Pension Option on Redundancy

OldBeanz

Only one way to find out but looks more hopeful than before.

philng

Now received transfer value which states £51489 and no mention of compulsoty requirement to take financial advice (though recommended).
So why is the transfer value £51k when the original fund value was £37k just 2 weeks ago-Is it something to do with the pension containing a defined benefit under pin?
Transfer forms also state Reference Scheme Test Pension £1458.

xylophone

the pension containing a defined benefit under pin?

Then see post 7 above?

And see http://www.mycompanypension.co.uk/What-is-a-Money-Purchase-Scheme-with-a-Defined-Benefit-Underpin-Active-Members-DB

"This Factsheet takes a detailed look at a variation of money purchase schemes – which provide some measure of ‘promise’ to the emerging pension. Because of this ‘promise’, these schemes are regulated as defined benefit schemes."

You'll need to check out the advice requirement?

philng

Now received revised figures on the above:

Transfer Value of DC Scheme with Under Pin £59650
Reference Scheme Test Pension £1533

Does this mean the £59650 would only provide an income of £1533?

Hence if so it makes sense to transfer to a drawdown scheme and drawdown in stages between age 57 and 65 before other DB & OAP pension commences.

xylophone

Transfer Value of DC Scheme with Under Pin £59650
Reference Scheme Test Pension £1533

Does this mean the £59650 would only provide an income of £1533?

Your wife should check this with the administrator but to me this reads like the successor to GMP - the scheme must provide an annual pension at least equal to £1533 per annum.

This will be a "safeguarded benefit" so that advice will be required before transfer?

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

jamesd

The income is about 2.57% of the pension pot value. That is quite close to the value of an inflation linked open market annuity for a person in normal good health at her age. It's a bit over half of what she'd get for the same amount of money by deferring her state pension and drawing on that pot for income while deferring. Of course state pension age is quite a way away so she couldn't actually do that yet.

Of the £59,650 she can take 25% as a tax free lump sum with no advice at all being required, that's exempt from the legal requirement. The remaining £44,737 is above the £30,000 threshold for legally required advice so if it is all a pot with safeguarded benefit pot she'd be required to take advice before she could transfer to do something like getting the much higher state pension income.

Under pin might mean that there is some increase in the transfer value due to the GMP payment requirement that it has.

I assume that an IFA would not have great difficulty in recommending that she transfers it so she can use income drawdown before other pension and state pension ages. That's her real need, not the lifelong income that a normal pension annuity or state pension deferral would provide.