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Transfer out of FS and into SIPP

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  • xylophone
    xylophone Posts: 45,609 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I think we will have to go back and check (again)

    Have you checked out the links in my post above?
  • I have had a good look at the links posted.....but the deal on the table still looks too good to be true...its a multiplier of around 60.

    £157K spread around a few stock markets, invested in very low cost trackers should give a pretty good return, even if we assumed a 2% yield, it would still give around £3K per year, if we used the 4% "rule" then we get about £6K.

    I can't really see a downside to taking the money.

    The question is, what is the cheapest way to make it happen ?

    M
  • Cocktailqueen
    Cocktailqueen Posts: 10 Forumite
    Sixth Anniversary Combo Breaker First Post
    edited 20 February 2017 at 7:59PM
    I signed my transfer papers last week for 2 deferred DB pension schemes. An IFA friend of mine recommended someone at his firm who had the pension transfer qualification. I was very clear from the outset that I wanted a SIPP that I would self manage. I managed to negotiate a fee of 1% and instructed him to do the work.

    I spent best part of 10 weeks chasing him for his final recommendation. He eventually suggested that I invested with some funds that he regularly recommended. I reiterated that I would be transferring to a SIPP and he was not very happy as I suspect he wanted to have an ongoing service agreement and charge me 1%.

    When I finally managed to get a meeting with him he reluctantly signed the adviser declaration which comes with the transfer pack to confirm that he had provided me with advice. He also had to provide a Certificate of Professional Standing stating his adviser qualifications. I found a SIPP provider and liaised with them with regards to opening the SIPP and completing the forms to get back to the administrator. II had to fill in lots of forms which were not straightforward. II also had to liaise with the pension administrator because my 3 month guarantee period was about to expire and I had to get the receiving scheme to fill in forms and get them back. I have been told that transfer values are going down which gave me some sleepless nights and my IFA said that I could stand to loose 50k if they had to re-calculate if my pack did not get back on time.

    If you saw what he gave me as his recommendation report you would not believe it. Let's hope that when FCA do a thematic review into pension transfers which they certainly will given that it is high risk business, I hope for his sake they do not select my file.

    I would recommend that you get an IFA to do the work as soon as possible. Do not sit on the CETV and if you transfer to a SIPP start looking at providers as soon as possible. It takes a lot of research to find the right one for your size of fund. Some charge a percentage and some a flat fee. My pot is fairly big so I went for a fixed fee.

    I do wonder how may people take out a SIPP versus using an IFA.
    Good luck.
  • zagfles
    zagfles Posts: 21,438 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Chutzpah Haggler
    Mecb096a wrote: »
    Hi,

    Please let me clarify.

    According to the info pack that has been sent.

    Total Deferred Pension at date of leaving - £1,538,85
    Date of leaving - 29th March 1996
    Normal retirement age - 60

    Total transfer value, including liability for the GMP: £156,936.14
    Total GMP cash equivalent/protected rights included above £30,802.54

    When the pack arrived we rang the scheme administators with the simple question, " what sum would we receive it we transferred the CETV into a SIPP - they were very clear that the sum transferred would be £156,936.14.

    This value is between two and three times what we expected.

    To good to be true ?


    She is just about to turn 51.

    I have calculated what the FS pension would be worth in todays money by simply indexing up with RPI - I appreciate that this may not be a perfect calculation, but it gives a pension in todays money of around £2500.

    Am I missing something ?

    M
    Yes. The GMP is likely to be increased by fixed revaluation, most private sector schemes use fixed revaluation. For a leaver in 1996 that's 7% a year compound (see links above). For 21 years that's a 314% increase. Way above RPI.

    Doesn't the leaver pack say how much is GMP, and give the way it's indexed in deferment? You could ask them for an up to date statement of benefits.
  • xylophone
    xylophone Posts: 45,609 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Doesn't the leaver pack say how much is GMP, and give the way it's indexed in deferment? You could ask them for an up to date statement of benefits
    .

    Post 8, 12, 13 above......
  • zagfles
    zagfles Posts: 21,438 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Chutzpah Haggler
    xylophone wrote: »
    .

    Post 8, 12, 13 above......
    What about them? They don't answer my question.
  • xylophone
    xylophone Posts: 45,609 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    What about them? They don't answer my question.

    Look at the first sentence in post 8 and the first two links.

    I also suggested that the OP should consult the scheme booklet.
  • sandsy
    sandsy Posts: 1,752 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Mecb096a wrote: »

    The only area of doubt is the transfer value - it seems much too high.

    I think we will have to go back and check (again)

    B

    It's more likely that your estimate of £2500 is too low.
  • zagfles
    zagfles Posts: 21,438 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Chutzpah Haggler
    xylophone wrote: »
    Look at the first sentence in post 8 and the first two links.

    I also suggested that the OP should consult the scheme booklet.
    Yes, but as post 13 shows the OP seems to be ignoring the indexation issue, has made no comment on the value of the GMP and how it's indexed which I asked.

    Sometimes people need telling a few times before it sinks in, which is why I tried to point out the massive difference in indexation assuming RPI and indexation at 7% compound. The OP could be way way underestimating the current value of the pension. I make no apology for re-iterating this point.
  • Silvertabby
    Silvertabby Posts: 10,138 Forumite
    10,000 Posts Eighth Anniversary Name Dropper Photogenic
    edited 20 February 2017 at 10:23PM
    OK, we're all guessing here. OP, can you ask for a current pension quote (for retirement at 60) - showing the revalued GMP if possible? As they've given you a current CETV they can't refuse a current pension quote as you (and any IFA) won't be able to consider the ins and outs of a possible transfer without all relevant and up to date information.
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