Your Pension Scheme

Like any organisation, an employer has its own way of running the company; this also applies to the pension scheme.

There are several different types of company pension scheme, although the most commonly used are the Final Salary and Money Purchase types of scheme. It is unusual for two separate company schemes to be identical, so it is worth looking at each scheme on its own merits.

Throughout the UK, there are millions of people in company pension schemes. The Pensions Regulator conducts reports on the number of members of these types of schemes and it is estimated that there are over 10 million members.

Pensions Crisis

Although 10 million people sound a lot the actual number of members is continuing to fall due to the ongoing difficulties employers are facing in providing their employees with a company pension scheme. Many major companies such as, BT, British Airways and Marks & Spencer have stopped new members of staff joining their final salary scheme (known as making the scheme a "closed scheme") whilst others have gone a step further and have "wound-up" the scheme altogether.

Leaving The Company Scheme

Once an employee has left their employer, they cease to be an active member of the company pension scheme. Typically, if you have been in a company scheme for more than two years you will be left with a "preserved" or "frozen" pension that will be looked after by the company pensions department until retirement age.

Some people will be happy with this arrangement, although, due to the current "pensions crisis", the majority are keen to investigate what other options they have available.