if your company pension dies with you, or does it go to your spouse.

Re: Company pensions

If someone wants their spouse to benefit from their occupational pension after they have died then it must be decided and drawn up before the pension starts to be taken. It means choosing to take a reduced sum for the life of the pension, because the pension covers two people and will normally be paid for longer, so you don't get as much per month as you would if it was a single life pension if someone includes their wife. Because it costs the pension provider more (the pension has to go further/for longer) the actual pension received per month has to be adjusted accordingly if a spouse is to benefit from the pension after death of the pension holder.
It would be unusual and probably uneconomic for the provider (as well as making the contributions very expensive) if the whole pension could be transferred to a spouse and I don't think this happens. In our case if my husband dies I will continue to receive exactly half of what the amout of his pension is currently. If I die first the whole pension remains the same for my husband for as long as he lives. If you don't make the decision to share the benefits of the pension this way, or if it is not part of the pension contract, then the whole pension will stop when the pension holder dies, so it is a very important decision to make before the pension is drawn.
My father in law either didn't realise this or decided not to include his wife when when he drew his pension. I don't think he did it on purpose (he just wanted as large a pension as he could get) but when he died the pension stopped, she received nothing, didn't have an occupational pension of her own and had to manage on a basic single person's state o.a.p.

Re: Company pensions

Exactly Rena, this is why I asked the question, so people could be aware.

Re: Company pensions

Oh right Wrinkley - I thought you were asking a question - Sorry I jumped in - I didn't realise.