Pension being wound up by PIC

agarnett

If you really feel you must take the drawdown route, have you actually tried speaking with a DB pension transfer specialist at HL who can give you the necessary advice?

They may still have the ability to give you the advice but simultaneously retain the ability to accept your instructions contrary to the advice they give! Don't ask me how that works - but I believe it may still be the case!

If I am right, there will still be a fee for the advice of course, but to HL or their associates, and I fear there may now not be enough time to complete what you are minded to do before 6th April.

Sounds kind of awful to many, I know, but this whole pension rule changes thing is completely mismanaged moving feast catching everyone but insiders on the hop, and I believe doors are probably closing rapidly for the kind of thing you wanted to do.

bmm78

simpywimpy wrote: »

Just checked the link from above and it states the following
Advising on investments (except on Pension Transfers and Pension Opt Outs)

Does this mean he is not suitable?

I did explain in my initial emails with him exactly what the pension was and what we wanted to do ie transfer it
Have sent a text message asking him the above.

The relevant Pension Transfer permissions are "advising on pension transfers and pension opt-outs".

Strictly speaking, if the purpose of the transfer is to crystallise benefits (eg move into drawdown), pension transfer permissions are not required. That said, the FCA have announced this week that they intend to amend their rules so that pension transfers require specialist permissions, regardless of whether or not it is to take benefits. This change is likely to come in around June this year.

It will therefore be possible for an adviser without pension transfer permissions to sign the case off. However, if you do go down this route I would ask questions about the adviser's qualifications, knowledge and experience in this area. With a Pensions Transfer specialist you know that the adviser (or the individual signing the case off) holds advanced Pension qualifications. There is no such guarantee with a non-specialist.

bmm78

agarnett wrote: »

They may still have the ability to give you the advice but simultaneously retain the ability to accept your instructions contrary to the advice they give! Don't ask me how that works - but I believe it may still be the case!

This is known as "Insistent Client" business. Some firms will allow you to do this, but others will only act on a positive recommendation. The more risk-averse firms don't touch it with a bargepole.

If this is an avenue that the OP wants to explore, it's still important to consider why the adviser is advising you not to take that action.

xylophone

Some googling turned up

http://www.employeebenefits.co.uk/home/sr-technics-uk-completes-pension-buy-out/101152.article

http://www.lse.co.uk/FinanceNews.asp?code=03twlpwr&headline=Pension_Insurance_Corp_takes_on_insolvent_UK_pension_scheme

which gives the background to the proposed transfer out.

agarnett

xylophone wrote: »

Some googling turned up ...
which gives the background to the proposed transfer out.

It certainly did.

It isn't pretty when taken with the OP's first hand experience.

Makes me wonder how many more schemes are already encouraged to underquote CETVs, whether they be on PPF's books or not ?

It is deliberate misselling in my book irrespective of whether members take the bird in the hand with advice or against advice. Meanwhile HMG is fawning concern when I believe it is HM Treasury who are deliberately looking the other way as transfers are both enabled and underquoted, and of course, currently unadvised.

Who are PIC anyway? "Back books" specialists that's what, eh? Like Friends Life and Aviva aspire to become leaders at, and then there's been Rothesay Life (Goldman Sachs) "de-risking" selected schemes for the past few years. Cuddly altruistic companies? Or worse than two-headed vultures?

"Large back-books may lead firms to act against their existing customers’ best interests" - so warned the FCA a year ago as one of their "seven areas of focus". So how then are these companies allowed to corner "back-books" business so easily?

“We hope by highlighting these
issues, in particular, the seven
areas of focus, to increase
the likelihood that firms will
be able to avoid them or to
minimize their impact and the
detriment they cause.”

