CETV worth transferring?

Parking_Trouble

I have a small deferred DB pension from Glaxo Smith Kline (GSK). I worked for Smith Kline and French for 5 years back in the 80's.

I finally got around to making sure they had my contact details as hadn't heard from them for many years. I got a CETV from them.

NRD is 2023. I am 59. Projected annual pension is £1,388.
CETV is £106k.

I have my main DB pension with NRD 2018 which I can easily live on.

Seems like a no brainer to me to take 25% TFLS and put the rest in some sort of drawdown arrangement but not for day to day living expenses. I only need it to last for 10-15 years after which my spending sprees should subside.

What is an IFA likely to charge to support the transfer out?

Where can I find somewhere safe to put the money without incurring heavy charges? I am happy to self manage the investments.

xylophone

First find your Pension Transfer Specialist - other posters have not found this easy.

http://www.pruadviser.co.uk/content/knowledge/technical-centre/pension_transfer_conversion/



https://www.fca.org.uk/news/news-stories/advising-pension-transfers-our-expectations

As for cost https://forums.moneysavingexpert.com/discussion/5667413

bostonerimus

That seems like a very low annual pension income for the CETV given.
If you already have a DB pension then cashing out would give you some diversity, but obviously you'd be taking on risk.

Parking_Trouble

bostonerimus wrote: »

That seems like a very low annual pension income for the CETV given.
If you already have a DB pension then cashing out would give you some diversity, but obviously you'd be taking on risk.

Yes. I view it the other way around. It's a very high CETV for the projected pension. Hence why a transfer looks like a no brainer.

Have I read it right?

The deferred pension figure at time of leaving in 1987 was £850
The GMP figure is £1,388.

Assume that £1,388 is the project pension at age 65?

AlanP_2

The numbers don't look aligned to me.

The GMP you were quoted in 1987 is the minimum as far as i understand it.


Upratings for pensions with a GMP since then are covered in this link

https://www.barnett-waddingham.co.uk/comment-insight/blog/2012/07/24/revaluation-for-early-leavers/

I would ask them for Annual Pension if taken now (will be subject to a reduction) and at the 2018 NRD to see what it is currently likely to pay and then see what the deal looks like in simple terms.

xylophone

When exactly did you work for the company?

You should have been given a statement of deferred benefits when you left showing pre 88 GMP/post 88 GMP /Excess.

What exactly does the statement show?

What was Scheme Retirement Age?

Does the scheme revalue GMP by Fixed Rate (likely) or Full Rate?

Have you obtained a new state pension forecast?

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

GSP

Parking Trouble, it seems there are final salary schemes offering a lot more than others. From what
I have seen, that figure (a nice surprise as well) can be true for that amount of DB.

Parking_Trouble

xylophone wrote: »

When exactly did you work for the company?

You should have been given a statement of deferred benefits when you left showing pre 88 GMP/post 88 GMP /Excess.

What exactly does the statement show?

What was Scheme Retirement Age?

Does the scheme revalue GMP by Fixed Rate (likely) or Full Rate?

Have you obtained a new state pension forecast?

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

worked there Jan 1982 - April 1987

Final Pensionable Salary - £10,827
Total Contributions £1,243.98

Total GMP at exit - 314.60
Total GMP at 65 Male, age 60 Female - £1,388.45

Nothing mentioned about rates.

Scheme Retire age is 65 although Smith Kline and French was 62 but not clear if it has changed during SKBeecham and GSK mergers. Letter says NRD 2023 (65)

I am due a full £158.76 per week state pension at 66

xylophone

You mention a pension at leaving of £850 in your first post.

Does the statement on leaving show a GMP of £314.60 and an excess of £535.40?

See link re revaluation in 5 above.

You might wish to check with the administrator on how the GMP and excess are revaluing in deferment.

All your GMP is pre 88 so that when the pension comes into payment, there is no obligation for the scheme to index link this part of your pension - the balance would be index linked by scheme rules.

With regard to your state pension, is the £158.76 your starting amount as at 6 4 16?

Or is it the maximum you can achieve if you continue to contribute?

Parking_Trouble

xylophone wrote: »

You mention a pension at leaving of £850 in your first post.

Does the statement on leaving show a GMP of £314.60 and an excess of £535.40?

See link re revaluation in 5 above.

You might wish to check with the administrator on how the GMP and excess are revaluing in deferment.

All your GMP is pre 88 so that when the pension comes into payment, there is no obligation for the scheme to index link this part of your pension - the balance would be index linked by scheme rules.

With regard to your state pension, is the £158.76 your starting amount as at 6 4 16?

Or is it the maximum you can achieve if you continue to contribute?

Total deferred Pension at exit = £850.98 p.a.

Total GMP at exit = £314.60 p.a.
Total GMP at age 65 male = £1,388.45

State pension.
Estimate based on your National Insurance record up to 5 April 2017 = £126.85 a week. The higher amount is in 2024

xylophone

You will achieve the higher state pension by continuing to pay or be credited with NI.

https://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf

With regard to the deferred pension, I would check with the administrator concerning how your pension is revaluing in deferment and how it will increase in payment - if you go the transfer out route, your PS will no doubt cover this with you anyway.