Transfer final salary pension to private pension

jem16

milesmalpractice wrote: »

She only receives a very small National Health Pension despite working as a Nurse and Health visitor for almost 40 years , as she was on a final salary scheme and worked part time for her final few years. Now of course she would be entitled to an average pay based pension.

Working part time for the final few years would not have changed her entitlement as the benefit is worked out on the full-time equivalent salary. All the part time years would have done was build up less years entitlement. This would be no different to a career average scheme.

She worked part time as she took up a post delivering vocational qualifications in a school. She does not receive a pension for this employment which lasted more than 8 years as the head did not give her a permanent contract ( despite it being a legal requirement to do so after 2 years continual employment.

Which pension scheme would she have joined - the Teachers' Pension Scheme or LGPS? As far as I'm aware neither needs a permanent contract but I may be wrong. The Teachers' Pension scheme only requires that you are employed full-time or part-time.

Finally, to add a bit more salt her state pension is limited as she was advised to pay the married woman's contribution.

Nothing that can be done there unfortunately.

hyubh

jem16 wrote: »

Which pension scheme would she have joined - the Teachers' Pension Scheme or LGPS? As far as I'm aware neither needs a permanent contract but I may be wrong.

The LGPS doesn't. For a time people on zero hour (i.e., casual) contracts with no mutuality of obligation were barred, but the government's auto-enrolment legislation put paid to that (the scheme rules were changed last autumn).

bigfreddiel

iwblue wrote: »

I've just read an interesting article in todays Sunday Times about the value, or not, of transferring a final salary pension to a private pension..........

the article explained it all - i thinkyou need to read it again - and then contact your pension scheme to find out the transfer value

then find out if you're unhealthy


then use a spreadsheet to do some what if scenarios - its quite simple

fj

my advice tho' don't do it!!!!!

atush

iwblue wrote: »

I've just read an interesting article in todays Sunday Times about the value, or not, of transferring a final salary pension to a private pension provider on retirement.

It lists some of the advantages and disadvantages and I wondered if anyone knew where I could get some indicative values if I decided to transfer my final salary pension pot when I come to retire?

many thanks.

I am halfway THRU the ST and don't see that article yet.

In any case, unless you are of poor health and have no dependents, there would be no reason to do this and in almost all cases would be a stupid idea.

kidmugsy

atush wrote: »

I am halfway THRU the ST and don't see that article yet.

In any case, unless you are of poor health and have no dependents, there would be no reason to do this and in almost all cases would be a stupid idea.

It occurs to me that there ought to be a market for this kind of thing, where the reluctant FS pensioner passes his pension to an investor and uses the money the investor will have paid him to spend on Maseratis or whatever.

Stargazer57

kidmugsy wrote: »

It occurs to me that there ought to be a market for this kind of thing, where the reluctant FS pensioner passes his pension to an investor and uses the money the investor will have paid him to spend on Maseratis or whatever.

If such a market developed, and those taking transfers close to retirement tended to be those with poor life expectancy, or without dependants, you would expect the providers to respond by taking such factors into account in determining the amount to be paid as a transfer. These are defined benefit schemes after all!

sleepless_saver

milesmalpractice wrote: »

Finally, to add a bit more salt her state pension is limited as she was advised to pay the married woman's contribution.

The rampant unfairness of this situation appalled me. Is there anything she can do?

She should check she is getting any benefits she is entitled to - benefit checker here http://www.turn2us.org.uk/benefits_search.aspx. Or ask CAB or AgeUK to check for her.

iwblue

Well, I was posing a question based on an article I read, and I'd thank some people to keep opinions such as "stupid" and "the answers in the article" to themselves if they have no actual FACTS to add to the discussion, which they clearly haven't based on the responses they've provided.

atush

Transferring an index linked income for life, that provides a spouse/dependants pension to something that would not provde same would be, in fact, a stupid thing to do. As you would be taking money and trying to invest it to meet or exceed that income, and I don't see it as possible. Nor would the IFA asked to sign off on it. I am sorry you don't like the word stupid, but you can swap it with unwise in the extreme if that makes you happier. From the above mentioned article:

While these features may be attractive to some retirees, they could prove highly costly over the long term for the majority of pensioners.

The transfer value will not be sufficient to replicate the guarantees provided by an employer’s scheme.

UNLESS you are of ill health with no dependents, in which case you could be better off and would possibly get an IFA to sign off.

In any case, the above article is not really about transferring from a FS pension in general, but the companies offereing inflated terms to try to get employee's to give up that index linking. And they do this because it is in THEIR interests, not their employee's interests. The only mention of transferring an entire FS pension (rather than agreeing to no index linking), was under the ill health/no dependents case.

iwblue

I'm not going to enter into a side discussion, other than to say some people need to think before offering their unsubstantiated opinion, or better still say nothing.......This is a place to discuss financial issues and not pass off personal feelings.......as the forums say, no question is a stupid question.