Final Salary Pension

Not knowing which company you worked for it is difficult to assess the importance of the large deficit.

Deficits are a photograph in time. If the day it is calculated share values have tumbled then it looks bad, but if a fortnight later the stock market has risen there may no longer be a deficit.

Your pension fund should be sending you an annual report, look in that and see what they say about the deficit.

If the pension fund does go under the government has set up an organisation that takes over the existing assets and commitments of the pension fund. This may mean a cut in your pension, but you will continue to get a pension.

Look at this site, it explains the situation very well. www.theguardian.com/money/2009/apr/11/company-pensions-safety

I think as an existing pensioner your rights come before those of any future pensioners and have more protection.

I've googled loads of sites regarding pension companies going defunct. I do receive an annual report and the deficit is getting higher each year. MOnica and Jalima1108 thank you for your advise and input into this matter.

Elizabeth, the main thing is that your pension will not disappear like those unfortunates, including my uncle, who saw their pension completely disappear when Robert Maxwell died.

There is a Pension Regulator who can require the company behind the pension scheme to pay money into the scheme to rectify the deficit. If the company does not have the money one of two things are likely to happen.

1) the company goes bankrupt and your pension is vested in the Pension Protection fund. As you are already drawing a pension that will remain unchanged but the annual increases you receive may not be as generous.

2) If the company is a good company and profitable, it may be sold, but the new owner will refuse to take on the pension scheme. The sale price will be paid into the pension scheme and it will be taken over by the Payment Protection Fund as before.

Here is the web site for the PPF. www.pensionprotectionfund.org.uk/Pages/homepage.aspx.

The main thing is that your pension will not disappear. There is a safety net.

Thanks MOnica I'm feeling greatly relieved at hearing this information

I'm in the same position, worked for a National Charity, it's been an underlying worry so very relieved to read this. The moral of the tale is to do my research..

It's a worrying subject - hoping yours will be ok, Elizabeth.
I sometimes worry about my LG pension, because even they are dependent on their investments being productive enoug hto cover the payouts.