Before I found my calling, I worked at a number of jobs,
some for a few months others for a few years. I know that many of my peers were
also searching for their passion. We were lucky being on the front end of the
Boomers, we landed in the workforce when the economy was expanding.
Being young
I never thought about retirement, nor did I think about the fact that for all
my jobs I paid into company pension plans. When I left the companies, I took my
severance, but did not think to ask what happens to the money that I had put
into the company or union pension plan.
Today many workers have done several jobs or over the years
worked for many different companies and many of these have company or union
pension plans, in addition to the Canada Pension Plan or RRSP's.
The amount of money in "lost pensions" is large
and concerning in the UK more than one million people have lost track of former
pension schemes. More than a million workers nearing retirement have lost
track of pension schemes to which they contributed they contributed in the
early years of their career.
The average employee will work for more than 11 companies
during the course of their career, but the culture of company-hopping has meant
that many employees are not claiming their pensions from funds to which they
have contributed.
Further compounding the issue, one in five workers aged
between 18 and 34 are unaware they are entitled to claim pension contributions
from an early works pensions, according to a survey published by retirement
specialists LV
The free for people in the UK, Pension
Tracing Service tracks down missing or forgotten pensions on your
behalf and provides you with an address and advice about how you can claim it
back.
Lost pension pots
The government aims to help retirees top up their pension
pots by tracking down lost or forgotten pensions, and have improved the Pension
Tracing Service to aid in this task. The free service tracks down
missing or forgotten pensions on behalf of workers and provides them with
advice about how they can claim.
People need to make sure they are claiming everything they
are entitled to in retirement. If you think you may have had a pension in a
previous job or you once paid into a personal scheme that you had forgotten
about, then the Pension Tracing Service may be able to help you to recover the
money you invested.
In an attempt to address the ongoing problem, the government
is due to launch a new initiative that allows workers to transfer
pension pots under £10,000 when they change jobs. The new laws will
take effect in October 2016.
The scheme will allow workers to have pensions automatically
transferred when they change jobs, although there are alternative options if
the pension fund of the new company is not as profitable.
Pension transfers
The Pension Schemes Act 2015 introduces safeguards and
“greater flexibility” in the transfer of pensions
and tax exemptions.
When an employee leaves a pension scheme, they are still
entitled to reclaim the contributions when they retire, but the new government
scheme may enable them to switch a workplace pension to a better fund, either
with a new employer, a private scheme, a self-invested personal pension, or a
stakeholder pension.
Just as with pensions, it is important for people to keep
track of all their finances throughout their career, and there are new online tools to track
all your savings and other investments available online.
Those considering moving their pensions to a different
scheme are advised to seek independent financial advice before deciding on the
best course of action to take for their retirement
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