Transferring pension

cepheus

Has anyone ever transferred a pension from a frozen (x occupational) final salary scheme to a private (SIPP) pension. What sort of questions should I ask about the transfer. Presumably the trustees will make it clear what the current value and transfer charges are.

I will probably get IFA advice on this but like to know the figures to start with.

dunstonh

Has anyone ever transferred a pension from a frozen (x occupational) final salary scheme to a private (SIPP) pension.

Some have but nowadays most providers will not accept a transfer without an IFA signing off on it first.

sort of questions should I ask about the transfer.

None. You need access to transfer analysis software and if you dont know what questions to ask then you shouldnt be doing the analysis. That sounds a bit blunt but there is a lot to take in here and its not for the novice. This is why the FSA treat it as a high risk transaction.

MikeJones_2

Hi cepheus,

I agree with dunstonh's comments. There are around 160 questions which need answers to for exactly the situation you describe.

Defined benefit schemes are complex and varied and unless you're fully conversant with what to ask the scheme administrators you're unlikely to make any meaningful headway.

It's a very specialised area, and even IFAs with good pensions knowledge frequently tell me that they've not even considered asking some of the questions contained on our forms.

Here's an example of what you need to identify, just to serve as a demonstration of what's involved with a transfer analysis:

- Scheme Details Basic Generic Information
- Retirement Age & Equalisation Issues
- Contracting-out Status, Dates and Type
- Scheme Continuity & Liquidity
- Cash Lump Sum, Basis, Calculation and Revaluation
- Transfer Value Calculation Basis
- Revaluation – Increases before Payment
- Escalation – Increases during Payment
- Early Payment
- Death Benefits Before Payment / Retirement
- Death Benefits During Payment / Retirement
- Additional Death Benefits
- Ill-Health / Disability for Preserved Members
- Miscellaneous

I'd recommend against you obtaining a transfer value yourself before you engage the help of an IFA because you 'set the clock ticking'.

If you do request a transfer value, once you receive your transfer value statement you have 3-months from the Calculation Date within which to complete the paperwork and return it to the scheme trustees (or their administrators) if you decide to transfer. Submitting a request within this Guarantee Period ensures that you will receive the transfer value quoted.

A transfer value statement usually only provides relatively basic information and few scheme's provide anywhere near the answers to the questions that you ought to pose about your pension benefits.

Getting these extra answers is time-consuming. Only when you have enough information to hand can you then proceed to undertake a Transfer Value Analysis Service (TVAS), and for that you'll almost certainly require the help of an IFA.

Usual time to do the data gathering, checking, report writing, reasons why etc. will easily take about 10 hours and sometimes up to 20.

This explanation isn't posted to put you off a pension analysis as I'd recommend everyone in a defined benefit scheme to undertake one at regular intervals - it acts as a prudent and sensible way to check your pension benefits are okay. I posted this simply to endorse what dunstonh has said, and that is to show the level of complexity involved in what you are seeking to attempt to do yourself.

All the best.

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a 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.