transfer db to dc

Graham001

under the current rules is it possible to transfer a db pension to a dc pension, the reason i ask is that i have a deferred db pension that i am elligible for at 65 as well as my current pension (which is a closed scheme) that i am eligible for at 55. I would like to access the funds i have accrued in the db fund and self invest so i can consolidate my income, but the question is can it be done.
kind regards Graham

dunstonh

under the current rules is it possible to transfer a db pension to a dc pension

yes but it rarely happens.

I would like to access the funds i have accrued in the db fund and self invest so i can consolidate my income, but the question is can it be done.

Thankfully, rules exist to prevent people making silly mistakes such as what you propose. You would need an IFA to sign off on it. And with 95% of defined pension transfer enquiries being deemed bad advice, you shouldnt expect an IFA to agree with you.

kidmugsy

It's a pity that the govt didn't make it much easier for people to swap from db schemes to dc, at least for govt employees. It would save the taxpayers a fortune.

Truthseeker_2

Graham001 wrote: »

under the current rules is it possible to transfer a db pension to a dc pension, the reason i ask is that i have a deferred db pension that i am elligible for at 65 as well as my current pension (which is a closed scheme) that i am eligible for at 55. I would like to access the funds i have accrued in the db fund and self invest so i can consolidate my income, but the question is can it be done.
kind regards Graham

There is nothing to transfer, as the DB pension is an income, not a fund.

Truthseeker_2

kidmugsy wrote: »

It's a pity that the govt didn't make it much easier for people to swap from db schemes to dc, at least for govt employees. It would save the taxpayers a fortune.

No it's not - you can't have your cake and eat it. You are already in a very privileged position. If the government allowed this, it would create instant millionaires out of senior civil and local government workers, armed forces officers, doctors, senior police officers, etc. Would that be fair on the rest of us?

Graham001

Thanks for the reply, I would be grateful if you could elaborate on why you believe it would be a silly mistake, I was only exploring the possibility of investing the funds I have accrued in this pensionin a manner that i consider would give me a better return than i am currently predicted, But i grant you it would be a mistake to take risk with the funds from my main pension

Graham001

truthseeker wrote: »

no it's not - you can't have your cake and eat it. You are already in a very privileged position. If the government allowed this, it would create instant millionaires out of senior civil and local government workers, armed forces officers, doctors, senior police officers, etc. Would that be fair on the rest of us?

instead of fund managers and brokers!!!

kidmugsy

Truthseeker wrote: »

No it's not - you can't have your cake and eat it. You are already in a very privileged position. If the government allowed this, it would create instant millionaires out of senior civil and local government workers, armed forces officers, doctors, senior police officers, etc. Would that be fair on the rest of us?

You have missed the point. With the rules suitably written, you'd get chumps giving up their extravagant DB benefits just so that the could pocket less loot, but sooner. A win for the taxpayer, there.

Linton

Graham001 wrote: »

Thanks for the reply, I would be grateful if you could elaborate on why you believe it would be a silly mistake, I was only exploring the possibility of investing the funds I have accrued in this pensionin a manner that i consider would give me a better return than i am currently predicted, But i grant you it would be a mistake to take risk with the funds from my main pension

A DB pension doesnt have funds accrued by you, it just has a liability to pay you a pre-defined amount of money each year. So, if you wanted to transfer a DB pension to a DC one, the scheme would have to calculate the current cost of the liability based on average life expectancy etc that does not disadvantage ongoing scheme members.

Generally speaking the results of that calculation lead to a transfer value that is significantly less than that required for you to reasonably safely generate the same income.

However these considerations do show that if your life expectancy is very much less than the average it could be financially worthwhile to transfer to a DC scheme.

Graham001

Truthseeker wrote: »

There is nothing to transfer, as the DB pension is an income, not a fund.

I was always told this is a defined benefit scheme and the annual statement has a transfer value

Graham001

Graham001 wrote: »

I was always told this is a defined benefit scheme and the annual statement has a transfer value

also the annual statement shows the funds accounts! I could be totaly wrong but this seems like a fund