In the past ten years, a large number of businesses have frozen their retirement benefits to get rid of the expenses associated with abandoned pensions. This frozen pension trend inflated following the recession. If you’re a British citizen who relocated to another country for work, there are certain regulations attached to unfreezing your old pension plan.
The Dangers of a Frozen Pension
It’s important to remember that your previous employer can’t recede the benefits you have earned. However, if you’re currently making contributions to a new pension plan (often called as the definite benefit plan), the benefits of your previous pension plan won’t increase anymore. This is a disadvantage especially if you worked for the old company for a long time. Pensions reach their optimum value in the last working years before hitting the retirement age. This essentially means losing a substantial cash flow that you can use after retiring from work. When the frozen pension cements your benefits, you will start from scratch again and try a new method of saving.
Help for Individuals with Frozen Pensions
To avoid this from happening, the first thing you need to do is talk to a Human Resource personnel at your new workplace. Find out the details of your pension plan. Your next step must be to contact a financial adviser, a solicitor, or a retirement agency to help you handle the problem. Don’t automatically assume that you can never get your funds and/or benefits back. Some companies prefer to present the pension funds as a lump sum while others have flexible regulations with regards to retirement benefits.
It’s important that you find someone that handles overseas pension problems. For better and more accurate processing, stick with a firm that is well-versed with UK pension plans. Keep in mind that every country has its own retirement plan structures. What’s allowed in the US may not be permitted in UK transactions, and vice versa.