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Transferring into a new final salary pension from a preserved one
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dbs
Posts: 492 Forumite


I would like to transfer my preserved final salary pension into a new final salary pension at my present employer as it appears to have better benefits but would like a IFA to check both pensions out for me.
How do I pick an IFA on this subject?
How much should I expect to pay?
What questions should I ask?
Thinking of using this company www.origenfs.co.uk as they have been recommended by both employers.
Thanks
How do I pick an IFA on this subject?
How much should I expect to pay?
What questions should I ask?
Thinking of using this company www.origenfs.co.uk as they have been recommended by both employers.
Thanks
0
Comments
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Hi dbs,
You are wise to seek advice as this is an extremely complicated area. Very few 'final salary' schemes are the same, and even those that might first appear to be similar may end up having quite different benefits once a detailed analysis is undertaken.
Slightly off tack a bit in respect of what you've specifically asked for - but something that you ought to be aware of nevertheless is that a transfer from one defined benefit scheme to another (a final salary scheme is one type of defined benefit scheme) is not an activity regulated by the Financial Services Authority (FSA).
If you choose to use an IFA therefore, the advice that they give you specific to your transfer is not regulated by the FSA. Hence, if anything goes wrong - you have no comeback other than going through the Courts.
If you were asking for advice on a transfer to a regulated product such as a personal pension plan or Section 32 Buyout, and the advice was incorrect, then you would have recourse through the Ombudsman schemes.
A little known fact, but something to consider.
Addendum to my original reply:I would like to transfer my preserved final salary pension into a new final salary pension at my present employer as it appears to have better benefits...
Very difficult to quantify. What is better about your new scheme? How solvent is each employer, for example? What is the funding deficit of each scheme? What are your future prospects with your current employer?...but would like a IFA to check both pensions out for me. How do I pick an IFA on this subject?...
Ask for level of expertise and experience....How much should I expect to pay?...
Hourly rate / fixed fee?
Conservatively, I reckon for an IFA that has all of the information to hand from both sets of employers, at least 4-8 hours to do a report and recommendation.
For an IFA that has none of the information to hand and therefore has to start from scratch, 10-15 hours to do a report and recommendation. And then there are meetings, expenses and profit to factor-in....What questions should I ask?...
I've got about 100 plus (from each scheme), that I'd ask (honestly). Too many to list here. But to start with: dependants' benefits, accrual rates, NRD, early payment, pension increases in payment, guarantees, security, employer's covenant....Thanks
Sorry, don't think I've really been of help except to reiterate how complex this area is.
Feel free to ask more.
Mike Jones
I work in the field of Pension Education and Pension Guidance in the UK. I am a current member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.0 -
Basically I am concerned that my preserved final salary pension will be wound up into an insurance policy.
The pension is with Saint Gobain a massive global company but a few years ago they separated my Scheme into a new stand alone from the parent company U.K. Saint Gobain pension fund which was then split into 12 stand alone divisions due to the differing pension benefits which the trustees could not resolve to amalgamate together.
In my part of the scheme I suspect there is a high number of people receiving their pension due to factories being closed anyone 55 years old and above are allowed to take their pension if they are being made redundant.
Last actuarial valuation 5/4/2005 Full solvency position.
Shortfall 100 million
As % of insurance costs 38
The Scheme relies on the company`s continuing financial support in the future was also in the statement I received.
New employer is secure.
Pension is an open one.
No divisions within the pension.
Full pension at 60(my preserved one is 65)
Can pay AVCs0 -
Hi dbs,Basically I am concerned that my preserved final salary pension will be wound up into an insurance policy.
Since the introduction of The Pensions Regulator and the Pension Protection Fund back in April 2005, scheme members of a defined benfit scheme have much more security than was previously available.
Winding-up a defined benefit pension scheme is now much more expensive than beforehand and a sponsoring employer cannot simply walk away from it's obligation as easily as it could have before the introduction of TPR and PPF.
The PPF will ‘compensate’ you if, as a pension scheme member, your pension scheme suffers a ‘qualifying insolvency event’. Generally, this means that the sponsoring employer has gone into receivership. Your pension scheme must also have insufficient assets to pay pensions up to the level covered by the PPF. For preserved members, this level will be less than your full scheme pension.
The PPF does have it's critics and it would wise to read the Factsheets on its website to familiarise yourself with what is (and as importantly, what is not) available.In my part of the scheme I suspect there is a high number of people receiving their pension due to factories being closed anyone 55 years old and above are allowed to take their pension if they are being made redundant...
This has implications for you as the scheme is 'maturing'. If the scheme is closed and does not now accept new members, then the financial implications of improving life expectancy means that the sponsoring employer will have to fund for the widening mortality gap.Last actuarial valuation 5/4/2005 Full solvency position...
Ask for details of the most current valuation. Schemes must at the very least conduct triennial reviews.The Scheme relies on the company`s continuing financial support in the future was also in the statement I received......
Standard wording. It's like saying this car needs fuel to go anywhere!
Curious, though.
How old are you?
Mike
I work in the field of Pension Education and Pension Guidance in the UK. I am a current member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.0 -
Hi Mike Jones
Quote:
Originally Posted by dbs
Basically I am concerned that my preserved final salary pension will be wound up into an insurance policy.
Since the introduction of The Pensions Regulator and the Pension Protection Fund back in April 2005, scheme members of a defined benfit scheme have much more security than was previously available.
Winding-up a defined benefit pension scheme is now much more expensive than beforehand and a sponsoring employer cannot simply walk away from it's obligation as easily as it could have before the introduction of TPR and PPF.
The PPF will ‘compensate’ you if, as a pension scheme member, your pension scheme suffers a ‘qualifying insolvency event’. Generally, this means that the sponsoring employer has gone into receivership. Your pension scheme must also have insufficient assets to pay pensions up to the level covered by the PPF. For preserved members, this level will be less than your full scheme pension.
The old scheme is closed.
I do not think my former employers will go bust they now import products from abroad from the parent company.
Lastest full solvency position not available yet should be soon.
I am 46 years old.0 -
Been quoted £1000 pound by origen for the advice is this the going rate? said it would take up to six weeks.0
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Hi dbs,
There are specialist pension IFAs I know of who charge similar amounts and some whose fees are much higher (£1,500 to £2,000).
Some IFAs are VAT registered, and some aren't so don't forget to ask first!
Only you can judge whether it is good value for money. Did you have much pensionable service in your presvious employer's scheme and do you have any idea of the size of your pension / transfer value (just out of curiousity)?
Mike
I work in the field of Pension Education and Pension Guidance in the UK. I am a current member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.0 -
Hi dbs,
There are specialist pension IFAs I know of who charge similar amounts and some whose fees are much higher (£1,500 to £2,000).
Some IFAs are VAT registered, and some aren't so don't forget to ask first!
Only you can judge whether it is good value for money. Did you have much pensionable service in your presvious employer's scheme and do you have any idea of the size of your pension / transfer value (just out of curiousity)?
Mike quote]
I have 28 years with previous employer.
At May 2007 preserved pension of £8,135.01 per year payable at 2027 age 65.
Basic cash sum £24405.
Guaranteed minium pension £2000 increases at 4% per year compound.
Benefits in excess of guaranteed minium pension increase by the lower of increases in the retail prices index or 5% per year compound.0 -
VAT shouldnt be charged when advice results in a product being purchased. However, if no product is purchased then VAT should be charged.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.0
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