Pension Transfer value

w00519772

I am thinking about consolidating my pensions into 1. They all talk about a "transfer value". SHPS says that I am entitled to one transfer value per year.

What is a transfer value? I assume it is a value at a point in time.

Sat I asked for a transfer value on 09/08/2015 and the transfer took place on 09/09/2015. Say the value of my plan changed between now and then. Would the "transfer value" be adjusted.

What is the point of a transfer value? All of my pension plan values vary on a day to day.

atush

If you transfer you will be 'out of the market' for a number of days/weeks if you have a DC pension.

No it will not be adjusted if you do Better or Worse than your initial value projected. If you made money doing it, would you be happy to hand that over? Thinking not?

How to ameliorate the risk would be to move the pension you are transferring into Cash on a particular day then just transfer the cash pot when it happens?

w00519772

atush wrote: »

If you transfer you will be 'out of the market' for a number of days/weeks if you have a DC pension.

No it will not be adjusted if you do Better or Worse than your initial value projected. If you made money doing it, would you be happy to hand that over? Thinking not?

How to ameliorate the risk would be to move the pension you are transferring into Cash on a particular day then just transfer the cash pot when it happens?

I see. So the capital is converted to cash when the transfer value is generated?

Daniel54

w00519772 wrote: »

I see. So the capital is converted to cash when the transfer value is generated?

It sounds as if you are in the final salary/CARE scheme,if you are only given a transfer value once a year.

http://www.thepensionstrust.org.uk/TPT/SHPS/AboutSHPS/About+the+Scheme.htm

In which case you do not have a pot of money,but the benefit of a valuable guaranteed pension income.It is highly likely that it would be a poor decision to transfer out such a pension,and you would need a suitably qualified IFA t recommend that you do so.

A better starting point might be to share with the board some details of your scheme and the expected pension you will receive in retirement

atush

w00519772 wrote: »

I see. So the capital is converted to cash when the transfer value is generated?

Not unless you ask it to be.

Bu if you dont have a DC pension, this question is moot?

xylophone

You speak of pension plans and then of SHPS.

Do you have one DB Scheme and several other DC plans?

agarnett

atush wrote: »

If you transfer you will be 'out of the market' for a number of days/weeks if you have a DC pension.

No it will not be adjusted if you do Better or Worse than your initial value projected. If you made money doing it, would you be happy to hand that over? Thinking not?

How to ameliorate the risk would be to move the pension you are transferring into Cash on a particular day then just transfer the cash pot when it happens?

I think this response is almost as confusing as the OP's original question!

Firstly, like xylophone, I get the impression that the OP is largely talking about what he/she's been told by the administrators of a final salary/Defined Benefit (DB) scheme when he/she has enquired about a quote for a Cash Equivalent Transfer Value - generally you only get one free one a year - you might have to pay £250 or so admin fee for a second one within a year.

In the case of a DB scheme CETV, it is usually a quote valid 3 months and if you go for it, then firstly it has to go into another suitable pension scheme e.g. a SIPP. Then depending on how much of it you attempt to draw down and when, there may be tax deducted.

As for "DC" schemes, I think it may depend on whether the scheme is active or paid up and what sort of investment is behind each one. There are a hell of a lot of variables.

For example, I got a transfer value for a With Profits pension, but when I questioned how the final bonus had been calculated, I was told that an extra final bonus not calculable at the time of the original quote would be added - turns out an extra 10%! So the suggestion that quotes for cash transfers are set in stone in the short term is not right in that example.

I think it very much depends on each and every pension product you own and what the rules are for that particular fragment of your pension.

Atush may be right for some DC schemes, but I know atush is wrong for three of mine because they are WP policies and until the day they are actually surrendered, all that is mine for the taking is mine so to speak!

As Daniel54 says, the SHPS one probably needs particularly careful thought and probably mandatory IFA advice before any transfer is considered.

The others shouldn't be thought of as worth the first number they tell you either!

hyubh

w00519772 wrote: »

I am thinking about consolidating my pensions into 1. They all talk about a "transfer value". SHPS says that I am entitled to one transfer value per year.

SHPS (Social Housing Pension Scheme) has final salary, CARE and DC sections - which one is yours? (Assuming you only have benefits in one - might be more than one.)

What is a transfer value?

A 'cash equivalent transfer value' for DB benefits is just that - an 'equivalent' amount of money to put into another pension scheme were you to decide to give up the defined benefits in the final salary/CARE scheme. Typically a transfer quote will have a one month validity before proceeding would involve recalculating the money due.