Police pension can i cash it in

llTAYLORll

Thanks for answering my question.
To answer yours, in order to obtain an informed opinion or deduction i use what i know (on this occasion, little in terms of financial products) seek to fill the gaps in what i know (say, by speaking to a financial advisor on a forum about financial products) and come to a conclusion on the available facts. In this example that is 1) that my pension is effectivley to be frozen until retirement age and 2) there are trolls even on forums like this.
Your advice is greatly appreciated, your attitude not so.

jem16

llTAYLORll wrote: »

in order to obtain an informed opinion or deduction i use what i know (on this occasion, little in terms of financial products)

That part is true.

seek to fill the gaps in what i know (say, by speaking to a financial advisor on a forum about financial products) and come to a conclusion on the available facts.

You don't appear to have read the facts on this thread though.

1) that my pension is effectivley to be frozen until retirement age

It's not frozen. Iy you were a deferred member ( ie stupidly leave the pension scheme) it would increase in line with inflation.

If you continue to be a member, it will still increase in line with your final salary as no changes are being made to accrued benefits.

2) there are trolls even on forums like this.
Your advice is greatly appreciated, your attitude not so.

It is your attitude that needs to be looked at. Instead of coming on here to learn more about your pension scheme, you come on here and immediately shout "missale". Why not ask proper questions and try to learn?

People here are trying to help and stop others making what will really be the worst financial deicison of their life. Instead of reading the replies, it seems that you and the OP ( assuming you are 2 different people) are jumping to conclusions.

ffacoffipawb

Liverpool1981c wrote: »

What pensions schemes can i transfer this to?

dunstonh wrote: »

Other pension schemes that will accept transfers. However, all will require an IFA to sign off on the transaction and I doubt you will find an IFA willing to sign off on it. That sign off is designed to stop people doing stupid things and transferring it would be stupid.

Proxy wrote: »

Why aren't you reading the responses?

Given the OP's user name I suspect that he works for Merseyside Police. Speaking as someone that has had the misfortune of having past dealings with them, on the right side of the law, I am not surprised by this, frankly.

CannySaver_2

llTAYLORll wrote: »

1) that my pension is effectivley to be frozen until retirement age and 2) there are trolls even on forums like this.
Your advice is greatly appreciated, your attitude not so.

Your pension isn't frozen until retirement, it will increase both pre retirement and post retirement in line with a given index or your salary.

Secondly dunstonh is probably the most helpful and inciteful chap on here (assuming he is a chap!).

You will not improve on the police pension, either in its current form or indeed after the changes are made.

ffacoffipawb

dunstonh wrote: »

Do you use the same deductions when investigating crimes. i.e. ignore facts and just make things up to suit your opinion?

Investigating crimes? LOL! It's Merseyside Police we are probably talking about here. The chocolate teapot police force.

ROFLMAO!

hugheskevi

If you were a deferred member ( ie stupidly leave the pension scheme)

As a result of rules about how final pensionable salary is calculated, the pay freeze, higher contribution rates and alternative defined-contribution schemes, it can be optimal to leave schemes where higher-earning individuals do not intend to remain with their employer for much longer (about 5 years or so) and do not anticipate promotion.

As an example, the Premium scheme in the Civil Service calculates final salary as the best of a number of calculations, one of which includes the best of the last 4 years salary, adjusted for inflation, and it also offers what is at first glance a quite significantly inferior DC scheme (Partnership) as an alternative.

Given a pay freeze (or very close to it) between about 2009 and 2013, the inflation adjusted pensionable salary for 2009 or 2010 is now significantly higher than actual salary for many members. That 'best' year will drop out in a year or two once it reaches the back of the 4-year look-back, meaning the final salary for pension purposes will start to fall, and it will take a long time (unless promoted) for member's salaries to catch-up with the 2009 inflation-adjusted and in future CPI linked pensionable salary [approximately 10 years from my calculations, assuming salary is increased by 1% in the next 2 years, linked to CPI to 2015 and then to average earnings].

Assuming future investment returns of 5% p/a, it is optimal to leave the DB scheme and go into the DC scheme contributing 3% to get full employer match for higher earning members (they pay higher contributions in the DB scheme, but the DC scheme doesn't have higher contribution rates) expecting to leave within about 5 years (ie don't have time in which salaries will increase back above inflation-adjusted levels) and with no prospect of promotion (again, won't revalue pension above inflation-adjusted level). That locks-in the higher pensionable salary, which then increases by CPI.

The combination of the higher pensionable salary, lower contributions and DC benefits outweigh the DB benefits, even in a 1/60ths scheme with NPA of 60.

I'd emphasize that leaving the scheme is only going to be right only in very certain circumstances, and most people will not be able to do the calculations that would determine the result for themselves - so for the vast majority of people, leaving the scheme would not be the right thing to do as it is something that should only be considered after an awful lot of consideration, as a wrong move will be very costly. Just thought it was an interesting result arising from a combination of different circumstances that was very counter-intuitive.

jem16

hugheskevi wrote: »

As a result of rules about how final pensionable salary is calculated, the pay freeze, higher contribution rates and alternative defined-contribution schemes, it can be optimal to leave schemes where higher-earning individuals do not intend to remain with their employer for much longer (about 5 years or so) and do not anticipate promotion.

As an example, the Premium scheme in the Civil Service calculates final salary as the best of a number of calculations, one of which includes the best of the last 4 years salary, adjusted for inflation, and it also offers what is at first glance a quite significantly inferior DC scheme (Partnership) as an alternative.

I agree to a certain extent.

My Teachers' Pension is at that stage where my final salary is not better than the average of the best 3 years over the last 10. If I were to retire this year, my pensionable salary is higher than my final salary by about £3,000.

However, as with the Police Pension, I have no option to leave the final salary scheme and join a DC scheme with employer matching like the CS scheme. For most Public Sector pensions this does not exist.

xylophone

Secondly dunstonh is probably the most helpful and inciteful chap on here (assuming he is a chap!).

Rather hoping that this is "insightful".....

http://dictionary.reference.com/browse/incite

Stan_Here

Your employer will also have contributed a lot of money as well, and IF you were allowed to cash it in, which you are not, you would not get their contributions - why should you? Also, you will have received tax relief on your contributions so the money that you would get back would be traeted as income and you would pay 40% tax on it IF you could get it back, which you cant.

Generally, if you leave a job like this, the pension is frozen and then index linked until you retire, and this is on the current terms. If you stay in the job you may join the new pension scheme, which you do not like, but this would usually be started from scratch and the existing pension frozen on current terms.

If you move into the private sector, most pensions are now based on insurance company provided schemes through investments made over many years, and then you but an annuity (pension) with your cash pot when you retire. Insurance companies make profit and guess where that comes from - your pension. Your private pension will NOT be worth the same as your frozen police pension so do not move it. If investments are really bad in the years around your retirement then your pension will be bad, whereas it is likely your police pension is final salary based, or certainly on better terms that a private pension, and no insurance company profit taken every year.

jamesd

llTAYLORll wrote: »

then with it not performing as i was told (even promised) that it would then it is a mis sold financial product. Isnt it?

Your original deal was to pay out for a certain number of years. If you want a reduced life expectancy you could perhaps have your original deal if you can find some way to transfer extra years of life to someone else. You could then seek to sell the extra years of life in exchange for a top-up income payment.

This does however lead to one situation in which is is possible to transfer. If your life expectancy is greatly reduced but not less than one year you may be able to justify a transfer to a "scheme pension" that may pay out more at an earlier age than the new arrangement, based on your greatly reduced life expectancy. Such situations are uncommon but not impossible.