more than one pension....help!!!

breadboy05

AnotherJoe wrote: »

Where then did the sum of £25k come from you mentioned in the original post?

If there was mention of such a sum, possibly as "Cash Equivalent Transfer Value" (CETV) a alternative for both or either is to take the lump sums of around £25k and place them into another pension plan of her choosing. There are various rules and such like around doing this, more info needed.

£500/year is pretty miserable compared to £25k now. She can then take her time deciding what to do with it.

That's what they are worth each...give or take as they wont give a final figure until she commits to getting the money.

One says as an example (at the time of doing that letter) the values of taking 25% and paying 20%tax on the balance.

The other letter give a choice of £650 p/a or £3300 and £500 p/a

xylophone wrote: »

See


Is your wife currently contributing to a pension/and or has other pension arrangements?

Has Scheme A contacted your wife to offer trivial commutation?

What is the value of Scheme B?

What is the value of any other pension arrangement?

She's only contributing in as much as she's paying tax on her wages working for an agency.

Trivial comm...yes

The value of B... no figures have been given, but she has been told it's under 30k (we are assuming it's the same as the other one ish) she has to commit to get a figure

She has no other pensions... even the state one will be pants as she has done quite a few years as self employed.....

breadboy05

AnotherJoe wrote: »

£500/year is pretty miserable compared to £25k now. She can then take her time deciding what to do with it.

We have talked about the choice of lump sum now or a whole £9.62 per week!!!!!! bearing in mind that that's £1.37 per day!!!!

Silvertabby

it's not a Commencement Lump Sum, we think....according to one of her paperwork, one is a take 25% tax free and the rest at 20% taxed and the other according to the paperwork, offers her a pension of £650 p/a or a residual pension of £500 p/a and a tax free cash sum of £3300.00 Posted by breadboy05

As both are DB schemes, the quote from one for 25% tax free and the rest taxed at 20% has been offered under triviality rules. Unfortunately, your wife may not be able to take this offer as it doesn't look like she meets the terms and conditions - ie, the combined value of ALL of her pensions (excluding the State pension) must be less than £30K. If so, her only options would be to take both pensions as a one-off lump sum and an annual pension, like the second scheme offer, or transfer both lots of benefits into a personal pension/SIPP.

Thrugelmir

breadboy05 wrote: »

We have talked about the choice of lump sum now or a whole £9.62 per week!!!!!! bearing in mind that that's £1.37 per day!!!!

Alternatively let them be and wait. If CPI does rise as predicted. Then so will the final pensions that are payable.

If she's made no other pension provision and reliant only on the state. Then even another £10 is going to be significant!

Assume that there's also a dependents pension payable should you outlive her.

xylophone

she has to commit to get a figure

The PAS has provided more detail in this "Spotlight" link.

https://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/Taking_small_pensions_Detailed_SPOT008_V1.5.pdf

and see post 14 above.

She has 2 deferred DB pensions and her current personal pension.

It would appear that "triviality" may not be possible as her total pension provision (other than state pension) is greater than £30,000?

even the state one will be pants as she has done quite a few years as self employed.....

She needs to get a New State Pension Statement.

https://www.gov.uk/check-state-pension

Assuming that the value of each of the DB pensions is under £30,000 she may be able to transfer out to a DC personal pension without needing to take advice from an IFA and then use pension flexibility to access.

However, if she transferred into a DC arrangement, if she wishes to continue to contribute to her personal pension she should bear in mind the MPAA - see here

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/the-annual-allowance

PensionTech

She has 2 deferred DB pensions and her current personal pension

Where's the personal pension?

Unfortunately, your wife may not be able to take this offer as it doesn't look like she meets the terms and conditions - ie, the combined value of ALL of her pensions (excluding the State pension) must be less than £30K.

It would appear that "triviality" may not be possible as her total pension provision (other than state pension) is greater than £30,000?

I thought this but if both pensions are around £650pa (which we don't know from the info given so far), she may still be under the limit, since it's based on 20x the pensions and not the CETV (20 x 2 x £650 = £26,000). Unless there is a personal pension and it's more than a couple of grand.

Edit: I do also wonder whether the second pension may in fact be a DC pension - it's odd to get a lump sum value but not an annual value for a DB pension. Depends what you've asked for, of course. Is the OP sure the second pension is DB - i.e. a promise to pay an annual amount, rather than an invested fund you can use to purchase retirement benefits with an insurance provider?

xylophone

Where's the personal pension?

See post 12.

She's only contributing in as much as she's paying tax on her wages working for an agency.

With regard to the value of the DB pensions, as you say, this is unclear - in post 1

Shes had correspondence from both and is now eligible to claim from both. Shes looking at around 25k each, give or take.

But then

That's what they are worth each...give or take as they wont give a final figure until she commits to getting the money.

xylophone

PensionTech - I've just had a thought - should a scheme offer TC before checking on the value of a member's other pension arrangements?

Silvertabby

PensionTech - I've just had a thought - should a scheme offer TC before checking on the value of a member's other pension arrangements? Posted by xylophone

The LGPS I worked for did. However, the covering letter clearly explained that this offer was subject to the member's written confirmation that they had no other pension benefits due other than the State pension. It went on say that if their combined pension benefits exceeded £30K, then they could only take the LGPS pension as £XX lump sum and £X annual pension.

The pension claim form was set out as a declaration, in which the member confirmed that they had no other pension rights, or that their combined benefits were under £30K - in which case they had to list their other pensions and values.

Of course, people just see...... £XX............ sign here.

I really couldn't count the forms which came back ... " I confirm that I have no other pensions rights........... then listing, for example, 20 years with the Civil Service .

When I retired the LGPS was in the process of setting up a central database of all LGPS members, so individual schemes could at least check to see if their member had any other LGPS service before offering pension benefits. I can't see that extending to a database of all public and private pension schemes.

PensionTech

See post 12.

I did, that's why I'm confused as all I could see was this:

She has no other pensions... even the state one will be pants as she has done quite a few years as self employed.....

It might be that you're talking about the bit where the OP says "she's only contributing in as much as she's paying tax on her wages" but I think this is a misunderstanding re the state pension, rather than confirmation of the existence of a personal pension.

should a scheme offer TC before checking on the value of a member's other pension arrangements?

Given the abysmal state of knowledge of TPAs re trivial commutation, there's some variety in how this is done. My preferred practice would be to inform a member that their benefits MAY be low enough for triv comm but it depends on what benefits they have elsewhere, and get them to fill out a specialised triv comm disclosure form (not the LTA form that most people get people to complete, since they don't usually ask for uncrystallised benefits, and there's a lot of confusion about things like how pre-A Day benefits should be valued) that gathers the relevant info re other benefits - as well as other conditions like not having used triv comm before more than 12 months ago. The TPA can then assess the member's eligibility and let them know whether TC is indeed an option, with the relevant option forms.