IFA Rubber Stamp

Aegis

phykell wrote: »

I think it’s an excellent reason to move and if more people did it, perhaps we’d all receive better service. Personally, I think there’s no excuse these days for providers who don’t provide an online portal to allow their clients to monitor their pensions’ performance on a daily basis if necessary. When I ask for a valuation it can take a matter of weeks for a response!

If you have a final salary pension it doesn't "perform" at all, let alone on a daily basis. You don't need that service, and it would cost a lot to implement, so the trustees are quite right not to spend huge amounts of cash on an IT infrastructure that the scheme members don't need and which will become obsolete once everyone's pensions are in payment.

phykell

HappyHarry wrote: »

It's not a matter of just changing provider.

It's a matter of changing the whole structure of your final salary pension, and removing all the guarantees behind it. This is not a task to be undertaken lightly. It is not usual for such action to be in your best interest, and so finding an adviser to sign off on such a transfer will be difficult, and expensive. The adviser will need to carry the risk of you complaining about this high risk transfer for ever. Certainly phrases like



and



are going to make any potential adviser you find very, very wary of assisting you with this.

Can I ask you then, as an IFA, how much of a consideration is service level as a component of a pension? I think it’s extremely important and it’s enough for me to choose one provider (for any service I can think of) over another so why shouldn’t it be the case for choosing whether or not to *stay* with a provider as well?

The amount of money should be incidental in my opinion - the £30k figure, as a threshold for the legislation, certainly seems arbitrary at best.

sjp999

Piggybacking here... If there's any concern that a DB scheme is heading towards the PPF, would that soften the, understandable, "don't do it" feelings our esteemed IFA's might have?

Given the way that retail and the high street is heading (retail park in my case mostly) I can see a few more schemes suffering a la BHS & HOF.

xylophone

You do not appear to understand the nature of a defined benefits pension.

Have you read your scheme pension booklet?

A defined benefit pension plan is a type of pension plan in which an employer/sponsor promises a specified pension payment, lump-sum (or combination thereof) on retirement determined by a formula in scheme rules ( or sometimes statutory requirements) based on the employee's earnings /length of service / age, rather than depending directly on the individual's contributions/investment decisions.

It usually also promises benefits for widow/er/ dependents and very often payments on death before retirement of the member.

Therefore there is no need to monitor your pension on a daily or even monthly basis - your end year benefit statement should suffice.

You might find this of interest

https://www.royallondon.com/about/media/news/2018/may/five-good-reasons-to-transfer-and-five-good-reasons-not-to-royal-london/

dunstonh

Can I ask you then, as an IFA, how much of a consideration is service level as a component of a pension?

For a pension provider, quite high. For a DB scheme, I dont really care as its not important.

I think it’s extremely important and it’s enough for me to choose one provider (for any service I can think of) over another so why shouldn’t it be the case for choosing whether or not to *stay* with a provider as well?

But you are talking about a DB scheme. Not a pension provider.

The amount of money should be incidental in my opinion - the £30k figure, as a threshold for the legislation, certainly seems arbitrary at best.

It comes about from old legislation that considered under £30,000 a trivial figure. Over £30,000 means that the benefits are likely to be more significant. And as the transaction, you want to do is wrong in 4 out of 5 cases, you should at least be able to understand why people need protecting from themselves.

bostonerimus

Aegis wrote: »

If you have a final salary pension it doesn't "perform" at all, let alone on a daily basis. You don't need that service, and it would cost a lot to implement, so the trustees are quite right not to spend huge amounts of cash on an IT infrastructure that the scheme members don't need and which will become obsolete once everyone's pensions are in payment.

DB pension plans should be transparent and provide their members with understandable investment performance reports on a regular basis even if many members won't be that interested. I have a DB plan and it is good about providing quarterly reports...see here

http://www.mapension.com/

I check on performance and funding level even if the fund is government backed and basically cannot fail. Still I'd rather not rely on politicians to guarantee my pension is paid as it should succeed financially on it's own.

HappyHarry

phykell wrote: »

Can I ask you then, as an IFA, how much of a consideration is service level as a component of a pension? I think it’s extremely important and it’s enough for me to choose one provider (for any service I can think of) over another so why shouldn’t it be the case for choosing whether or not to *stay* with a provider as well?

The amount of money should be incidental in my opinion - the £30k figure, as a threshold for the legislation, certainly seems arbitrary at best.

Service levels for a DB pension? They would be almost irrelevant as a consideration. At the end of the day, the trustees need to arrange a monthly payment to your bank account, and reduce it on your death, and pay it to your partner's account. There isn't much service needed.

You can't chose to switch final salary providers. You can only chose to ditch your final salary scheme in exchange for a completely different type of pension. That's where the risk is.

