Do I need IFA to transferred DB pension to LGPS?

Kate36

Hello

I posted on here a few weeks ago regarding advice on whether to transfer my DB pension to LGPS.

I decided to go ahead and returned all the forms to LGPS. My DB provider has since written to say that they won't complete the transfer until they have received evidence that I have taken IFA advice.

I went back to the original paperwork and it states that I do not need IFA if "the receiving arrangement is a safeguarded arrangement, often referred to as a defined benefit, final salary or CARE arrangement".

LGPS have confirmed it is a DB scheme, so I am confused with what the problem is?

I called the DB provider today and I didn't get anywhere, they just kept repeating that it would not proceeed until they had received the evidence. I'm not sure what's to do next? Do I just need to bite the bullet and get the advice or can I complain somewhere. My DB pension is currently managed by Capita.

Any advice gratefully received!

Silvertabby

As I read this, I thought 'how strange' - until I got to the Capita bit and all was clear.

Try ringing them again, this time asking to speak to a senior administrator. If they still want to play silly beggars, then you may need to ask your LGPS for a quick letter confirming that it is a DB/CARE scheme.

Kate36

Thanks Silvertabby.

Have been feeling quite frustrated with it all today; I didn't have the letters to hand when I called them from work today, so I was a bit flummoxed when the person I spoke to was adamant that I needed IFA. He even put me on hold for 5mins whilst he consulted with a colleague when I challenged it.

I have emailed them as well and forwarded a copy of an email from LGPS confirming it's a DB scheme. I got the standard, we'll be in touch within 20 days reply.

I'll try calling later in the week (when I'm feeling stronger!) as you suggest.

xylophone

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

Pension benefits with a guarantee and the advice requirement
January 2016

Circumstances in which advice is required

Section 48 of the Pension Schemes Act 2015 and regulations made under it require pension scheme members who have subsisting rights in respect of safeguarded benefits worth more than £30,000 under the scheme to take appropriate independent advice from an FCA authorised adviser before:

• converting safeguarded benefits into flexible benefits (or in the case of benefits which are both safeguarded and flexible, into different flexible benefits)

• using a transfer payment in respect of safeguarded benefits to acquire flexible benefits under another scheme

• being paid an “uncrystallised funds pension lump sum” (UFPLS) in respect of their safeguarded benefits.

You are doing none of the above!

You are transferring from one defined benefit scheme to another.

Phone TPAS for advice if Capita continue to be difficult.

https://www.pensionsadvisoryservice.org.uk/

Kate36

Thanks Xylophone.

Just to let you know that I spoke to Capita again today, and this time I appear to have spoken to the right person as they confirmed that indeed I did not need IFA and that the transfer would now progress. She apologised about the letter and telephone conversation I had yesterday - it appears there are people on the team at Capita who do not know what the LGPS is which is a tad worrying!

Silvertabby

Kate36 wrote: »

Thanks Xylophone.

Just to let you know that I spoke to Capita again today, and this time I appear to have spoken to the right person as they confirmed that indeed I did not need IFA and that the transfer would now progress. She apologised about the letter and telephone conversation I had yesterday - it appears there are people on the team at Capita who do not know what the LGPS is which is a tad worrying!

When I worked for the LGPS we often referred to Capita as Crapita. Enough said !

number9

I am in the process of transferring an old occupational pension fund to a new Prudential Growth Fund. I know exactly what I'm doing having followed the advice of a recently retired IFA who has done the exact same transaction for himself. However, legislation says I need to use an IFA. KERCHING! £7500 fee out of my hard earned pension fund. This is the minimum fee and supposedly it's increased recently due to the cost of indemnity. It's a license to print money. Not happy. Hands are tied.

hyubh

number9 wrote: »

I am in the process of transferring an old occupational pension fund to a new Prudential Growth Fund. I know exactly what I'm doing having followed the advice of a recently retired IFA who has done the exact same transaction for himself. However, legislation says I need to use an IFA. KERCHING! £7500 fee out of my hard earned pension fund. This is the minimum fee and supposedly it's increased recently due to the cost of indemnity. It's a license to print money. Not happy. Hands are tied.

That's a rather different situation to Kate36's - I'd strongly suggest starting your own thread if you want help, as it would just confuse things discussing it in this one.

HappyHarry

number9 wrote: »

I am in the process of transferring an old occupational pension fund to a new Prudential Growth Fund. I know exactly what I'm doing having followed the advice of a recently retired IFA who has done the exact same transaction for himself. However, legislation says I need to use an IFA. KERCHING! £7500 fee out of my hard earned pension fund. This is the minimum fee and supposedly it's increased recently due to the cost of indemnity. It's a license to print money. Not happy. Hands are tied.

Without meaning to be rude about your retired IFA contact, there are some alarm bells ringing here.

I would be intrigued to know what analysis your retired IFA has done to come to the conclusion that moving your defined benefit pension (not his, yours) to prufund growth (?) is the most appropriate option for you. Moving a safe DB scheme to a safe(ish) DC scheme is an unusual thing to do.

Given the fact your retired IFA doesn't seem to understand the regulatory and legal process to give advice on DB transfers, nor has advised you that Prudential only retail their pensions via advisers, I would suspect that paying £7500 to get some proper, up to date analysis and advice, would be a price worth paying.

number9

I have engaged the services of the IFA and they have provided the exact same advice regarding my own circumstances (it's irrelevant whether I got the exact terminology correct in my post). They have carried out the same risk assessment, personal review and noted my income/expenditure as I had already prepared.

dunstonh

Prufund is a niche fund that shouldnt be used as heavily as it is. My "observation" and opinion is that whilst sometimes it is used correctly, too many low knowledge advisers stick everything in it. DB pension transfers are flooding into that fund and I struggle to see how many of them could justify it.

It's a license to print money. Not happy

It's also a quick way to lose the licence to advise. Especially if the recommendations are consistently to go into the prufund.