Blocked from Transferring DB Pension to DC… Opinions Sought

jem16

milford59 wrote: »

Watch my lips "I neither want, nor need an annuity" - so don't compare the one I want to sell with another one that I DON'T want to buy...

That's fine as a Defined Benefit pension isn't an annuity. What it is is a defined set of benefits that's worth far more than any annuity.

dunstonh

milford59 wrote: »

The method that the FCA insist on for calculating the Critical Yield will NEVER produce a result that an IFA will be happy with. How can it ?? The FCA are comparing you SELLING your DB annuity back to your existing DB provider and then BUYING one from someone else (at a future date)

There is a massive Bid-Offer spread.

The FCA methodology is flawed and until it changes, we DB people are going to struggle to get a transfer done. Watch my lips "I neither want, nor need an annuity" - so don't compare the one I want to sell with another one that I DON'T want to buy...

Whilst annuity rates have an impact, it should be noted that the annuity rate is actually higher, in most cases, than what you would take as a sensible amount under drawdown. Unless you plan to erode your pot, in which case, the annuity rate is a good guide to use.

So, whether you do drawdown or annuity, it doesnt really matter. The rates used reflect both methods. There are no bid/offer spreads but should include all charges.

However, none of this is applicable to the OP as its a scheme pension that would be in place and not an annuity.

Peelerfart

Having recently reached 55 I too shared the OP's desire to finish at 55 and had done for many years.

Now I've finally got there all of a sudden the urge to leave has gone and I'm quite happily bumbling along knowing now that redundancies etc do not concern me,in fact quite the opposite.

Just hold on OP don't do anything,you're in a great situation pension wise - stay there.

sandsy

milford59 wrote: »

The method that the FCA insist on for calculating the Critical Yield will NEVER produce a result that an IFA will be happy with. How can it ?? The FCA are comparing you SELLING your DB annuity back to your existing DB provider and then BUYING one from someone else (at a future date)

There is a massive Bid-Offer spread.

The FCA methodology is flawed and until it changes, we DB people are going to struggle to get a transfer done. Watch my lips "I neither want, nor need an annuity" - so don't compare the one I want to sell with another one that I DON'T want to buy...

So how would you suggest it should be done?

Pickle29

Quote:
. Also the DB company is in poor shape and I wouldn’t be surprised if it goes bust in the next few years (another reason to get the cash out now).

dunstonh wrote: »

No its not.



Hi
Just a quick question as to why you gave his answer? I have a deferred final salary pension in a pot which isn't doing particularly well - get annual statements telling me about the shortfall etc
I am 52 and paying into LGPS but wondered what would happen if my deferred one collapsed?
Thanks

kidmugsy

Dunstonh is probably referring to the Pension Protection Fund. Many people hereabouts seem to believe it offers jolly good protection for members of a FS scheme that goes bust. Maybe it does in general, but for my biggest FS pension the deal is lousy, because (i) I'd lose nearly all of my inflation protection, (i) my wife would lose much of her widow's pension, and (iii) she'd lose nearly all of her inflation protection too.

I urge you to look at how you'd fare under the PPF rather than accepting generalisations.

Pickle29

Thanks, I'd never heard of this - will make some enquiries
Cheers

atush

Pickle29 wrote: »

Quote:
. Also the DB company is in poor shape and I wouldn’t be surprised if it goes bust in the next few years (another reason to get the cash out now).

dunstonh wrote: »

No its not.



Hi
Just a quick question as to why you gave his answer? I have a deferred final salary pension in a pot which isn't doing particularly well - get annual statements telling me about the shortfall etc
I am 52 and paying into LGPS but wondered what would happen if my deferred one collapsed?
Thanks

You need to give more details like who you worked for, when etc? FS pensions dont have 'pots'?

We aren't mind readers?

SJD48

davide691 wrote: »

For what it’s worth, Youinvest told me they’d accept a DB transfer to a SIPP even if your IFA doesn’t recommend it. They just need to see you’ve taken IFA advice, and will get you to sign an additional disclaimer before you transfer

This is correct as I did exactly that.

All I had to do was give them details of my carefully thought out reasoning and sign the disclaimer.