If the legislation is to be there, then a threshold figure needs to be in place. It would be pointless for someone with a £1,000 CETV to need to take expensive advice. Personally, I think £30,000 is too low a threshold, but then I wasn't asked.

HappyHarry

sjp999 wrote: »

Piggybacking here... If there's any concern that a DB scheme is heading towards the PPF, would that soften the, understandable, "don't do it" feelings our esteemed IFA's might have?

Given the way that retail and the high street is heading (retail park in my case mostly) I can see a few more schemes suffering a la BHS & HOF.

IFAs who are pension transfer specialists generally don't have a "don't do it" approach. Instead, they tend to have a "lets analyse the client's circumstances and objectives, as well as the pension scheme, in great detail before reaching any conclusion" type approach.

Yes, the status of the scheme funding is a consideration. This will again vary between every scheme and member.

In the worst case scenario, the pension will fall into the hands of the PPF.

If the member was due to retire with £10,000 pa next year, all of which had been accumulated post-1997, then the risk to the member of the pension falling into the PPF would be small, as the member would have good protection if it did.

If the member was due £100,000 pa, mostly accumulated prior to 1997, then a scheme funding shortfall would be a significant risk to the member's future.

phykell

dunstonh wrote: »

It is daft to be cynical of something you dont understand. If you did make even a little attempt to understand them then you will see there is nothing to be cynical about.

I think it’s unfair to say that I haven’t made enough of an attempt to understand them but even if the latter was true, there is plenty of evidence out there which clearly shows how often pensions fail to perform, how poor the service level is, how opaque the operation, management and administration often is, and how little confidence the public have in pensions generally.

The legislation is protecting your from making a mistake.

Actually, it’s costing me money and it’s going to make it difficult for me to make an informed choice about how my retirement pot is managed, and by whom.

Fund performance is irrelevant to you in a DB scheme. However, it will become relevant if you transfer out.

I didn’t say it was; generally speaking, people may wish to change providers based on performance and I’m doing just that with regards to other pensions I have.

DB schemes are not pension providers. You generally expect a poorer quality admin service with DB schemes but in reality, there is only a handful of times in your life you have to deal with them. So, admin is not a valid reason to transfer.

Apologies for the confusion and for using inappropriate terms but I completely disagree with your claim that the service level is not a good reason to transfer. A poor service level equates to a lack of confidence from my perspective and as we’re talking about trust here - they have a significant amount of my money - I need to be sure that they will be suitably responsive on the date of my retirement. As I also mentioned, the recent breach of my personal details did nothing for my level of confidence as I’m sure you can imagine!

Not really. The most common excess on PI insurance for DB transfer complaints is £5000. So, that is line with the excess. You are asking an IFA to do the highest risk advice transaction they can give. A transaction that is considered missold unless proven otherwise. A transaction that can see the adviser bankrupted/firm closed down even if they think they are doing the right thing.

Thanks, I appreciate the insight. Unfortunately, while it sounds justifiable in the terms you’ve described, the client, i.e. me, will have to pay thousands of pounds to transfer my money out.

But again, you are commenting from a position of not knowing what you are doing. There are several comments you have made that indicate you do not know what you are doing. And with 4 out of 5 people worse off due to transferring, you haven't said a single thing that suggests it is justifiable to transfer.

As I say, I think that service level, trust, etc, are all important components of a pension, and it’s worrying to me that you consider nothing of what I’ve said as justification for transferring out. They’ve lost my details, sent out my personal information to third parties by mistake, promised to send out valuations which weren’t then sent. On the phone it’s almost impossible to contact them or find the right person to speak to (every time) - there’s no online service (it’s 2018!). I recently moved house and getting my address changed was a Herculean task on its own. But at least I’m not losing a couple of hundred pounds by transferring out - right?

They are not a provider. You are not invested in anything. You really seem to be quite confused on this. The legislation appears to be working here.

I’m very much invested - they have a considerable amount of my money and I’m expected to trust that they will deliver on the date of my retirement.

Tealblue

phykell wrote: »

I don’t need advice, I don’t wish to pursue a complaint against the administrators of the pension to hopefully improve the fund performance and/or their customer service. I prefer to vote with my feet and deal with a pension provider that *I* have confidence in, having used them for years for my other pensions. An IFA isn’t going to be able to convince me that I should put up with the service I’ve received so the “advice” I want is simply to acknowledge that I’m quite prepared to potentially reduce the value of my fund for the sake of a more reliable provider.

It's a final salary scheme. Fund performance and customer service are the concern of the trustees. The former isn't an issue for you; it's the employer who has to make good any shortfall in the fund.

You are moaning about the service you have received, but frankly given your level of profound ignorance, it is possible the administrators have simply abandoned any hope of helping you to understand the type of scheme you are in, particularly if you are asking questions about fund value.

As for voting with your feet...cutting off your nose to spite your face sounds more like it.