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Closed defined contribution pension scheme

Started by JLS77, 12-06-23, 12:43PM

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JLS77

I recently requested a transfer value quotation for the old defined contribution pension. Nasty shock to say the least when I discovered the value of the entire pot has been reduced by an eye-watering 35% in just 3 years. Theoretically it could lose its entire value if the investments markets crashed. Unlikely, but not impossible.

So that's over 10 years of salary sacrifice slashed by over a third in value.

I knew I should have transferred to the new scheme, but like most people, the idea of paying a 3k fee to a financial adviser put me off.

Anyone else in the same boat? Anyone transferred to the existing scheme?


 

chris9997

#1
 I do hope there is a reason for this, a statement from Tesco some weeks ago regarding a huge loss to the pension fund last year due to poor investments was that the huge loss was not a problem as the fund is in good shape, well it would be if peoples pots were decreased to cover this, possibly another pension scandal !

1982dave

I'm sure with the old pension pot a few years back when it was stopped there were some  news articles that there was a massive shortfall that Tesco needed to cover what people had paid in with what's been put on here it seems that thats been proven right

JLS77

Quote from: chris9997 on 12-06-23, 08:12PMI do hope there is a reason for this, a statement from Tesco some weeks ago regarding a huge loss to the pension fund last year due to poor investments was that the huge loss was not a problem as the fund is in good shape, well it would be if peoples pots were decreased to cover this, possibly another pension scandal !
Was that the existing scheme or the old one though?

BlueToon

Who is the current holder of the older defined benefit scheme?
Is it L&G?  Or someone else?

BlueToon

Forget the above question.
I have found out.

Theodore

Is that just the transfer value that's fallen or has the annual payments if you leave things as they are as well?

valleyboy

@ bluetoon

You have the answer to your question, maybe you could share, as to benefit anyone else wanting the answer


Attilla

Just had a statement from the pension trustees. Saying that the fund was "fully funded".

JLS77

Here's the most recent reply I received -

Dear Member,

 

Thank you for your e-mail.

 

Please note the changes in value are due to MVA ( Market Value Adjustment) factor changing, hence please consider the changes in value in the new Transfer quotation.

 

Also note MVA factors change every 3 months as per market fluctuations.



I think there are going to be quite a few people who will be shocked when they see how much the value of this pension has fallen. There's nothing stopping it going lower, or theoretically, even going to zero.

BlueToon

Quote from: valleyboy on 15-06-23, 07:41AM@ bluetoon
You have the answer to your question, maybe you could share, as to benefit anyone else wanting the answer
What I found was here,
https://www.ourtesco.com/reward-and-benefits/retirement-savings/closed-pension
Which takes you to the following,
https://pensionwebsite.co.uk/

It looks like it is Tesco Pension Trustees that are actually holding/running the funds in the old scheme.
""© Tesco Pension Trustees Limited 2021""

All the forms to request various options are on the site there.
Hope that helps.

2ndtimeround

The transfer value of the pension is only relevant if you were going to transfer the funds out into another scheme, the actual value of the pension you could receive from the Tesco pension scheme has not gone down.
I looked into transferring out but was better off by taking the tax free lump sum and an annual pension.

HalloweenJack

What happens if the value falls so much it becomes worthless? Will we be charged for the `managment1 of it?

NightAndDay

Quote from: JLS77 on 15-06-23, 04:32PMHere's the most recent reply I received -

Dear Member,

 

Thank you for your e-mail.

 

Please note the changes in value are due to MVA ( Market Value Adjustment) factor changing, hence please consider the changes in value in the new Transfer quotation.

 

Also note MVA factors change every 3 months as per market fluctuations.



I think there are going to be quite a few people who will be shocked when they see how much the value of this pension has fallen. There's nothing stopping it going lower, or theoretically, even going to zero.
Pension fund providers have a fiduciary duty to you to ensure an appropriate balance between risk and growth is implemented in your fund by diversification and other risk reducing strategies, this is due to the management/admin fee that they deduct from the pot.

Unless you've opted to manage it yourself, (and should get a reduced admin fee for doing so) you may have a legal claim against the pension fund provider for failing in their fiduciary duty, you are also protected by the governments pension protection fund that will in most cases fund any losses caused by such activities.

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