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can anyone help with a question about a final salary pension? in The AnswerBank: Business & Finance
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can anyone help with a question about a final salary pension?

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GRANDADGRA | 14:29 Tue 20th Nov 2012 | Business & Finance
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I am in a final salary pension scheme and every year the final sum has increased. But this year it has gone down by rather a lot. Is this correct?
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A final salary pension scheme is not dependant on the investment success (or otherwise) of the trustees. As the name suggests it is based on defined benefits calculated from the final salary of the member.

Are you still working/contributing or are you already drawing your pension? (i.e. have you seen a fall in your estimated pension or an actual...
14:53 Tue 20th Nov 2012
I assume it's the estimated final sum that has gone down.

This may be because they have changed the assumptions made and/or the way it is calculated. Have you received any communication from the scheme concerning this?

Or it could be an error
It does depend where the Trustees have invested the pension fund. The value of many funds has gone down, so the forecast would be affected. There should have been explanatory paperwork sent to you with your forecast.
I'm surprised at that as it's based on your existing salary, which I assume has not decreased..............
Sounds like the pension managers have downgraded the assumed salary increases expected between now and your retirement date.
A final salary pension scheme is not dependant on the investment success (or otherwise) of the trustees. As the name suggests it is based on defined benefits calculated from the final salary of the member.

Are you still working/contributing or are you already drawing your pension? (i.e. have you seen a fall in your estimated pension or an actual decrease in a pension you are already receiving).
cg51 they don't go on assumed salary increases but base it on your current salary. I was in a final salary pension and my estimated final amount always increased each year, as a) my salary had increased, and b) I had another years service.
The best thing to do would be, ring the pension trustees and ask them to explain it to you. There should be a number on the paperwork.
I agree with new Judge. Also, has the basis of the scheme changed- eg final salary to career average, different accrual rates?
You need to ask the trustees

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