Police Pension Scheme Transfer to SIPP blocked

MARKYMARK675 · 16 March 2015 at 11:10PM

A colleague has just learned that the transfer of Cash Equivalent Transfer Value into a SIPP that he has chosen before cut off date in April, has been blocked, between the SIPP provider and the Police pensions administrators. On speaking to SIPP providers, it appears that they have been 'leaned' on, by the government, and told not to accept Police Officers business, despite a transfer out being above board, and in line with allowing an individual to make their own decision.
This is something I am/was seriously considering doing myself, after reviewing the retirement benefits, and noticing that no benefits are passed on beyond that of your widow. So, no financial legacy to leave for the kids.
In service benefits are pretty good, for I'll health and death etc, but not essential if your well insured.
I prefer the idea of long term growth for my last ten years and beyond, with a view to a 25% tax free lump sum at 55, and a modest drawdown beyond that. Even modest growth of around 12% per annum would blow the Police benefits out of the water, and the tax free benefit of being able to pass on to family, beyond that.
IFAs think these Final salary pensions are gold plated, and guaranteed, but only if the government doesn't seek to decimate it, which they have already started.
Would you pay 400 per month in for 35 to 40 years to get a lump sum of 40000, and 18 grand a year. With two pension reviews and changes in the last eight years, I don't think they have finished yet.
Anyway, rant over, Does anyone know any SIPP providers that will take my business????????
I'm tired of having no money left each month, because of having to shell out 420 a month to fund my vanishing pension. PLEASE HELP
Or I might have to try and work as an MP , with the big pay rise, big pension(for doing !!!!!! all work for two years, and paying !!!!!! all in), plus expenses.

kidmugsy · 16 March 2015 at 11:18PM

"Even modest growth of around 12% per annum": fantastic. In the original sense of the word.

atush · 16 March 2015 at 11:50PM

It was blocked perhaps as being financially unwise.

Try a different sipp.

and try to garner a better argument

MARKYMARK675 · 16 March 2015 at 11:54PM

Clearly not 'Modest' when you compare to high st bank rates. I'm talking about global investment trusts over the long term.

greenglide · 16 March 2015 at 11:57PM

I'm tired of having no money left each month, because of having to shell out 420 a month to fund my vanishing pension.

£420 per month before tax relief I presume?

Maybe it isn't as generous as it was and it certainly isn't a job that I would ever have considered to do but it is still good.

If you are not happy then leave the pension scheme and put much more into a personal pension?

MARKYMARK675 · 17 March 2015 at 12:13AM

I would love to leave the scheme, that's the point, but into a SIPP.
Why pay into another pension scheme?, they are all crap, which is why mine looks good, for now...., till the next round of cuts to public services. yes, it's before tax relief at 20 percent.

redbuzzard · 17 March 2015 at 1:04AM

Well a SIPP is also a pension scheme, and whilst it isn't directly comparable with a defined benefit alternative it doesn't have the benefit of somebody else chipping in to it.

I don't know the police pension scheme, but if you are going to do comparisons for heaven's sake do them robustly with a sensible range of returns. Consider the worst case as well as the best, which 12% certainly is. Run it at 4% and 7%.

Remember the risk of investment performance is with the scheme while you are in it. With defined contribution, you can never predict what your fund will be until you get to the end, or what secure income it could buy.

mgdavid · 17 March 2015 at 1:18AM

MARKYMARK675 wrote: »

A.......
Would you pay 400 per month in for 35 to 40 years ......

You weren't paying 400 a month 40 or even 35 or even 25 years ago. Keep it factual and non-emotive and you will likely receive better responses.
Which SIPP provider were you trying?
IIRC Standard Life are more amenable than most.

jamesd · 17 March 2015 at 1:44AM

MARKYMARK675 wrote: »

Even modest growth of around 12% per annum would blow the Police benefits out of the water

The long term average growth of the Uk stock market has been around 5% plus inflation over the last hundred plus years. Today hat means around 8-9%.12% isn't modest, it's quite ambitious. If that was given as a break-even growth requirement it would be reason enough to reject the idea of transferring.

MARKYMARK675 wrote: »

Would you pay 400 per month in for 35 to 40 years to get a lump sum of 40000, and 18 grand a year.

that looks like a good deal. Plugging that and the historic UK 5% real growth into a regular savings calculator gives a final pot size of £545k after 35 years, enough to pay 4% inflation-linked if using a common measure for safe drawdown. But this alternative means taking investment risk both while growing the money and in retirement so the Police pension looks like the better idea.

MARKYMARK675 wrote: »

Does anyone know any SIPP providers that will take my business???????? ... PLEASE HELP

What are your age today and the transfer value you've been quoted? What is the projected police pension value and at what age is that? Knowing those things it'll be possible to work out how good or bad the deal you've been offered is compared to staying in.

Don't bother trying Hargreaves Lansdown, they won't take transfers from unfunded public sector pensions even when the person is dying within a year and will lose the whole pension value if they don't transfer it.

dunstonh · 17 March 2015 at 9:47AM

A colleague has just learned that the transfer of Cash Equivalent Transfer Value into a SIPP that he has chosen before cut off date in April, has been blocked, between the SIPP provider and the Police pensions administrators.

Quite normal where no advice has been sought.

On speaking to SIPP providers, it appears that they have been 'leaned' on, by the government, and told not to accept Police Officers business, despite a transfer out being above board, and in line with allowing an individual to make their own decision.

There has been no such Govt leaning. The FCA on the other hand does have influence in this area and has used it.

This is something I am/was seriously considering doing myself, after reviewing the retirement benefits, and noticing that no benefits are passed on beyond that of your widow. So, no financial legacy to leave for the kids.

That is a negative of defined benefit schemes. However, to get improved death benefits you will end up with far less retirement income and lump sum if you do this.

I prefer the idea of long term growth for my last ten years and beyond, with a view to a 25% tax free lump sum at 55, and a modest drawdown beyond that. Even modest growth of around 12% per annum would blow the Police benefits out of the water, and the tax free benefit of being able to pass on to family, beyond that.

Modest growth of 12% per annum???? What planet are you on.
What is the critical yield required on this transfer? Its a key bit of info anyone should have when transferring an occupational pension.

IFAs think these Final salary pensions are gold plated, and guaranteed, but only if the government doesn't seek to decimate it, which they have already started.

And you think 12% returns are modest and that your pension is vanishing. I think the IFAs have greater credibility.

Would you pay 400 per month in for 35 to 40 years to get a lump sum of 40000, and 18 grand a year. With two pension reviews and changes in the last eight years, I don't think they have finished yet.

I would take police pension every time. Far better value for money than a money purchase scheme.

Why pay into another pension scheme?, they are all crap, which is why mine looks good, for now....,

Clearly, you don't know what you are talking about. You talk about investing in Investment Trusts but then say pension schemes are crap. This indicates a lack of knowledge and understanding of pensions and investments. Clearly not someone who should be carrying out this high risk transaction that statistically likely to result in being financially worse off.

You are giving factually incorrect information and appear to be basing the decisions on emotions that are wrong. You are good example of why providers have these safeguards.

atush · 17 March 2015 at 11:08AM

It seems to me a police officer should be able to better marshall his facts, and keep emotion out of any investigation.

Police Pension Scheme Transfer to SIPP blocked

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