Money
Pensions
Key questions to ask your pensions provider
Greatly respected within the pensions industry, Dr Ros Altmann has been putting in much time and effort to help the Pensions Action Group's campaign, using her considerable influence to stop the Government from fudging this emotive and painful issue.
With the shocking news that Britain is only sixth in the EU generosity league when it comes to pensions, below Ros has compiled some vital questions you should ask your own pension provider:
If you are saving in a pension, it is very important for you to find out as much as you can about any risks that you face.
In a final salary company pension scheme, you should ask about the funding position of your scheme. In particular, what is the size of any deficit. If you are concerned that your employer may be at risk of insolvency, it will be important for you to ask what might happen to your pension if your scheme enters the Pension Protection Fund (PPF).
If your pension is well over £27,000 a year, you may be at risk of losing some of your retirement income, because the PPF payments are capped around £27,000 a year.
When asking about scheme funding, it is important to make sure you ask about the size of the deficit on more than one basis. You should know the position on the FRS17 basis, the PPF basis and on a full buyout basis.
If you are in a money purchase company pension scheme, it will be important for you to ask about the investment of the scheme assets, how risky the investments are, what are the expected returns and what the charges are for the fund. You should also make sure that your scheme trustees will shop around for a good annuity when you retire, since once you have bought the annuity with your money, you are likely to be stuck with it for the rest of your life.
If you are in a personal pension, stakeholder pension or Self Invested Personal Pension (SIPP) again it is vital to make sure you have an idea of the way your money is being invested.
In particular you should ask:
* What investment options do you have?
* What happens when you reach retirement age?
* What are the charges?
