Defined benefit pension transfer red tape.

thejaminthecity

Has anyone managed to successfully transfer a defined benefit pension with a value over 30k to a SIPP using an FCA registered IFA.

Most pension companies whether source or target won't agree to transfers without favorable advice from an IFA and the actuary I used can't find an IFA willing to do the transfer because they are running scared of liability. If you can't transfer a pension with multiples of x37 and x47, how do any transfers happen? How is this process working in reality. The IFA companies even want to charge you 3 - 4 % of your pension and you don't even know if the transfer will go ahead, another financial ripoff. It is all about the IFA's liability, not the 7 or 8 good reasons I could spin off for wanting to make the transfers. Times like this you wish you had 15 small pensions of < 30k!! Even that arbitrary limit should be based on the annuity rate not the transfer value.

William

Dark_Sunday

I can't answer your question bit I'm waiting on a transfer value from a DB pension scheme & hope it's gonna be <£30k so I can transfer, for a variety of reasons. I understand why there are safeguards in place to protect people from being ripped-off, but the current legislation for transferring DB pensions is most definitley not ideal for those wishing to transfer.

HappyHarry

thejaminthecity wrote: »

Has anyone managed to successfully transfer a defined benefit pension with a value over 30k to a SIPP using an FCA registered IFA.

Most pension companies whether source or target won't agree to transfers without favorable advice from an IFA and the actuary I used can't find an IFA willing to do the transfer because they are running scared of liability. If you can't transfer a pension with multiples of x37 and x47, how do any transfers happen? How is this process working in reality. The IFA companies even want to charge you 3 - 4 % of your pension and you don't even know if the transfer will go ahead, another financial ripoff. It is all about the IFA's liability, not the 7 or 8 good reasons I could spin off for wanting to make the transfers. Times like this you wish you had 15 small pensions of < 30k!! Even that arbitrary limit should be based on the annuity rate not the transfer value.

William

Yes, a number of my clients have done so successfully.

All my clients have also understood that I want to be paid for my time and recommendations.

As an IFA, I would always listen to the reasons a client had for wanting to transfer. Often, a client will provide very good reasons, which can help to reduce the risk of advising to transfer.

The liability to an IFA can not be underestimated. The IFA will carry that liability for life, so a complaint 30 years in the future could still be upheld against the IFA.

Why not speak to a few IFAs yourself rather then using an actuary? Some of them are very nice.

http://www.thepfs.org/yourmoney/find-an-adviser/

https://directory.moneyadviceservice.org.uk/en

Linton

thejaminthecity wrote: »

Has anyone managed to successfully transfer a defined benefit pension with a value over 30k to a SIPP using an FCA registered IFA.

Most pension companies whether source or target won't agree to transfers without favorable advice from an IFA and the actuary I used can't find an IFA willing to do the transfer because they are running scared of liability........

Wouldnt you be a little concerned about unlimited lifetime liability for a recommendation you made?

Suppose it were easy for people, most of whom would have little or no experience of managing large sums of money, to transfer their DB pensions. Perhaps in 5 years time world markets could fall by 50% destroying the retirement prospects of many of them. You can picture the tabloid headlines.

Conversely perhaps many of the pensioners would be likely to keep their masive lump sums in cash not wanting to take any risks and then demand restitution when they find they have much less to live on in retirement than if they had never transferred.

The resultant demands for compensation would dwarf PPI. No government dare let this happen.

soulsaver

See below post.

soulsaver

Yes I have - £340k cetv.
Lots of discussion on here - see here and access the links in post #13: https://forums.moneysavingexpert.com/discussion/5554142 see post #13

dunstonh

The IFA companies even want to charge you 3 - 4 % of your pension and you don't even know if the transfer will go ahead, another financial ripoff.

But you said you hadnt found any that would do it?
How is someone getting paid to do a high risk transaction a rip off?

You dont need a positive response to transfer.

PensionTech

Most pension companies whether source or target won't agree to transfers without favorable advice from an IFA

Not true. The transferring scheme (or "source") will always agree to the transfer without favourable advice, as they are legally obliged to do so. The requirement is simply that you get advice and can provide written proof of having done so - even if that advice is "you'd be a fool to transfer". The only exception is where there is a concern over whether the receiving scheme is a scam. Even then, schemes are technically legally obliged to transfer, but many will dig in their heels for as long as possible to stop you making a terrible mistake.

xylophone

Some schemes will refuse to accept a transfer without a positive recommendation from an IFA.

lutzi1

I managed to do it last year for a pot of just over £30k, though finding someone to do it wasn't easy for the reasons of liability you set out. The firm who did it wouldn't usually have done it but the factor was very high and I had good justifications for doing so. I'll pm you.

Dark_Sunday

Is the IFA fee taken from the DB CETV pot or do you need to pay hard cash ?