In today’s workplace, the days of
a job for life are long since over. Many people will change jobs ten to fifteen
times during their working careers. Their workplace pension can become a
casualty of these frequent changes, with pension arrangements being made and
removed on leaving the employer.
Most of the UK’s leading pension
providers follow a standardised process which ensures that the former employee
retains their benefits and ceases the pension relationship between themselves
and their former employer.
At the time of leaving service
with their current employer, employees will receive a leaving service pack
which will confirm their options and most likely include a direct debit
instruction to continue contributing to their pension personally.
The pension plan is converted by
the provider into an individualised arrangement, and once this change has been
made both the employer and their engaged financial adviser, both cease any
liability or obligation to provide assistance to the former employee.
Starting a new job will most
likely result in an additional pension being set up for the employee by their
new employer. The employee can then choose to transfer the existing plan into
their new arrangement or continue with two (or more) plans. This can create
administration issues both during employment and at retirement.
Employee awareness and
understanding is therefore vital to this process and it is the responsibility
of the employer to ensure that the employee knows what comes next.
Robert Simmons
Corporate Pensions Administrator
Telephone: +44 (0)20 7893 3456
Email: contactus [@] broadstone.co.uk
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