Many people associate the word “Gold Plated” to Final Salary Pension schemes. Now while I agree that if you are an active member of a Final Salary scheme ie still with your employer and building on your benefits then those words are generally true.
For people that have left their employer and have become deferred members of the scheme ie the benefits are frozen, then this isn’t quite true.
Remember once you are a deferred member your benefits and the way they increase or not are calculated differently.
Most of the time the increases are linked to an index and generally the index is RPI, however since RPI in the UK has been in the negative zone for most of last year does this mean that your Pension entitlements are not growing or reducing?
Fortunately the benefits generally would not reduce, also in some cases certainly the Government schemes ie NHS Pensions there is a minimum increase built in if RPI (inflation) is lower. They now have a minimum 2.5% increase built in (it used to be 5%), still not a great increase if you have quite a number of years until retirement.
However for some they are not quite so lucky and I have seen this on quite a few occasions of late. There is no minimum built in which means that the benefits accrued up until 2008 are sitting stagnant in the UK.
So as Final Salary schemes tend to get good comments via media etc remember this is generally referring to people that are still active members of the scheme.
(Please note that the above comments are of a general nature only and do not constitute advice)