Hmmm... can anyone take a guess at what the imagery on
this page really signifies? My own view is that shackle should not be unlocked into the unsafe position while the whole thing is under tension. Or maybe Rothesay think it is fair that it should be ... ?

simpywimpy

Before we realised the need for an IFA I had posted the forms off to open a capped drawdown with HL who then returned them saying we need an IFA report which they offered to do for £745 plus VAT

dunstonh

simpywimpy wrote: »

Before we realised the need for an IFA I had posted the forms off to open a capped drawdown with HL who then returned them saying we need an IFA report which they offered to do for £745 plus VAT

I would have taken their offer of £745 plus VAT. The VAT is interesting as advice is only VATable if there is no intention to purchase a financial product. (intention does not have to be carried through to remain with no VAT).

simpywimpy

well he's been and took all our details etc. Just need to sign a form to allow him to get the info from PIC. Can't help feeling Ive opened a can of worms as he was talking about annual visits etc. Fees mentioned were 3% but he was rather vague on that side of things . Wish Id seen dunstons advice now and gone with HL after all lol

agarnett

You don't have to act in quite so much haste.

If you haven't signed a form to give him authority then I don't see how you yet have much of a contract with this particular adviser.

Call HL in the morning and ask if you can get a call back from a pension transfer specialist urgently.

It is possible that they may be able to give you a price for advice and then if you have your beans in a row (your rationale for doing what you want to do) that you may be able to persuade them to give you the necessary "advice" over the phone rather than through a face to face meeting.

No need to feel you are commited to an adviser just because they came to talk to you and left you a form to sign.

If you really still feel after seeing a competitor, that you should have acted on dunstonh's ok of the HL advice quote, then that means the adviser who came today didn't quite impress you enough! So rather than succumb to pressure to sign and deliver that form, spend another day or two talking to HL and maybe someone else in the SIPP provider lists.

And don't just stop talking to PIC. You can perhaps explore with them what the £190K figure meant, and what the alternative to £140K cash transfer really is. It really does look that PIC are relying on significant numbers of members taking the cash transfer offer which undoubtedly is designed to let PIC off some more expensive hook.

Unless your mortgage is at some unusually high rate, there is no obvious merit in paying it off just to say you've done it! Debt can be good for you if you control it rather than the debt controlling you! If the interest rate is low, it may give you a great deal of time to develop your plans. If you keep the mortgage longer, it may also give flexibility to do something else with the PIC pension which preserves more of the original scheme benefits and therefore its value. It may also be more tax efficient in eventually getting the cash out more gradually.

In the old days an obvious alternative option offered alongside a cash equivalent value for you to transfer directly to a new personal pension would have been termed a "Section 32 buy out" policy - something which is an attempt to mirror and uphold the original scheme promises to you. A Section 32 policy, although with a new provider, would normally still be transferable as a cash sum later on before retirement.

In your case PIC seem to have offered some kind of deferred annuity of which may not be transferable at a later date before retirement. Or at least that seems to be what others have inferred. But is that really the case?

As long as you don't start taking the annuity benefits, I don't see why it shouldn't have a bigger cash transfer value of its own (bigger than the £140K and nearer the £190K).

I don't think there has been enough in this thread yet for you to decide to just ditch that so-called annuity option if it is on the table. On the face of it you may be throwing away fifty grand for the sake of someone thinking about what the PIC alternative deal really comprises. Usually they offer three options for this kind of thing, don't they? We have learned of two (£140K CETV or £7,000pa annuity). Is there a third?

Have PIC said much about option 2 other than the 5% = £7,000 per year after retirement? Is it referred to as a Section 32 buy out plan? I don't even know if Section 32 plans are still in vogue or indeed a possible option, but if they are, then that might be the option PIC would prefer you NOT to take, and the one which is most valuable to you.

I too am only a questioning customer of some of these types of schemes and plans myself - so take nothing I say as advice or even leaning in the right direction! I am just frustrated that UK pensions are deliberately over complicated such that even those of us with a bit of extra knowledge from our previous careers are struggling to make sense of it.

simpywimpy

HL state this :
As the letter explained you are not required to take advice from Hargreaves Lansdown, if you do seek advice elsewhere and wish to proceed with the transfer then your husband will need to send us a signed letter confirming he has received advice and provide the IFAs name and address.

Surely then once this IFA provides his views in a letter, I just need to send his details to HL and we can proceed regardless?