Public sector pension transfer value request

Hi, all -
This is a request for opinions on the legality of the following -
My home and family are in Spain, and have been for the last seven years. For the last 18 years I have worked as a firefighter in the public sector.
We have planned that I take early retirement from the brigade this August (so that I can go home) by transferring my pension fund into a QROPS scheme, which would allow me to draw benefits at 55. If I leave the brigade and merely freeze my fund than I am told I will not be entitled to draw benefits until I am 66.

So I have asked for a transfer value, but I am being told that, due to the changes afoot (eg: RPI to CPI basis) then the governement are freezing all valuations and transfers now - maybe for the next few weeks, maybe for six months!

Can this be legal? It is, after all, my fund, and surely I have the right to ask for a transfer whenever I wish? Can anyone throw any light on this for me, please?
Many thanks!
«1345

Comments

  • dunstonh
    dunstonh Posts: 116,041
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    Can this be legal?

    If you think its illegal then you phone the police. If you believe its unlawful then you contact a solicitor.
    We have planned that I take early retirement from the brigade this August (so that I can go home) by transferring my pension fund into a QROPS scheme, which would allow me to draw benefits at 55.

    As would transferring it to a personal pension or SIPP. although no option is likely to be as good as leaving it in the scheme.
    If I leave the brigade and merely freeze my fund than I am told I will not be entitled to draw benefits until I am 66.

    Have you had that confirmed in writing?
    surely I have the right to ask for a transfer whenever I wish?

    Have you reached age 55 yet?
    Have you terminated your employment yet?
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Pixieboy
    Pixieboy Posts: 137 Forumite
    I assume you are in the Firefighters Pension Scheme and not the New Firefighters Pension Scheme, because of the length of service. If so a deferred pension would be payable at 60; even under the NFPS it would currently be 65, so I'm not sure where 66 has come from.
    Regarding the response to your request for transfer details - this is correct, HM Treasury have issued an instruction that all public sector schemes should not use the current factors for transfer calculations while they are being reviewed in light of the announcement that future increases will be based on CPI rather than RPI. It is not clear, at present, how long it will be until the matter is resolved.
    HM Treasury statement is on the front page of this document http://www.hm-treasury.gov.uk/d/publicservice_pensions110908.pdf
  • Pixieboy, thankyou for the link to that document.
    Yes, I am in the original Pension Scheme. To clarify, I am 42 years of age with 18 years' service. I am not looking to draw benefits from the scheme until I am 55, but would prefer the fund to be placed in a QROPS to grow in the interim.
    Excuse my ignorance (I am a firefighter without a financial background!) but how does the tweaking of calculations for future increases affect the size of the current pot? Are we likely to see a serious downsizing of the fund value I had at 30 June 2010?
  • dunstonh
    dunstonh Posts: 116,041
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    As you have not reached 55 and have not terminated your employment yet then that explains why you cant transfer it at this time.
    but would prefer the fund to be placed in a QROPS to grow in the interim.

    On what justification would you want to do that?
    how does the tweaking of calculations for future increases affect the size of the current pot?

    Its a defined benefit scheme so it doesnt have a "pot" or fund value. The only time values come into it are when you want to transfer. I doubt the changes would have a serious impact on the transfer values. The most damaging thing is the fact you are looking to transfer it into an almost certainly inferior option.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • vbm
    vbm Posts: 116 Forumite
    OP, you are almost certainly making a very serious mistake in looking to transfer your preserved pension.

    My advice is seek out an advisor, who may well be able to help you achive your goals (income from 55 ? ) without taking this course of action.
  • Jacka87
    Jacka87 Posts: 369
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    I have to say that I have always been told that a final salary (defined benifit) scheme is by far the best scheme posible and the only way I could see any reason why you may wish to move to any other scheme is if you felt you where not going to live very long and thus not take the advantage of the rest of your life income!
    Here to help and be helped!

    New to MB, running profit, £16 from MB, £30 cashback!
  • Thanks, all - I appreciate your advice, which overwhelmingly favours leaving the pension where it is.

    However - when we moved to Spain originally, all of our careful money planning was built around the fact that I would retire at 50, as was the case then.
    Things have changed, and are changing still, and look set to change yet again. We're tired of chasing a moving target and would rather move what we have into an investment vehicle that allows us more control and will certainly allow me to commence drawdown at 55 (regardless of any more rolling goalposts in the UK) while in the meantime I may live and work in my home in Spain.
    Public sector pensions have become a popular scapegoat (hardly fair at the bottom end of the scale, where we have always accepted lower wages than those available in the private sector for an equivalent job, but happy to know that our pensions would make up for it) and who knows how things will change further?
    Therefore I need to try to make my situation a little more controlled, and I need to do it before the window of opportunity that is QROPS closes too.

    I'm now reading that CETV figures are expected to be frozen for around three months. This seems harsh considering that a date for implementation of the CPI basis for evaluation hasn't even been determined officially yet!
  • vbm
    vbm Posts: 116 Forumite
    Does your Spanish QROPS allow drawdown ?

    Why not transfer to a PP in the UK and commence drawdown from there ?

    I assume you have contacted the scheme and asked about early retirement. Even with the actuarial adjustments, you still still likey to be better off and with a fixed level of income.
  • vbm - yes, drawdown is acceptable after 55 years of age, as long as it doesn't deplete the fund too soon - it has to remain a pension fund, after all, although it wouldn't die with me.

    The main reason originally for choosing a QROPS rather than a UK PP route was the avoidance of eventual annuity purchase. I know that there is a lot of talk about changes there, too, but frankly I'm sick of the uncertainty in the UK. And if I opt for a PP there and then there are further changes to take the private pension age to 60?

    Also, I live in Spain (residentially if not fiscally at the moment) so why would I want a UK PP, particularly?
  • JamesU
    JamesU Posts: 1,060
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    cookiecrew wrote: »
    Also, I live in Spain (residentially if not fiscally at the moment) so why would I want a UK PP, particularly?

    In addition to OPs' comments above, remembered a similar discussion elsewhere and found it! Link below covers similar ground on fire brigade pension and QROPS. Worth a read:

    http://www.candidmoney.com/questions/question107.aspx


    JamesU
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