Pension Transfer Advice

Discopiglet

I am looking for some advice about transferring my old pension into my new pension scheme.

My previous pension was a final salary scheme with SVSPS, administered by The Pensions Trust. My current pension is also final salary, administered by the employer. Shortly after starting my new job I provided details of my previous pension, to enable my employer to obtain a transfer quotation. Since then I have received two letters from The Pensions Trust, in June and October saying that they were waiting for the Scheme Actuary to sign off on the quotation.

In two weeks time I will have been at my new employer for a year. I am a bit worried that this seems to be taking a long time. I have never had to do this before, so can someone offer some reassurance or advice?

Kind regards
Kirsty

dunstonh

I am looking for some advice about transferring my old pension into my new pension scheme.

This isnt the place to get it, nor is anywhere on the web.

I am a bit worried that this seems to be taking a long time. I have never had to do this before, so can someone offer some reassurance or advice?

The only place you are going to get advice is from an IFA. Everything else you get it opinion (informed not necessarily guarnateed) or discussion.

6-12 months is not uncommon on final salary scheme transfers.

Discopiglet

dunstonh wrote: »

6-12 months is not uncommon on final salary scheme transfers.

Sorry for using the word advice, but what you've told me is useful. When they said in June it was happening shortly, I assumed it would be weeks rather than months.

My previous scheme was based on 60ths and my new scheme is based on 80ths plus lump sum. What sorts of things should I be aware of when the quotation comes?

Kind regards
Kirsty

MrChips

Time taken to process transfer quotations can really vary from scheme to scheme depending on the quality of the administrators, the time of year, and just luck. Anything over 3 months is pushing it a bit however and I recommend you/your IFA chase for it. If there are a pile of transfers awaiting processing, they will prioritise the one which they are being hassled for!

Since 1 October 2008, the rules for transfers changed so that the basis for transfers is the responsibility of the scheme trustees, and no longer that of the scheme actuary. Therefore this shouldn't be holding things up anymore.

By the sounds of it, SVSPS is a public sector pension scheme. Most schemes with a 1/80ths plus lump sum structure are also public sector (or former public sector) schemes. If both schemes are public sector, you should investigate if they are both in the public sector transfer club - if so you will (99 times out of 100) be able to get a much better deal from the transfer. However beware that most schemes will only accept a transfer via the club if you request it within a year of joining (or being eligible to join) your new scheme. If you miss the deadline due to the tardiness of the administrators, you may be able to get away with being a bit late.

Because the delay is due to the Scheme Actuary needing to "sign off the quotation", it seems you aren't getting a club transfer quote (the club basis is pre defined to no sign off needed).

If you do get a club transfer, you will get a certain number of years of service transferred into your new scheme. This should be roughly similar to the number of years you served in your previous scheme, but adjusted upwards or downwards depending on the relative generosity of the respective schemes.

If you get a statutory rather than a club transfer, you will either get additional service, or an additional pension payable from your retirement age. If additional years, it will probably be less than the number of years in your old scheme as the link with your salary will be restored which increases the value of your benefits (and thus you get a lower number of years) - your old benefits would be linked to RPI. If you get an additional pension, it should be roughly equivalent to what you would have got in your old scheme (but possibly adjusted if you get a pre determined lump sum).

Sorry for waffling - if you want any more guidance on something specific, let me know.

MikeJones_2

Hi discopiglet,

Whilst a scheme might take 6-12 months to complete a transfer, here are the legal requirements for issuing transfer values for defined benefit pension schemes:

Providing you with your transfer value - Within 3 months of your written request

Issuing your transfer value - Within 10 working days of the calculation date

Transfer value guaranteed for - 3 months from the calculation date

If you elect to transfer, when must it be completed - Within 6 months of the calculation date

Next statutory opportunity to request a transfer value - 12 months after the previous calculation date

If a scheme takes longer and you are disadvantaged because of the delay you have grounds for complaint and, where founded, redress (compensation).

The only exception I can think of, is where a scheme is being wound-up.

I hope this helps.

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.

MrChips

While all transfer quotes should be issued within 3 months of application, the deadline for issuing a transfer quote is actually extended to 6 months where there are good reasons which are beyond the Trustees' control (the example above may just about qualify for this although as stated before, given the new regs from 1 October, it should no longer be holding things up).

MikeJones_2

Hi MrChips,

MrChips wrote: »

While all transfer quotes should be issued within 3 months of application, the deadline for issuing a transfer quote is actually extended to 6 months where there are good reasons which are beyond the Trustees' control...

Agreed.

In such circumstances I'd always recommend that where this is used, and where the member suffers a loss because of a delay, the scheme member seeks an informed opinion/advice about the merits of what was used as the 'good reason' - just to make sure that the situation wasn't abused. Would you agree?

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.

MrChips

Yes - that's fair enough. I'd like to think the Trustees wouldn't abuse it but I guess that may just be naivity!

In this particular instance, I am guessing that Transfers were put on hold while the Trustees decided what to do post 1 October 2008 once the transfer basis became their responsibility. The scheme's transfer value calculation systems will have needed changing (and probably signing off by the actuary). As a result a backlog may have built up - hence it would be a very good idea for the OP to chase for it so hers is prioritised above the others who are less bothered (and who may have been waiting for less time).

Discopiglet

Many thanks to everyone for all the advice, I did not realise it was such a complicated process.

The first letter that I received stating that the quotation was ready, but was just waiting to be signed off was in June, so should I expect the valuation to be based on this date?

As I only chased The Pensions Trust last month, I will probably leave it until the start of the year to follow up again. However, as the first contact was June, I will not give them too long!!

Thanks again for all the help,

Kind regards
Kirsty