Pensions and Oscars - Different types of pensions
The surprise winner of the Best Film Oscar 2014 was the Birdman aka The Unexpected Virtue of Ignorance. Birdman was the story of a washed up actor tries to reclaim his fame on Broadway with a new play. As this is happening, he has to handle with new actors and has to re kindle his relationship with his daughter. But most importantly he has to escape the shadow of the superhero he used to play, Birdman.
The parallel in the pensions world is the defined benefit pension scheme. Many customers thought that the only type of pension available to them was the defined benefit until the late 80s. The 80s, the years of big hair and big shoulder pads, and a belief that we could all become stockmarket millionaires. What followed was the dark years of pensions when members of defined benefit schemes were convinced to transfer out and go it alone in personal pension plans.
Who would have thought after all the blood spilt on the pension transfer review that transferring out of a defined benefit pension scheme would ever be considered? But it has! Members of defined benefit schemes are considering transferring out due to some eye watering transfer values being offered as a result of the low interest rates.
Unlike Birdman, the new Defined Contribution actor is seen as the star but, like the film, the washed up defined benefit scheme is struggling to escape its tag of boring certainty of a guaranteed pension that has no freedom or flexibility. The decision to transfer out of a defined benefit scheme is very personal and really depends on the members’ personal circumstances. Just like the content of the Birdman film, one type of scheme should never be seen as better, especially on the basis of length; they are just different.
You can find out more about the types of pensions available and what they offer you here. Alternatively, if you have a question about your pension or your options please contact our team direct on 0300 123 1047 (Mon - Fri, 9-5)