Protect your Pension

[green-Bowler]

Today I am 65, Today I was expecting to recieve my private pension, yesterday I got a letter from the pension company telling me that because I was declared bankrupt twenty odd years ago the Official Re
ceiver has claims on my pension, so the pension i was expecting is no more.
So BEWARE if you have a private pension and you are considering bankruptcy seek advice and protect your pension...

[Never-In-Doubt]

Re: Protect your Pension

Most pensions are protected in BR, however if you were to receive your pension as a lump sum whilst still bankrupt, the Official Receiver may want it for the bankruptcy.

If you were receiving it or to receive it as a monthly income, then it would be fine in bankruptcy as it is your source of income to live on.

Read this for help:---> http://www.bankruptcy-insolvency.co....my-pension.php

Will I lose all my pension?


Whether or not you are currently receiving your pension, the trustee cannot claim: your state pension or any payments from the State Earnings Related Pension Scheme (SERPS);

• any of your occupational pension if your occupational scheme has a clause forfeiting pension benefits following bankruptcy (the trustee could claim the benefit of a personal pension policy, even if it has a similar clause); and
• any protected rights - these rights arise in any pension you may have where you or your employer have contracted out of SERPS. They represent the equivalent of the SERPS benefits within your pension. In an occupational pension scheme, the protected rights might be known as ‘a guaranteed minimum pension’ or ‘benefits under the reference scheme test’.

When he or she has all the information about your pension, the official receiver or your trustee will be able to tell you what part, if any, of your pension is being claimed as an asset in your bankruptcy. Even if the trustee cannot claim your pension, or any part of it, the amounts you receive may still be included in the calculation of your income, if the trustee applies to the court for an income payments order’ during your bankruptcy. (The court may order you to pay part of your wages, salary or other income to the trustee.)

[mgfboy]

Re: Protect your Pension

I would suggest that before you write off your pension, I would see what is actually produced by the pension company by way of income and lump sum.

I do believe that the bankruptcy rules where different back then and the pension provider would have been told that you where bankrupt, but at the time they would have told you what if anything they would take.

In the past a lot of people put large sums in pension just before their companies went bankrupt as a shelter from bankruptcy!!!

[garlok]

Re: Protect your Pension

Time passes quickly but I would do as mgfboy has suggested and get further information form your pension company. I seem to remember that there was quite a bit of complication over pensions which was spread over quite a number of years. As I understood the problem if you contracted out of SERPS and the contributions were paid into a private/company pension plan along with all those tax payments/ bonuses then those formed part of a protected rights package which was not touchable in bankruptcy. They were part of the "State pension package". I seem to remember that, I stand to be corrected, that if you had contracted out of the SERPS scheme into a private plan shall we say, you paid contributions out of taxed income. That was not refunded directly to you but paid into your plan. As a reward for opting out the government then matched this tax "refund" with an addtional payment into your fund. This formed that protected rights package.

The complications then came when Gordon Brown raided pension funds in a big and complex way and seemingly much of this money was recovered, (so the companies claim). Then the amount of tax free lump sum that you could get was reduced to 25% maximum. I have one small plan which was written up under the old section 23 rules which should have given me 33% by way of lump sum. In fact the complexities of the Statutory Instruments involved allowed the company to wriggle out and only pay 25%. As those plans accepted a lower annual return for the larger lump sum to be paid we all lost out.

So it is all a mess and like insurance companies they will wriggle like hell to not pay out. Its worth having a bat at them and not just accepting what they say.

regards
Garlok

[mgfboy]

Re: Protect your Pension

Time passes quickly but I would do as mgfboy has suggested and get further information form your pension company. I seem to remember that there was quite a bit of complication over pensions which was spread over quite a number of years. As I understood the problem if you contracted out of SERPS and the contributions were paid into a private/company pension plan along with all those tax payments/ bonuses then those formed part of a protected rights package which was not touchable in bankruptcy. They were part of the "State pension package". I seem to remember that, I stand to be corrected, that if you had contracted out of the SERPS scheme into a private plan shall we say, you paid contributions out of taxed income. That was not refunded directly to you but paid into your plan. As a reward for opting out the government then matched this tax "refund" with an addtional payment into your fund. This formed that protected rights package.

The complications then came when Gordon Brown raided pension funds in a big and complex way and seemingly much of this money was recovered, (so the companies claim). Then the amount of tax free lump sum that you could get was reduced to 25% maximum. I have one small plan which was written up under the old section 23 rules which should have given me 33% by way of lump sum. In fact the complexities of the Statutory Instruments involved allowed the company to wriggle out and only pay 25%. As those plans accepted a lower annual return for the larger lump sum to be paid we all lost out.

So it is all a mess and like insurance companies they will wriggle like hell to not pay out. Its worth having a bat at them and not just accepting what they say.

regards
Garlok

Garlok I agree with a lot you say and it's a complex area when your looking at old pre PPP/RAC's pensions. But I do disagree on the pay out bit, I never know one not get paid out in the end, they may cock up on the amount or not tie things up properly, but they do payout and when they don't it's due to them being stupid and not some grand plan.

You should always go to a IFA to discuss the benefits that you may get and discuss the various options, but people dont ( people can be so tight at just the wrong time)and on the whole they lose out!!!!

