Stephen Katzenellenbogen
3 minute read
11 May 2020
3:47 pm

Could I lose my pension in the Covid-19 crisis?

Stephen Katzenellenbogen

A Moneyweb reader asked: 'I got retrenched in 2019. I am currently a paid-up member of my ex-employer’s pension scheme. I haven’t preserved or cashed my pension as yet. Can I lose my pension during this crazy coronavirus period? What would be better to do – cash or preserve – under the current unusual circumstances?'

Pensioner in poverty. Picture: Twitter

Stephen Katzenellenbogen, a wealth manager at NFB Private Wealth Management, answered: Great questions. The current market conditions are making even seasoned investors rethink their past decisions and their approach going forward. Let’s start on the risk of losing your pension fund. You get two types of pension funds: a defined benefit fund, and a defined contribution fund. The way you have framed your question leads me to believe you are in a defined contribution fund. In a defined benefit fund, the security of your investment is with the employer – they give you a defined pension on retirement. However, a...