Pension company not telling me what my pots worth

dunstonh

C_Mababejive wrote: »

Are DB transfer outs really a great way for DB pension schemes to offload liabilities rather than a "strain" on the scheme?

On paper with future planning or in reality?

Transfer outs reduce liability on paper. However, the assumptions used at the moment are so low that reality is likely to be much better than that. However, companies and trustees cannot go by what they think is realistic. They have to go by those low assumptions. So, transfer out gets rid of a liability. So, good for today. Maybe not as good for 20-30 years time.

Malthusian

C_Mababejive wrote: »

Are DB transfer outs really a great way for DB pension schemes to offload liabilities rather than a "strain" on the scheme?

If there's a stockmarket correction or crash in the near future, getting people to transfer out while the scheme's assets were at a high will look like a stroke of genius. If they'd stayed and the stockmarket fell, the scheme would have had largely the same liabilities and less money to pay them with.

In the event of such a crash, the investors will now hold a CETV which is worth much less than they were offered - indeed, if the scheme had offered them what their fund is currently worth in the first place, they'd never have taken it. But it doesn't matter because they were made to take advice, they understood the risks and they knew that such a crash would happen at some point. *cough* That's what we mean when we talk about all the risk being transferred from the scheme to the member.