How safe is my EDS pension?

[sweetandsour]

I have a small pension from when I worked at EDS. I also have a much larger stakeholder pension with AXA. With all the talk of pension defecits and companies going bankrupt is it perhaps worth transferring the EDS pension into the AXA one?. The EDS pension has lower fees so it better to keep the money in it but is it as safe? I phoned them out of interest and they said the money is just as safe as the stakeholder as it is administered by trustees. Is this true?

The most important question here is whether your EDS pension is a Defined Benefit or a Defined Contribution scheme.

A. If it is a Defined Contribution scheme then you have a personal pot of money much the same as your AXA stakeholder. This is money that has been put aside and held by trustees so there should be no concerns about the solvency of your previous employer.

B. If it is a Defined Benefit scheme then this is a promise to effectively continue paying you some deferred salary after you retire. This promise is worthless if the company that made it no longer exists.

I don't know what type of scheme the EDS one is but I would be surprised if it does not fall into category A above.

If it does fall into B then it is a better scheme because you have some certainty about the amount it will pay when you retire and for that reason it would probably not be a good idea to transfer it to a private provider* There is now a pension protection scheme operated by the government so that provides some additional protection for you (for as long as the country can afford it).

*I am in no position to offer financial advice and my comments should not be seen as such.

[moorfield]

just as safe as the stakeholder

Funny you should mention stakeholder pensions, for only today have they too been flushed down the toilet.

Another fine mess you've got us into, Gordon.

[pmeswani]

I have a small pension from when I worked at EDS. I also have a much larger stakeholder pension with AXA. With all the talk of pension defecits and companies going bankrupt is it perhaps worth transferring the EDS pension into the AXA one?. The EDS pension has lower fees so it better to keep the money in it but is it as safe? I phoned them out of interest and they said the money is just as safe as the stakeholder as it is administered by trustees. Is this true?

By law, all pensions are protected. The pension doesn't disappear if a company goes bust. If they do, the people who are entrusted with your pension are liable for prosecution. Whether the pension is worth anything, is dependant on the value of the funds at the time. However, if I were you, I would look at transferring all pensions into 1 pot, ideally into a SIPP or a pension you can manage and control.

[BiggieBig]

i'd be quite intreasted in this response as I also have a small EDS pension pot

[Lewis]

I have a small pension from when I worked at EDS. I also have a much larger stakeholder pension with AXA. With all the talk of pension defecits and companies going bankrupt is it perhaps worth transferring the EDS pension into the AXA one?. The EDS pension has lower fees so it better to keep the money in it but is it as safe? I phoned them out of interest and they said the money is just as safe as the stakeholder as it is administered by trustees. Is this true?