[garlok]

Re: Protect your Pension

Hi mgfboy,

Thanks for the reply. Yes we did get all of our pension payouts in the end except the 33%/25% issue. We do and have used an IFA ( a well known one in Hampshire) for over twenty years but even they got stumped with some of the angles that were trying to be pulled in the early noughties when my health broke up first. To even still have a fund and I wasn't and never have been bankrupt not even a default on file until 2009, took several acrimonious calls from the IFA's MD to the company idiots and me taking action against the company solicitor who probably is still soliciting but on a Glasgow street corner.

Every company the IFA recommended and we used was "blue chip" and every one turned out to be a nightmare when the time really came.

In the pensions role, a good test is whether the iFA in their very first conversation with you about pensions talks to you about those things which will give you a good pension which DO NOT give him/her a commission if you take such a plan. They are REQUIRED to tell you about these options. A clear admission from our own IFA. Secondly currently I would also recommend anyone to talk to the likes of Hargreaves Lansdowne and there are others (no connection at all by the way) before settling your plan and payouts. We went with the company in the end as they threw in some little sweeteners (long term guarantees for instance for the surviving partner) and the annuities were very competitive for the time (last year).

So it is worth while shopping around. I took my own two years early and the calculations from more than one area showed only a £1 per month difference in monthly income and on the basis conditions (as predicted by the real experts) will be even worse in two years I took it.


regards
Garlok

[mgfboy]

Re: Protect your Pension

Hi mgfboy,

Thanks for the reply. Yes we did get all of our pension payouts in the end except the 33%/25% issue. We do and have used an IFA ( a well known one in Hampshire) for over twenty years but even they got stumped with some of the angles that were trying to be pulled in the early noughties when my health broke up first. To even still have a fund and I wasn't and never have been bankrupt not even a default on file until 2009, took several acrimonious calls from the IFA's MD to the company idiots and me taking action against the company solicitor who probably is still soliciting but on a Glasgow street corner.

Every company the IFA recommended and we used was "blue chip" and every one turned out to be a nightmare when the time really came.

In the pensions role, a good test is whether the iFA in their very first conversation with you about pensions talks to you about those things which will give you a good pension which DO NOT give him/her a commission if you take such a plan. They are REQUIRED to tell you about these options. A clear admission from our own IFA. Secondly currently I would also recommend anyone to talk to the likes of Hargreaves Lansdowne and there are others (no connection at all by the way) before settling your plan and payouts. We went with the company in the end as they threw in some little sweeteners (long term guarantees for instance for the surviving partner) and the annuities were very competitive for the time (last year).

So it is worth while shopping around. I took my own two years early and the calculations from more than one area showed only a £1 per month difference in monthly income and on the basis conditions (as predicted by the real experts) will be even worse in two years I took it.


regards
Garlok

Fair enough Garlok as a person that works in Financial Services , I take on board what you say and I just wanted in give a more balanced view, I've probably been involved in a few more cases that you have and most go a little smoother than your situation. I'm not saying that problems dont happen and insurance companies arn't arseholes sometime but on the whole things do come right in the end

Also I agree the fee route is the way to go ( but even that isn't cut and dry with fund/commision rebates etc), problem is on a lot of case people either can't afford or wont pay the £250/£500 it costs to do the review, saying that it will all change in 2013 when RDR comes in.

[garlok]

Re: Protect your Pension

I've never had to pay that level of fee to an IFA, in fact in the twenty years or so we have been with them I have NEVER been asked for a fee. They are good enough to make their money from commission and the like which I know about up front when a matter is discussed.

However on the pension issue, the first evening it was discussed I was given a lot of literature to read, plus some pinters to do further research and a full explanation how I might take up a plan(s) and how they worked which involved them getting NOTHING at all as is required under the regulations.

Hargreaves Lansdowne and other companies like them operate in the SIPP market ( self invested pension plan) which has many advantages whilst times are good as there is no purchase of annuity as such. The capital sum remains in the ownership of the client and on death the "pot" becomes part of the estate of the deceased. Simplified I know but in principle for the layperson.

Perhaps mgfboy you would like to explain the "long bond" to us and its relevance to pension plans? I know a bit but further clarification would always be welcomed for the benefit of others.

regards
Garlok

[mgfboy]

Re: Protect your Pension

Long bond is a bit of generic term, what do you want to actually know?

Actually it might be better if you PM me with your questions as this thread is getting way of it's starting point.

[garlok]

Re: Protect your Pension

here you go green bowler:-


"If you file for bankruptcy, your entitlement to the State Pension (see The Basic State Pension) and state second pension (see State Second Pension) will not be affected. If your pension scheme is approved by Her Majesty's Revenue and Customs, your pension rights will usually be protected against bankruptcy. If your private pension scheme has not been approved, it may be seized and used to help pay off the debts you have accumulated. It might be possible for you to negotiate with your trustee and retain some or all of your pension rights. A friend or relative may be required to pay some money to prevent your pension rights being lost. The options open to you will depend on your individual situation and the ruling of your trustee. If you are already receiving a pension, your pension rights will usually be protected but you may be required to give some or all of the pension payments you are receiving to your trustee to go towards repaying your debts. For more information, contact the Pensions Advisory Service on 0845 601 2923, ask your pension scheme provider for their terms and conditions regarding bankrupt scheme members, or ask an independent financial advisor or an advisor at your local Citizens Advice Bureau for further assistance."

This comes from here:-

>Debt and Bankruptcy and Your Pension - Monetos.co.uk

That should clear up some of your questions.

regards
Garlok

[IF]

Re: Protect your Pension

This is the link we recommend :-

Pensions | Personal | BIS

If...x