local Authority DB frozen in 1996

nicknack321

Hi all
I have obtained a transfer value from an old Local authority DB pension. I left the Local authority in 1996. I have just discovered the fact that you need IFA to get a SIPPs from a DB scheme with the little problem that they will milk as much out of you as they can. Does the fact that in my case the pension, although subject to annual growth is frozen to my leaving salary in 1996 make a difference to the desirability of transferring out or not
Thanks

dunstonh

I have just discovered the fact that you need IFA to get a SIPPs from a DB scheme with the little problem that they will milk as much out of you as they can.

Actually, your bigger problem is finding the advice is to recommend transfer given that statistically, the most likely recommendation is that you should leave it where it is.

Does the fact that in my case the pension, although subject to annual growth is frozen to my leaving salary in 1996 make a difference to the desirability of transferring out or not

What makes you think it is frozen and not deferred?

nicknack321

Yes its deferred benefit. Do you think its a good pension? Surely it would make sense to move it, get the tax free amount to knock down the mortgage and put the rest into a new scheme where I can make further contributions...?

dunstonh

Do you think its a good pension?

It very much is.

Surely it would make sense to move it

On what basis? The odds are against it. So, what have you found out that makes you think it is better?

get the tax free amount to knock down the mortgage and put the rest into a new scheme where I can make further contributions...?

In your calculations, which works out the best?

nicknack321

Well if I'm paying £360 month on a mortgage surely it would be better to pay £432 into a pension that already had a substantial amount invested in it. Also Im not sure what the death payout is from the deferred scheme. If it was in a SIPPs and I croak before 75 my family get it

PeacefulWaters

nicknack321 wrote: »

Well if I'm paying £360 month on a mortgage surely it would be better to pay £432 into a pension that already had a substantial amount invested in it. Also Im not sure what the death payout is from the deferred scheme. If it was in a SIPPs and I croak before 75 my family get it

I think you'd be far better off establishing the value of your existing scheme, including dependants benefits if you die first.

I don't mean the cash value. I mean the monthly amount of any pension. The age it commences. The protections against inflation. Spousal benefits.

There's nothing to stop you contributing independently to an alternative pension while leaving this one untouched. What does your current employer offer?

nicknack321

Regardless of what other people think isn't the pot mine to manage as I see fit

xylophone

Also Im not sure what the death payout is from the deferred scheme.

Perhaps you should check and remedy this woeful state of ignorance?;)

http://www.lgps.org.uk/lge/core/page.do?pageId=101760

If the value of your deferred (not frozen) pension is in excess of £30,000, you will need to take the advice of an IFA qualified in pension transfers and there is no guarantee that he would advise a transfer.

http://www.wragge-law.com/insights/pension-reforms-are-you-ready-part-2/

dunstonh

Regardless of what other people think isn't the pot mine to manage as I see fit

There is no pot. You bought a range of defined benefits. You now wish to give up those benefits to convert it into a pot. However, what you propose is statistically unlikely to be financially beneficial to you. So, there are safeguards in place to stop you making a very bad move which cannot be reversed later on.

PeacefulWaters

nicknack321 wrote: »

Regardless of what other people think isn't the pot mine to manage as I see fit

No. It isn't.

Did you mean to say "thanks for your comments, I'm just investigating my options"?

nicknack321

Sorry if I gave the wrong impression, when I said "what other people think" I wasn't having a go at people who have helpfully given their opinions.


With regard to the expression "pension pot" then clearly this term is in current use and does have a transfer value.


Also I cannot see why this local authority pension is seen as so sacrosanct with regard to investment returns. I am starting to wonder if there is a political perspective linked to the resistance to capital moving out of these funds