Frozen Company Pension Scheme

Managing Your Frozen Company Pension Scheme

If you have been part of a company pension plan and you then decide to leave the company, your pension plan can be frozen. For this to happen, you usually need to have worked for the company for at least two years. When you leave, your contributions and those of your employer will remain in the pension fund and will grow in line with the total fund, but you will be unable to make any additional contributions to it.

If you are likely to be moving jobs on a regular basis, you may end up with several frozen company pension schemes. Depending on the amount you have invested in the frozen scheme, and the benefits you get from it, it may be worth considering transferring the funds into a personal pension plan. Frozen pension benefits within a final salary scheme are better referred to as a preserved pension.

There is currently a lot of media coverage focusing on a general lack of pension planning, and this may cause concern if you have one or more frozen company pension schemes. Pension legislation is highly complex, and has become more so since the rules and regulations have been tightened during the last decade. This means that the best way to sort out your pension provision is to talk to a pensions adviser.

Independent pensions advisers have a thorough knowledge of the market, and are not tied to providing advice on a certain set of products. Instead, they can look at the value of your current pension schemes, compare the benefits to other schemes on the market and make some recommendations as to which options are best for you. Consulting an independent pension adviser about your frozen company pension could leave you in a much better position at retirement.

Having a frozen company pension doesn't mean that you have no pension provision, it simply means that you need to take that pension into consideration when you are making other plans. Whether you decide to start a personal pension plan, take advantage of your next company's in-house scheme, or transfer your existing funds into a new scheme, at least you are making sensible decisions and plans for your retirement. Remember to check the benefits you are currently entitled to, so that you can compare the various options available to you. Even frozen company pension schemes can have better benefits than some personal pension plans and you need to be very sure that the schemes you are part of are offering the best benefits to you.

If you are considering changing your pension arrangements, effecting a pension transfer, or need advice on starting a pension, then contact our panel of pension transfer advisors. Fully qualified, regulated by the FSA and independent, they can advise you on the best course of action to ensure a comfortable retirement.