The Emerson scheme has long been closed for all but the most senior employees, yet now they have announced internally that their final 475 active members will cease to accrue any further defined benefit pension rights from April 2016.
As per usual, the employer has been 'in consultation' over their plan, which normally means it will go ahead, subject to a few Ts and Cs and their lawyers getting to work on the finer detail.
In the case of Emerson, those top members of staff will likely have accrued the most pension rights, and therefore represent a very large portion of the company's pension fund - it wouldn't be surprising to find these members accruing £50k plus of pension income at retirement, but imagine managing a fund which has effectively underwritten those life-long pensions, no wonder it has closed and doesn't want to pay any more!
What's really important now is that those with an Emerson pension review their options in advance of the scheme closure. Sometimes being first in line can really make a difference. Emerson do not yet know how many of its members will explore the transfer-out route, but everyone should at least consider it, especially with high pensions. Remember, if your scheme gets into trouble (within your lifetime - as you will depend on their pension for lifelong income), it may apply to the Pension Protection Fund (PPF), which will put a cap on the amount of money you're paid. Currently, this is around £32,000 pa.
For more information about the PPF click here
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