Section 32 Help

Scotty62

In 2000 I agreed to transfer a 20 year LA Pension Final Salary into a Section 32 with SE now AEGON.
I stipulated access at 60 and full access at that time i.e. not an annuity.
Long story short as you can imagine I am now disappointed at 62 to be unable to access the pension until 65 due to insufficient GMP and then facing an annual annuity of £4k with I believe no further options.
I realise the attraction of an annuity in these uncertain times but on balance would rather have access by adding the £160k with AEGON to my other pension with Standard Life and draw down from next year when am 63.
Is it possible to commission a report from an advisor that in foregoing the GMP I might effect transfer?

dunstonh

I stipulated access at 60 and full access at that time i.e. not an annuity.

How could you stipulate such a thing as annuity purchase was mandatory in 2000?

Long story short as you can imagine I am now disappointed at 62 to be unable to access the pension until 65 due to insufficient GMP and then facing an annual annuity of £4k with I believe no further options.

You can access it earlier. You would have to forgo the GMP though and that may be a costly error.

You are not required to buy an annuity.

Is it possible to commission a report from an advisor that in foregoing the GMP I might effect transfer?

yes. Indeed, it would be mandatory for you to do so as it is a safeguarded benefit and over the value of £30,000

Scotty62

I know that now but back then I asked the advisor if this was possible he affirmed full access at 60

dunstonh

Scotty62 wrote: »

I know that now but back then I asked the advisor if this was possible he affirmed full access at 60

And you can. Just if you give up the GMP. You would have been able to with Aegon if the returns were sufficient to meet the GMP.

Silvertabby

Based on a date of birth of 1956 and LGPS (rule of 85) service of :

1980 to 2000 (live service) = 20 years
2001 to 2016 (deferred service) = 15 years
Age = 60 years
Total = 95 years

... you would have met R85 and thus have been able to take your 20 year LGPS pension unreduced from age 60.

Did your financial advisor know this - or was the sole purpose of the transfer was because you expected to be able to take the whole lot as a one-off lump sum at 60 ?

woolly_wombat

Silvertabby wrote: »

Based on a date of birth of 1956 and LGPS (rule of 85) service of :

1980 to 2000 (live service) = 20 years
2001 to 2016 (deferred service) = 15 years
Age = 60 years
Total = 95 years

... you would have met R85 and thus have been able to take your 20 year LGPS pension unreduced from age 60.

Did your financial advisor know this - or was the sole purpose of the transfer was because you expected to be able to take the whole lot as a one-off lump sum at 60 ?

Oh dear oh dear...

Why why why was this transfer ever permitted?

xylophone

Have you obtained a new state pension statement?

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

http://m.financialadvice.net/s32_buy_out_plan/zone/1288

You were in LGPS 1980 -2000?

You will have pre 88 GMP/ post 88 GMP/excess.

The GMP must be revalued in deferment - it is likely that SE/Aegon used Fixed Rate but you can check.

https://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/18/what-is-a-gmp/

You must be paid at least your revalued GMP at GMP age (65 for a man).

Once in payment, the post 88 GMP must escalate by up to 3% CPI.



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

There is no guarantee of a positive recommendation from the Pension Transfer Specialist and SL could well refuse to accept the transfer in those circumstances.

Did you take advice from a specialist IFA before transferring out your pension?

Scotty62

DOB 250156
Did I seek advice ?
Yes indeed and despite 2 separate complaints have had no redress via Ombudsman nor do I expect such
I have spoken to two separate advisors both saying it’s not possible to transfer as indeed are AEGON.
Moreover from 2012 Aegon Annual Statements confirmed access at 60 only in 2016 did they retract when via another advisor of my intention to retire at 60
In redress they’ve offered £200 for this
Am I correct in assuming that the access to 25 % tax free lump sum and the access for my wife and son to a personal pension as opposed to a deferred annuity on my death as opposed to a small annuity for five years mean that in general it’s worth perusing ?
Forgive me I know you’d need to know more
Additionally sorry for any typos am on a busy standing room only train

Silvertabby

Scotty62 wrote: »

DOB 250156
Did I seek advice ?
Yes indeed and despite 2 separate complaints have had no redress via Ombudsman nor do I expect such
I have spoken to two separate advisors both saying it’s not possible to transfer as indeed are AEGON.
Moreover from 2012 Aegon Annual Statements confirmed access at 60 only in 2016 did they retract when via another advisor of my intention to retire at 60
In redress they’ve offered £200 for this
Am I correct in assuming that the access to 25 % tax free lump sum and the access for my wife and son to a personal pension as opposed to a deferred annuity on my death as opposed to a small annuity for five years mean that in general it’s worth perusing ?
Forgive me I know you’d need to know more
Additionally sorry for any typos am on a busy standing room only train

Had you stayed with the LGPS you would have been able to take 25% of the notional fund value as tax free cash, plus there would have been a widow's pension (and a child's pension up to age 18 or 23 while in full time education) in the event of your death. Taking 25% cash would have meant commuting (giving up) some of your pension but dependant's pensions are based on the full, unreduced, member pension.

Assuming that you worked full time during your 20 years service your GMP wouldn't have been a problem as your LGPS benefits would have been way higher.

Based on the information you have given I am - er -surprised that your IFA at the time thought that this transfer would be appropriate for your needs.

Scotty62

As have been one or two advisors since but he was very persuasive and seemed sure that I could both retire at 60 and have full access on a much larger pot than if I stayed with the LGPS.

Silvertabby

Scotty62 wrote: »

As have been one or two advisors since but he was very persuasive and seemed sure that I could both retire at 60 and have full access on a much larger pot than if I stayed with the LGPS.

Ouch. Is this guy still in business?