my pension says i have a buy out plan option,what does that mean?
2007-10-28 00:49:23 · 4 answers · asked by odd socks 3 in Business & Finance ➔ Personal Finance
For full info/personal help from an expert, impartial and free source try:
http://www.pensionsadvisoryservice.org.uk/ask_our_experts/
2007-10-29 11:55:42 · answer #1 · answered by ! 7 · 0⤊ 0⤋
A lot of Companies have looked at the cost of providing Final Salary Pensions to Employees and decided that they would rather not take the risk .. however although they can change the deal for NEW Employees, there is not much they can do to EXISTING Employees.
A 'buy out option' is one way they encourage EXISTING Employees to give up their Final Salary Pension rights .. often the 'cash value' looks really attractive, however (as others have said) it is often a lot less than the Pension is worth ...
HOWEVER 'it all depends' .. a lot of Final Salary schemes have very attractive (i.e. very expensive to the Company) Death Benefits and Spouses Pensions ... if you are single with no dependents, these benefits are not going to be of any value to you so perhaps you are better off taking a 'buy out' ...
Before going for a 'buy out', consult an Independent Financial Adviser (the alternative = do nothing, is usually a safe option).
2007-10-28 08:31:13 · answer #2 · answered by Steve B 7 · 1⤊ 0⤋
it means your employer can pay you a large sum of money usually less than what your pension is really worth... IMHO dont accept a buy-out plan
2007-10-28 08:12:31 · answer #3 · answered by Jeramy K 2 · 1⤊ 0⤋
where for a set amount you can get a one time check and no more monthly payments --- depends on you situation if you should take it or not!!!
2007-10-28 09:41:02 · answer #4 · answered by mister ed 7 · 0⤊ 0⤋