Mum can't get her full pension pot even though she hasn't taken anything

buckster

Hi, my mum has just been told off her employer Barclays that she can have a lump sum tax free payment from her pension and then a small yearly payment for life. I told her to ask what her pension fund value is but they say that there isn't a figure because it is not an average type of pension.

They say the reason for this is that the pension is called a 1964 ukrf pension and it ceased in 2010 so it does not come into the new regulations that kick in, in April because the pension was already finished 4 years ago. My mum has not taken any money from her pension yet so I thought that she may be able to take all of it (if she chose to and she understands the tax implications) because my Mum has very ill health and my dad does not have a private pension. I would hat the thought that my dad would struggle if my mum died in the next few years.

Does this sound correct or does anyone think that she should be allowed to choose. It sounds like Barclays have already handed the pension pots over to an annuity as soon as they closed the pension in 2010. Here is a link to the pension that may help any experts out there

http://reports.barclays.com/ar12/financialstatements/notes/employeebenefits/37pensionsandpost-retirementbenefits.html

shop-to-drop

Is there definitely a 'pension pot' has she been given a figure for the pot?

Not all pensions have a pot in which case she won't be able to draw it.

Linton

The pension is Defined Benefits (sometimes known as Final Salary). So there is no personal pension pot and the pension wouldnt come under the new rules anyway. She may be able to get a transfer value and then transfer the pension to a private pension which could be accessed under the new rules.

Normally transferring a DB pension is a bad idea since the Transfer Value tends to be significantly less than the cost of providing equivalent income. However in her case with life shortening ill health there may well be a case for a transfer.

Suggests she discusses her specific circumstances with Barclays pension people.

buckster

No, Barclays said there isn't a 'pot'

mgdavid

buckster wrote: »

No, Barclays said there isn't a 'pot'

Yes we know that, it is a Defined Benefit pension scheme which guarantees a pension for life based on the salary earned. But it does have a Transfer Value, this is what you ask for if you are considering transferring out. Alternatively get hold of a copy of the Scheme Rules and see if there are any provisions in it for serious ill-health situations.

atush

There isn't, she must ask for a Transfer Value. this is the amt it would be worth if it was transferred to a DC pension. Which is a pot.

How ill is she, and how long dies her doctor say she will live?

xylophone

Your mother has a defined benefits pension.

https://www.moneyadviceservice.org.uk/en/articles/transferring-out-of-a-defined-benefit-pension-scheme

https://www.unbiased.co.uk/pensions-transfer

If she wants to explore transferring it to a personal pension, it is likely that even under the current rules, any receiving scheme would require her to take the advice of an Independent Financial Adviser qualified in pension transfers and under the new rules

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/332673/2014-07-20_defined_benefit_transfers.pdf

"The government will require every pension scheme member who wishes to transfer
out of their defined benefit pension to take advice from a professional financial
adviser who is independent from the defined benefit scheme and authorised by the
Financial Conduct Authority (FCA).
The government will issue new guidance to trustees on how to use their existing
powers to delay transfers from schemes if the scheme is at risk, and to reduce
transfer values to reflect scheme funding level."

buckster

She has had a heart attack and has breathing problems so she will be finishing work due to ill health. I will tell her to ask about the transfer value thanks

dunstonh

buckster wrote: »

She has had a heart attack and has breathing problems so she will be finishing work due to ill health. I will tell her to ask about the transfer value thanks

And what does she plan to do with that transfer value once she has it?

lovinituk

Its a 'years of service' x 1/60th x final salary Pension.

How many years pensionable service does she have at Barclays?

xylophone

Is she taking her pension early on grounds of ill health?

What does her scheme booklet say about this?