Any pension fund experts on here

[paulatky]

With the fall in the stock market ,many pension schemes will now be significantly underfunded.
With the many schemes having March 31st yearends annual statements will show schemes being underfunded by upto 25%

Are there rules in place to guarantee minimum funding levels.

[Dy1geo]

Have a look at when the next actuarial review is due to take place as it is after that, that the trustees speak and agree with sponsoring employer a plan to address any shortfall.

In your annual report from the schemes trustees they will give an annual indication of the financial position of the plan and base it on paying out the benefits and if they needed to purchase the benefits elsewhere.

The main issue is the financial position of the sponsoring employer.

[paulatky]

It is March and last annual report stated a 5% shortfall.
The next report based on the position at the end of March 2020 will show a much worsening position. Maybe more than 25% shortfall.
Would such a shortfall be allowed or would the employer have to make it Good immediately

[thatdberight]

It is March and last annual report stated a 5% shortfall.
The next report based on the position at the end of March 2020 will show a much worsening position. Maybe more than 25% shortfall.
Would such a shortfall be allowed or would the employer have to make it Good immediately

It would be allowed

[Lowbankclaret]

It’s likely all the calculations have been done already.

I don’t think any company has been made to do anything about a shortfall immediately.

It’s normally a several year plan.

[CleggHall]

Think long term, it'll all be right by July, markets will bounce back, at such low interest rates money has nowhere else to go.

[Dy1geo]

It is March and last annual report stated a 5% shortfall.
The next report based on the position at the end of March 2020 will show a much worsening position. Maybe more than 25% shortfall.
Would such a shortfall be allowed or would the employer have to make it Good immediately

Was that just the annual report or the full actuarial evaluation of the scheme that is every 3 years. After that the trustees agree a plan with the employer.

Without getting too technical a lot of schemes have moved a lot of their assets into fixed interest bonds such as Gilts and they have actually gone up in value recently but the trouble is the yields on these assets which they use to pay the statutory income have dropped hence there will be a nominal shortfall but on the plus side due to the low Gilts yields transfer values have risen.

[paulatky]

Think long term, it'll all be right by July, markets will bounce back, at such low interest rates money has nowhere else to go.

Think July is a lot optimistic. The effects of the virus will be around a lot longer than that

[claretonthecoast1882]

Think July is a lot optimistic. The effects of the virus will be around a lot longer than that

If we are all gonna die this year from corona surely you can just forget about the finance part of life ?

[paulatky]

If we are all gonna die this year from corona surely you can just forget about the finance part of life ?

Thats the real issue . We are not all going to die.
Worst case scenario 2% say 1.4m ,but we will all be affected in some way by the economic fallout.

[paulatky]

Was that just the annual report or the full actuarial evaluation of the scheme that is every 3 years. After that the trustees agree a plan with the employer.

Without getting too technical a lot of schemes have moved a lot of their assets into fixed interest bonds such as Gilts and they have actually gone up in value recently but the trouble is the yields on these assets which they use to pay the statutory income have dropped hence there will be a nominal shortfall but on the plus side due to the low Gilts yields transfer values have risen.

Have you any advice about transferring the defined benefit pension I am already getting.
Is there anyway I could cash it all in and take it all as cash immediately

[jollyjack]

If you're in a defined benefit scheme, dont mess around with it, its as good as you can get. Take more than 25% of its value in cash and youll be taxed on it, possibly at higher rate if its over £50k.

[TVC15]

Have you any advice about transferring the defined benefit pension I am already getting.
Is there anyway I could cash it all in and take it all as cash immediately

You might struggle to find anyone to do that for you at the moment - advisors was nervous about transfers before the crash so goodness knows how they are now.
If you do find someone prepared to advise you then it’s not a quick process - it’s an in-depth piece of analysis to reach a recommendation as to whether it’s the right thing to do.