The Way to Check Company Pensions
Kovac, Matt, Daily Mail (London)
Byline: MATT KOVAC
COMPANY pensions are the backbone of millions of workers' retirement funds. But they could be under threat.
The problem centres on promises made to people in final salary pensions, which pay a set sum based on earnings and length of service.
A series of recent reports have highlighted cash shortfalls in pension funds and have questioned whether these schemes are fulfilling their promises to members.
So if you are one of the 8.5 million people in a traditional company pension scheme, you should keep abreast of what's going on.
In theory, finding out about the state of a pension fund should be easy: a report and accounts are published annually, so you can check up on how the scheme is doing.
The accounts and report do not have to be sent automatically to everyone, so you have to request a copy from the pensions department or trustees of the scheme.
They have two months to get the information out to you.
Nick Edmans of Opra, the pensions regulator, says: 'If a member of an occupational pension is not given any information, they should contact us straight away.
'We can punish firms for failing to disclose information.' One of the most important aspects is whether there is enough money in the scheme to provide pensions to employees.
Any deficit should be highlighted in the annual report.
However, a more detailed evaluation(known as the minimum funding requirement report) of a final salary pension is made every three years by a number crunching actuary.
You will also be able to sift through the accounts to see how much money is being paid into the pension fund, where the money is being invested, the future growth of the fund and any rule changes that may affect your retirement.
If you are concerned about the state of the scheme, ask whether the pension has been given a clean bill of health from an independent actuary. …