Following the wake of the pensions mis-selling review, new concerns have risen as to whether company pension schemes really are safe.
The pensions review was based on views that company pensions were better than personal pensions. However, many company pensions are closing with employees left hanging in the balance.The financial services industry regulator, the Financial Services Authority has been talking on the subject and it appears the case is no longer clear cut.
Many factors that have appeared over the years seem to be changing the view on which pension schemes are best. Factors include new accounting standards for company pension schemes, the fact that people are living longer and poor investment returns all compound problems.
An FSA spokeswoman said, "We would have said that final salary schemes were much better than money purchase schemes [such as personal pensions]. That situation has now changed.
Firms are pulling out of final salary schemes and there are shortfalls. You have to weigh these things up and take market considerations into account. Currently, the FSA does not plan to change the rules relating to pension transfers but many think that it will not be the case for long.