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MyCompanyPension.co.uk - Helping members of occupational pension schemes to better understand their benefits.
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:: Blog | December 2008 (3 blogs) | Your job or your pension?
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Your job or your pension?
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I don’t hold with the argument that if the media stops talking about recession then it won’t happen. These are unchartered waters for a whole generation which has enjoyed relative prosperity and job security. However, as hundreds of thousands of jobs are at risk over the next few months, many employers are looking to reduce wages to save skilled employees from redundancy.
The problem here is that although there are now very many less active members of final salary schemes than there were just a few years ago, those employees that continue to enjoy this benefit must consider the impact a pay cut will have on their pension benefits.
In a final salary scheme the pension is based upon each member’s final pensionable salary in the years immediately before taking the pension. So, taking a pay cut when retirement is on the horizon may have longer-lasting implications. Employers and employees would do well to consider this, even though when jobs are at risk, pension benefits are probably well down the list of priorities. See:
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Mike Jones, MyCompanyPension.co.uk, 12th December 2008
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