Money
Pensions
Think twice about cash for pensions
If your employer offers you money to leave your company pension scheme it is probably a bad idea to accept. That was the message from the Pensions Regulator on the same day the Revenue warned that in future such payments would be taxed as income, writes Paul Lewis
The high cost of providing good company schemes which pay a pension related to your salary means that some employers are offering employees a cash bribe to leave. Sometimes that can seem very tempting.
But the right to a pension which is related to your pay and guaranteed for life is very valuable and it is unlikely that cash now will be enough to pay the full price of giving up that promise.
The Chief Executive of the Pensions regulator, Tony Hobman, warned that "employers may not break any laws when they offer an inducement, whether it is cash payments or an increased transfer value, (but) we are concerned that some transfers are being proposed to avoid an employer's full pension liability."
Anyone made such an offer should take independent financial advice before accepting.
