AXA Final Salary Pension Scheme- enhanced transfer value offer to leave the scheme

stuckupaladder

Would anyone have any advise about this offer, my Wife has been in this scheme for at least 20 years though left the company she took the pension out with some 18 years ago and has not made any contributions since. Her fund in the scheme is worth nearly 19k though where that amount accrued from we have no idea! AXA have offered an additional £1700 pounds to my Wife if she transfers out of the scheme and the option to take £450 as a lump sum now.
I can only assume that with incentives like this they are keen for people to transfer away from the scheme and so I feel the best decision is to remain in the scheme. AXA are also offering to pay for my wife to have independant advise from a company of their choice, but again I am wary of a conflict of interest. Any advise would be very much appreciated.

jem16

stuckupaladder wrote: »

I can only assume that with incentives like this they are keen for people to transfer away from the scheme and so I feel the best decision is to remain in the scheme.

More than likely to be the correct decision. 9/10 times it is wrong to transfer a final salary pension.

AXA are also offering to pay for my wife to have independant advise from a company of their choice, but again I am wary of a conflict of interest. Any advise would be very much appreciated.

Do you have figures for the final salary pension - what is it likely to be worth at retirement?

What age is your wife and at what age can she take the FS pension?

stuckupaladder

Thanks for that Jem16 - my Wife is 49 and she can take the pension at 60. AXA have given a predicted pension benefit of £996 a year on retirement. At present it stands at £555 a year. These figures are not very much but as I said my Wife only contributed to the scheme for a short while and to be honest forgot that she had it and has no idea where the accrued figures for the total fund of over 18k has come from. But now we do know about it obviously we want to keep it where its best likely to perform.

jem16

stuckupaladder wrote: »

Thanks for that Jem16 - my Wife is 49 and she can take the pension at 60. AXA have given a predicted pension benefit of £996 a year on retirement. At present it stands at £555 a year.

£17k would give an index linked pension of around £510pa so deosn't sound a great idea to move.

savageHK

I agree with Jem.

ffacoffipawb

stuckupaladder wrote: »

Would anyone have any advise about this offer, my Wife has been in this scheme for at least 20 years though left the company she took the pension out with some 18 years ago and has not made any contributions since. Her fund in the scheme is worth nearly 19k though where that amount accrued from we have no idea! AXA have offered an additional £1700 pounds to my Wife if she transfers out of the scheme and the option to take £450 as a lump sum now.

stuckupaladder wrote: »

Thanks for that Jem16 - my Wife is 49 and she can take the pension at 60. AXA have given a predicted pension benefit of £996 a year on retirement. At present it stands at £555 a year. These figures are not very much but as I said my Wife only contributed to the scheme for a short while and to be honest forgot that she had it and has no idea where the accrued figures for the total fund of over 18k has come from. But now we do know about it obviously we want to keep it where its best likely to perform.

A pension of £996pa seems very low for 20 years in a final salary scheme. That's £50 per year of service. On a 1/60th accrual it would mean her salary was £3,000 per annum. Are your figures correct?

Maybe it is a money purchase / defined contribution scheme?

jem16

ffacoffipawb wrote: »

A pension of £996pa seems very low for 20 years in a final salary scheme. That's £50 per year of service. On a 1/60th accrual it would mean her salary was £3,000 per annum. Are your figures correct?

I was assuming that the OP meant that his wife has been a member of the scheme for 20 years, 18 of which have been as a deferred member as she left the company 18 years ago.

stuckupaladder wrote: »

These figures are not very much but as I said my Wife only contributed to the scheme for a short while

ffacoffipawb

jem16 wrote: »

I was assuming that the OP meant that his wife has been a member of the scheme for 20 years, 18 of which have been as a deferred member as she left the company 18 years ago.

THat's not how I read it. It's still not too clear is it.

Maybe the OP could [STRIKE]elucd[/STRIKE] [STRIKE]elud[/STRIKE] [STRIKE]eluci[/STRIKE] explain more clearly.

jem16

ffacoffipawb wrote: »

THat's not how I read it. It's still not too clear is it.

No it's not totally clear I agree.

Maybe the OP could [STRIKE]elucd[/STRIKE] [STRIKE]elud[/STRIKE] [STRIKE]eluci[/STRIKE] explain more clearly.

Perhaps a good idea to clarify the number of years service.

ffacoffipawb

jem16 wrote: »

No it's not totally clear I agree.

Perhaps a good idea to clarify the number of years service.

My thoughts are that if it is a defined benefit scheme (benefit based on some definition of salary) then do not move it under any circumstances. Any offer made is to save the sponsoring employer money, not to give the intended recipient of the benefit (the OP or his wife) a financial advantage. The offer will not be generous, otherwise the employer won't be saving anything!

stuckupaladder

Thanks guys - to clarify my Wife only paid into the policy for two years in the early 90's, since then she has made no further payments to it and as I say we'd forgotten all about it and have no idea how the fund value of 19k has accrued, she simply had a small amount taken from her salary each month which would have only added up to a few hundred pounds in total at most!