Concerns about changes to my employer that will affect my pension

We often have a feeling about how things are going. Perhaps your business is struggling, merging with another organisation or you’ve heard comments about the cost of your pension scheme.

This doesn’t always mean bad news, but it helps to know where you stand just in case. 

You might become aware or suspect that the company or scheme you are in is looking at making changes.

If this is the case, they’ll need to talk to you formally. So until they do this, make sure that all your records are up-to-date with your employer and scheme should they need to talk to you.

It’s important that you check that the scheme has:

• your current address
• any changes in address
• any changes in circumstances, such as getting married, changing your name or getting divorced.
• It’s also a good opportunity to check that you have filled in a nomination of wishes form. This is something that tells the trustees of the scheme what you want to do with any money in the event of your death.

Many things can prompt your scheme to consider changing – these are called ‘events’.

If the scheme is of a substantial size or you work for a large employer, it’s not unusual for this to be reported on in the news.

As the next steps become clearer, the scheme, or your employer, will start to talk to you about what’s happening to your pensions.

There will normally be things for you to think through and decisions to be made.

It’s important that you understand what the next step means, if there are any deadlines you need to be aware of and if you’re being offered any help with the process.

Many schemes arrange workshops, for example, to help people at this time. 

If you want to find your own adviser, it’s important to check that they are regulated and authorised to help you.

You can contact us for help if you’re not sure:

• how to go about finding an adviser
• what to ask for
• how to make the most of your session.

We can talk through your situation with you and provide some guidance on possible implications.

Your scheme might send you a letter on behalf of several government bodies, such as The Pensions Regulator, the Financial Conduct Authority, the Pensions Protection Fund and the Money and Pensions Service. The letter will outline sources of help and FAQs.

Your employer will make a proposal on the future provision of your pension, and advise the trustees/administrator of your pension scheme.

The trustees/administrator of your scheme will contact you in writing.  The correspondence from the trustees/administrators of your pension scheme will formally set out the proposed changes.

The trustees of your scheme or employer will spend some time talking to a range of stakeholders about your pension and how to decide on the best way forward.

This will include professional advisers, trustees and, if you have one, a union or their representatives.

As these discussions are likely to close your scheme, the trustees of the scheme or your pension provider/employer will formally talk to you about the proposed change and what it is likely to mean to you. This might coincide with correspondence from your employer/former employer.

The trustees/administrator of your pension scheme/employer will formally propose changes to your scheme and then consult with you.

They should explain:

• the pros and cons of different options (such as moving from a defined benefit to defined contribution or changing the age that you can retire.)
• the risk of being scammed
• contribution levels
• current value of benefits
• flexibility of benefits
• whether the scheme could enter the Pension Protection Fund.

    Again, if you are unsure of the implications of these changes it’s a good idea to talk to a regulated financial adviser (which you would need to pay for) or get expert guidance.

The trustees/administrators of your scheme/employer are likely to set up helpline services or extra support for you, but you can also contact us.

As the next steps for your scheme become clearer, it’s important that you understand how these affect you.

There’s lots of help and guidance available, but it’s important that you go to reputable sources of advice.

Always check who you are dealing with and that any advice services you use are regulated.

A good source of guidance if you have a defined contribution pension, are close to retiring and thinking about your options is a Pension Wise appointment.

But if you’re not sure what to do and want some help thinking things through, contact us and we can help get you started.

When a decision has been reached on what’s happening to your pension scheme, the trustees/administer of your scheme/employer should formally notify you and tell you about important dates.

If you haven’t heard anything and your colleagues have, check that the scheme has your correct details as soon as possible. 

If your scheme is moving into the Pension Protection Fund (PPF), they’ll contact you with information about what will happen next.

This can be a long process. So until they’ve completed any assessment period, it’s unlikely that they’ll be able to give you any exact information on the level of retirement benefits that you’ll get.

In the event of a pension scheme entering the PPF assessment period, it’s unlikely that you’ll be able to transfer your pension to another scheme.

It’s possible that while the trustees and company consider their next steps, they’ll tell you that they’re looking at options.

This is a sensitive time, and some people might use the uncertainty to try to tempt you into new investments, products or schemes that might not be in your best interests.

Beware of anyone approaching you directly who aren’t endorsed by your scheme. 

If you’re called out of the blue about your pension this is now illegal. So if you are approached, its best to hang up.

If you’re worried or uncertain about any possible changes, you can contact us.  We are a government-backed service that offer free, independent and expert pensions help.

You can call us on 0800 011 3797. We provide expert, free, independent and impartial guidance to members of UK pension schemes on pension and retirement saving issues.

The Pensions Regulator protects savers by making sure that workplace pension schemes are run properly.

They work directly with employers and those running workplace pensions.
When pension schemes need restructuring, they provides guidance to trustees. This helps make sure that the trustees communicate effectively with savers.

They also provide detailed guidance on defined benefit to defined contribution transfers.

The Pension Protection Fund (PPF) protects millions of people throughout the UK who are members of defined benefit pension schemes. They make sure that you’ll be looked after if the scheme you’ve paid into fails.

They support trustees when communicating to members where defined benefit scheme members are asked to make a choice where one of the options available involves their pension being taken over by the PPF.

The PPF aims to make sure all communications to members is accurate, clear and consistent. This is especially where information is about the PPF and its compensation. This helps to make sure members can make a well-informed choice.

The Financial Conduct Authority is the regulator for providers of personal pensions. This includes stakeholder personal pensions, self-invested personal pensions and workplace personal pensions.

These are all forms of defined contribution pensions.

The Financial Conduct Authority also regulates the advice (including pension transfer advice) given by regulated advisers, asset managers and other firms that provide investment services.

Pension Wise offers anyone over the age of 50 with a defined contribution pension a free appointment to talk through:

• their options to take money from their pension savings
• the things to think about
• how to avoid falling victim to a pension scam.