Stay in Railway Pension or transfer to SIPP

atush

20-02-2014, 2:01 PM

And here is the Last post by Babar

Of course we cannot say he was involved in the scam, but I've got my ideas about it. After all, he knows so much abt these pensions, came and gave us a Glasgow kiss and departed forever.

dunstonh

I have a lot of information now and whilst I cannot post what that information is on a public forum, lets just say that you should not under any circumstances deal with this company and if you have then you should contact Action Fraud. http://www.actionfraud.police.uk/

DonM

For the overall posts...

Firstly, the original "offer" to transfer money out of a pension into a property development is v. high risk. At the least one would have to consider the potential market, location, check the planning permissions etc etc. That should only be something for a sophisticated investor to do.

The railway pension, I am assuming, is a final salary pension. Despite what is written transferring into a defined contribution scheme MAY be in a person's interest. To say transferring in 99% of cases is completely wrong is wide of the mark. In reality, the decision is based on an individual's circumstances but there can be numerous benefits to transfer. What is critical, however, is that anyone considering the change has a "matching yield analysis" done. This basically highlights whether the transfer MAY be in the pension holder's best interest or not.

I cannot over emphasise the word "may" highlighted above. A pension transfer is a very personalised decision especially with the proposed pension rule changes.

dunstonh

To say transferring in 99% of cases is completely wrong is wide of the mark.

No its not. The figures suggest that high level are better off staying put.

In reality, the decision is based on an individual's circumstances but there can be numerous benefits to transfer.

There are very few reasons to justify transferring out. There can be some but they are in a tiny minority.

Firstly, the original "offer" to transfer money out of a pension into a property development is v. high risk.

in this case, it is a lot more than that.

DonM

As mentioned, there may be reasons to transfer. The best option is to be fully aware of all the facts. Both the benefits of moving from a DB pension and the benefits of staying in the existing scheme. Once one has all the information they can make an informed decision.

Getting a matching yield analysis done prior to making the transfer is critical. Assuming the transfer value is sufficient and someone was tolerant of the risks associated with moving then why not?

dunstonh

Assuming the transfer value is sufficient and someone was tolerant of the risks associated with moving then why not?

Typically, the critical yields are way above what would be considered justifiable. Plus, the vast majority of people just don't have the risk tolerance and capacity for loss that moving out of a gold plated pension into an investment based one brings with it.

There will be exceptions of course. However, there is a reason why the FCA treat pension transfers as mis-sold unless proven otherwise.

The company being talked about on this thread do not do an analysis/comparison. They automatically present the existing option as bad. The person is not put in an informed position. They are lied to.

jem16

DonM wrote: »

As mentioned, there may be reasons to transfer. The best option is to be fully aware of all the facts. Both the benefits of moving from a DB pension and the benefits of staying in the existing scheme. Once one has all the information they can make an informed decision.

Yes of course there may be reasons and those reasons may well be valid. However the point being made here, and for very good reasons, is that for the majority they are best staying in their DB pension.

On a forum like this, most offers to transfer your DB pension to some wonderful investment opportunity usually involve some sort of scam.

Getting a matching yield analysis done prior to making the transfer is critical. Assuming the transfer value is sufficient and someone was tolerant of the risks associated with moving then why not?

That would be great provided the someone was prepared to accept the consequences of their actions, be it good or bad. Unfortunately in today's society of blaming anyone but themselves when they later realise they made the wrong decision, I don't blame any IFA for refusing to take it on.

DonM

Ok, fair points. I completely agree that...
a) if someone provides a "solution" prior to taking the time to understand your situation then run a mile.
b) if someone does not find out a transfer value prior to suggesting a pension transfer then run a mile.
c) if someone suggests investing all your money in one niche area then run a mile.
d) if something sounds too good to be true then thoroughly research/cross reference the information then feel free to run a mile if it doesn't seem right.

gadgetmind

DonM wrote: »

if someone suggests investing all your money in one niche area then run a mile.

I know I bang on about it, but an IFA (yes, he was, I checked) spent the whole hour of a first meeting trying to 1) Get me to sign a HNWI form, 2) Assure me that equities never made anyone any money, 3) Persuade me to move my entire SIPP into his mezzanine loans for property developers scheme.

I ran a mile, but he's still doing it and it's entirely legit. High risk, maybe, but not a rip-off scheme as are many.

dunstonh

gadgetmind wrote: »

I know I bang on about it, but an IFA (yes, he was, I checked) spent the whole hour of a first meeting trying to 1) Get me to sign a HNWI form, 2) Assure me that equities never made anyone any money, 3) Persuade me to move my entire SIPP into his mezzanine loans for property developers scheme.

I ran a mile, but he's still doing it and it's entirely legit. High risk, maybe, but not a rip-off scheme as are many.

Some seem to think that you have to complicate things to make yourself look better than the rest. However, I swear that these dealing in unregulated schemes are more likely to be dodgy than naive. It is a shame that they tarnish the image for the vast majority.