Defined Benefit (~3k) - what can we do?

Deisler

Kynthia wrote: »

When someone leaves a public sector DB scheme without the required two years membership in the scheme they don't qualify for a deferred pension. Therefore they are given two options:
1. to receive back their contributions less tax and their SERPs contributions. As they were contracted out until April 2016 and they need to be contracted back in and pay the higher NI contributions for that period of time.
2. to transfer the employer and employee contributions to another pension scheme.

The second is usually the greater amount and preferable to most people. This isn't really a 'pension transfer' as there isn't a pension if no action is taken. Therefore it shouldn't really need an IFA to provide advice.

Who exactly is saying you need an IFA as perhaps they believe you are trying to transfer out a DB pension using a cash equivalent transfer value (CETV) when actually you have no pension but have a brief oppotunity to keep the employer contributions that were made?

What happened was, Aegon sent Transfer Authorisation form on behalf of us to Prudential, and then Pru replied and said this is a Defined Benefit. Then Aegon said to us, in order to transfer this to them, we need a financial advisor.

hyubh

Deisler wrote: »

What happened was, Aegon sent Transfer Authorisation form on behalf of us to Prudential, and then Pru replied and said this is a Defined Benefit. Then Aegon said to us, in order to transfer this to them, we need a financial advisor.

Your wife should just find another provider to take her business to that actually understands the concept of a vesting period in a DB scheme. Pretty basic you would have thought, but there's a poster to this board with exactly the same issue every couple of months.

jamesd

Is £3000 the CETV, the expected retirement income at state pension age or something else? Have they told you the "safeguarded benefits value" - the CETV - if the money was left in the scheme (nil, it'll all vanish) that supports it being above the £30,000 threshold for obtaining DB transfer advice?

It seems as though Prudential, or at least the person involved there, is being silly or applying an in-house rule, not a legal requirement. You might try giving Hargreaves Lansdown and AJ Bell a call. Be sure you start the conversation by saying "I was in a defined benefit pension for too short a time for it to vest and I'm told that I must move the money to another pension or lose it".

Deisler

jamesd wrote: »

Is £3000 the CETV, the expected retirement income at state pension age or something else? Have they told you the "safeguarded benefits value" - the CETV - if the money was left in the scheme (nil, it'll all vanish) that supports it being above the £30,000 threshold for obtaining DB transfer advice?

It seems as though Prudential, or at least the person involved there, is being silly or applying an in-house rule, not a legal requirement. You might try giving Hargreaves Lansdown and AJ Bell a call. Be sure you start the conversation by saying "I was in a defined benefit pension for too short a time for it to vest and I'm told that I must move the money to another pension or lose it".

I have posted the original letter back for Aegon to use as the notification letter to Prudential, but as far as I can recall, the amount of money (~ £3k) is 'cash transfer lump sum' or something like that.

Yes, will give them a call tomorrow to see what they say.

Kynthia

Deisler wrote: »

What happened was, Aegon sent Transfer Authorisation form on behalf of us to Prudential, and then Pru replied and said this is a Defined Benefit. Then Aegon said to us, in order to transfer this to them, we need a financial advisor.

Tell Aegon that it's not a pension transfer as you weren't in the scheme long enough to have a DB pension, and that this is an opportunity to keep the employer and employee contributions rather than being put back into the position you would have been if you had never been a member.