getting a cash equivalent offer

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stdom66
stdom66 Posts: 4 Newbie
in Pensions, annuities & retirement planning
Hi--ive just phoned my company pension department and asked for a cash equivalent transfer value but they said they can only do that if i am a deferred pensioner-ie. leave the pension scheme. This seems like a catch 22 since i want to know how much it would be worth before i transfer. I am in a final salary pension which is a very good one but obviously with transfer values sky high at the moment would be contemplating investing it myself so anything left after something happens to my wife and i can go to the children. Does anybody know a way round this?

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  • xylophone
    xylophone Posts: 44,427 Forumite
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    You are still working for the company but wish to leave the scheme (and thus become a deferred member) but carry on working for the company without benefit of pension?
  • Drp8713
    Drp8713 Posts: 902 Forumite
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    You have no right to a transfer value until you leave the scheme, as youre still accruing benefits each day, therefore by tomorrow it will be wrong.

    It would be a waste of their time. To be able to transfer you will likely need two things: to opt out and an IFA.

    Finding an IFA who will tell you to opt out of a final salary scheme is going to be impossible.

    In my opinion there are only three reasons people transfer out of DB schemes.

    1. Greed.
    2. Stupidity.
    3. Bad Planning.
  • AlanP_2
    AlanP_2 Posts: 3,253 Forumite
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    Drp8713 wrote: »

    In my opinion there are only three reasons people transfer out of DB schemes.

    1. Greed.
    2. Stupidity.
    3. Bad Planning.

    They are 3 possible reasons I grant you but not sure they are the only ones.
  • hyubh
    hyubh Posts: 3,532 Forumite
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    stdom66 wrote: »
    I am in a final salary pension which is a very good one but obviously with transfer values sky high at the moment would be contemplating investing it myself

    'Obviously'...?
    so anything left after something happens to my wife and i can go to the children. Does anybody know a way round this?

    Before you go headlong into the opting out option, what are the current terms? In particular, is it a public or private sector scheme? Is the scheme final salary or CARE? Is there a cap on pensionable pay (i.e. the amount of pay that is counted towards pension benefits) or not? Are ill health terms different for an active vs. a deferred members, and if so, in what way...?
  • sandsy
    sandsy Posts: 1,720 Forumite
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    So have you investigated what your wife and children would get from the existing scheme if you popped off this mortal coil right now? Do you have death in service benefits which are also provided as a result of being a DB scheme member or are they independent of the scheme?
  • stdom66
    stdom66 Posts: 4 Newbie
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    yes i am in death benefit scheme but looking to retire in 8 months. After retirement my wife would get half my yearly pension on my death, but if anything then happened to my wife thats all the money gone. Thats the benefit of opting out as children would then benefit
  • stdom66
    stdom66 Posts: 4 Newbie
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    I can assure you that i would not be jumping in with two feet until all possible avenues have been thoroughly researched. There are pros and cons on both sides. Greed doesn't come into it as the main reason for opting out would be so my dependants would be left a decent cash some in the event of my death. Also stupidity is pretty harsh unless you have 1st hand experience.
  • stdom66
    stdom66 Posts: 4 Newbie
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    Yes obviously-read the financial journals. Its a final salary pension. Once you retire ill health doesnt come into it. You still get the same pension.The benefits of staying in are that i get a decent lump some and a decent yearly pension and if anything happens to me my wife would get half the yearly pension but then if anything happened to her the money would then be stopped. If i opted out the 75% that would be invested would go to my children. Its a bit of a gamble depending on how you invest it. Both options have pros and cons.
  • greenglide
    greenglide Posts: 3,301 Forumite
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    So will you reach the Normal Retirement Age for the scheme in 8 months time? If so you may not be able the get the CETV as that option is normally not available one you reach NRA.

    If it is an unfunded public sector scheme you cannot transfer out anyway. You were asked this in post #5 but did not answer it.
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