Question of Finance: What steps can I take to secure my pension?
Published 02/09/2010 | 05:00
Q PENSIONS are always in the newspapers for one reason or another and the latest news I have read is that our pension funds may not be as secure as we would believe.
This is a very worrying thought.
So I'm left wondering if there is anything that can be done to protect my retirement pot?
A MANY people are now asking themselves, are pensions not ringfenced? Protected from employers, creditors and indeed the members themselves? The answer is a qualified 'yes'.
But there are various steps people can take to structure their pension assets to enhance security.
In general, trust-based arrangements are more secure than other types of pension benefits. Therefore, those with buy-out bonds, personal retirement savings funds or personal pensions held under insured contract could consider transferring to a trust-based retirement annuity contract or occupational pension scheme as appropriate.
Some benefit structures also offer inherently better protection than others.
For example, certain approved retirement fund (ARF) arrangements have an underlying trust structure.
This offers potentially better protection to the owner and therefore should certainly be considered in appropriate circumstances.
Within ARF arrangements consideration can also be given to the use of approved minimum retirement funds (which are subject to additional ringfencing up to age 75).
Annuities, because of the nature of the annuity contract, are inherently less attractive to third-party creditors. And it is possible for all forms of pension arrangement, including ARFs, to be converted into annuities. n Aidan McLoughlin, managing director, Independent Trustee Company.