In Reply to: C plan surplus etc posted by RB on 09 July 2002 at 19:11:14:
OPAS chief executive Malcolm McLean, told BBC News Online that people should remember that final salary
pension schemes were "only as good as your employer is".
The report highlights two main problems:
* Insolvency: If a company goes bust, existing pensioners, including those who have taken early retirement,
get priority. The fund is divided up and those who have not yet retired, even if they are not long off retirement or
have delayed taking their pension, can be left with nothing. Opas is recommending a change to address this issue.
* Voluntary wind-ups: When the employer is solvent but chooses unilaterally to close down the scheme for
other reasons, full accrued pension rights do not have to be met - pensions are calculated on the basis of a
"transfer value" which is likely to secure only 70-80% of the pension actually earned by the member up to the
date of wind-up. Opas is calling for legislation to require the scheme to meet the pension in full.
See http://news.bbc.co.uk/hi/english/business/newsid_2094000/2094320.stm