Is 40 years not long enough?

By THIS IS MONEY
Updated:

 

MY retirement age is 65. At the age of 60 I will have completed 40 years with the company. I believe I am entitled to a full, final-salary pension at 60 because of my length of service, but my firm disagrees. What is the correct answer? LF, Maidstone

Des Hamilton, Technical Director at The Pensions Advisory Service, replies: The answer to any question of this nature must lie in the rules of the scheme. Therefore, my advice is to get a copy of those rules. You should apply to the trustees who must provide a copy within two months of receiving your request. They can charge for the cost of copying.

Without seeing this document, it is difficult for me to advise you as to who is right and who is wrong. I can only comment on what would be usual.

Commonly you will find that if the scheme provides one sixtieth of final pensionable service for every year of pensionable service, the maximum you will get at the scheme's normal retirement age(65 in this case) is 40 years.

If you were to leave at 60 the benefits would be scaled back. This would mean that the company is right, but don't take their word for it - check it out. When you get the rules, if you are still unsure, the Pensions Advisory Service at 11 Belgrave Rd, London SW1V 1RB will help interpret them for you.

Most watched Money videos