Transferring pension

Cazza

Hi! Wondered if I could have any opinions please?!?!

OH is ex-Armed forces, served Sept 1998 to April 2002, he has a preserved pension from this time. He has recently joined the Police and is therefore contributing to his employer's final salary scheme. In order to get his full pension he wil need to serve 35 years with the Police Force. He is 29 now and bearing in mind current compulsary retirement ages he will be short of the 35 years.

Should we transfer his Army pension into his Police scheme? The Police scheme is currently deducting 9% from his salary and the Police Authority are also contributing 9%. The preserved Army pension was £892.10 pa, terminal grant £2676.30 and Widows pension of £446.05. Current value of the pension is £1021.70 pa with £3065.09 terminal grant. The transfer values are ££733.46 pa, £2933.85 terminal grant and £366.73 Widows pension.

I'm inclined to transfer this, bearing in mind it will be transferred into another final salary scheme, but I don't really know much / have any real experience of pensions. What do you all think??

Thank you!

Andy_L

If it stays in the Army scheme it will only increase in value by RPI & be payed out at the schemes retirement age (55-60 depending on which one he's in)

If it is transfered the 4 years service he has will buy X years in the police scheme (probably more than 4 since the Army pension scheme is extremely good) & will then increase in value in line with pay rises (tradationally more than RPI).

He needs to find out what the police scheme will offer for the transfer, the values listed are fairly irrelevant as it is a public sector transfer & thus he will receive a fair (to him) transfer deal.

The numbers will probably make transfering a better deal unless there are some weird things going on, eg he's taken a big paycut on joing the police

Cazza

Thank you! No, compared to when he left the Army, he's on better pay now than in 2002. I've just had another look at the paperwork, and it looks as though the transfer in value is 2 years 162 days, so a little less than you thought unfortunately!

Cazza

Bump?! Any thoughts??

Two_Ton_Tess

Yes. The Police Pension Scheme is one of the few schemes that is better than the Armed Forces scheme your OH is in(old one, don't know about new 2005 scheme). It would follow that the time bought with a transfer value into the Police scheme would be less than that reckoned in the Army scheme. This would be outweighed with the benefit of his final pension being calculated on the amlagamated service using his final police salary. If he does not transfer, he cannot claim his Army pension until age 60. Even if he could not claim his police pension until 60, this plus the Army pension would not be as high as the amalgamated pension. Watch out for time limits to transfer. Usually this has to be within one year of joining the new scheme.

Retired_I.F.A.

Make an appointment with an I.F.A. who is g60 qualified.

No one on this forum can possibly give you best advice not even a currently practising qualified IFA.

DavidLaGuardia

Two_Ton_Tess wrote: »

Yes. The Police Pension Scheme is one of the few schemes that is better than the Armed Forces scheme

true in terms of benefits and possibly in the context of this post, but they also pay musch more for it so be careful when making such "absoute" comparrisons. I would say the armed services is second to none in the public sector in terms of employee cost to benefit. (correct me if I am wrong)