Pension transfer into Sipp

pitza

Hi, I wrote to Aviva regarding an old frozen pension that I had with Norwich union in the 1980s to see if I could transfer it into my sipp and what the current transfer value is, this is their reply.
“ This is a replacement policy from a terminated defined benefit occupational pension scheme. The benefits were bought out of the scene fund when the scheme wound up. Therefore there is no fund value and no annuity rates apply. The defined benefits are fully secured with Aviva.
The current transfer value is £31,461.51 of which £31,447.08 is the value of pre- 1988 guaranteed minimum pension (GMP) and £0.00 is the value of post- 1988 GMP. We cannot guarantee these values, they are for illustration purposes only.
My questions are, 1. what do they mean when they say “ We cannot guarantee these values, they are for illustration purposes only.”
and
2. Can I transfer this policy into my Sipp or not, if I can then how do I find the true transfer value?
Regards
Pitta.

want_to_save

Hi Pitta


The value they have quoted is the transfer value but this can change on a daily basis.


I would ask them what the GMP value is at retiremnt. This is a Guaranteed Minimum Pension and can be a valuable pension benefit which you would lose on transfer.


If you still want to transfer you need to ask them for discharge forms and speak to your SIPP Provider.

pitza

Hi want-to-save
Thanks for your reply, in the letter they say” your pension will be £1,356.24
a year guaranteed for five years. There is also a death- after- retirement spouses pension of £678.12 a year.
All pension benefits increase in payment at 3% compound a year.

Paul_Herring

If you still want to transfer you need to ask them for discharge forms and speak to your SIPP Provider.

And likely get advice - it looks to be over the £30K limit that requires it.

dunstonh

2. Can I transfer this policy into my Sipp or not, if I can then how do I find the true transfer value?

GMP is a safeguarded benefit. It would need an IFA to give advice on it. It would also need the SIPP provider to accept the liability (they won't).

Pun

dunstonh wrote: »

GMP is a safeguarded benefit. It would need an IFA to give advice on it. It would also need the SIPP provider to accept the liability (they won't).

Given that GMPs simply become part of the general transfer if a member transfers a deferred pension with a GMP directly from a DB scheme to a SIPP, why won't SIPP providers accept the transfer where DB benefits have been bought out? What's the crucial difference, please?

xylophone

https://www.thisismoney.co.uk/money/pensions/article-3680749/I-want-pension-freedom-trapped-section-32-buyout-plan.html

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

https://www.financialadvice.net/s32_buy_out_plan/zone/1288

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

All pension benefits increase in payment at 3% compound a year.

Is Aviva saying that when the pension comes into payment, it will pay increases at 3% even on pre 88 GMP?

xylophone

https://forums.moneysavingexpert.com/discussion/5196792/transfer-of-a-section-32-pension

This was being discussed four years ago - see post 7.