This is one of a series of questions posed by the FT writes Josephine Cumbo.
The FT writes in answer to the question. “If you are a member of a defined contribution pension scheme and your employer closes, the money you have already built up in your pot, including contributions made by your employer, will remain yours.
If you have a defined benefit pension, you will be covered by the Pension Protection Fund (PPF), which continues to pay your retirement income if your employer becomes insolvent.
However, the pension will be reduced. If you are yet to reach scheme pension age, you will receive 90 per cent of your expected pension. Inflation increases might not be as generous as your workplace scheme.”
The key issue is looking forward not backward. As the FT states, if you have accumulated benefits, its more important to think about your finances today and what level of income you need for your future. You are once again is a rebuilding phase. If you get that right, existing pensions can be easier to deal with when you have financial peace of mind. Putting perspective in your decision making is vital.