Wife's old company pension

lesta1980

I don't fully understand this so hopefully can explain it correctly and get the correct advice.
Basically my wife has been offered an enhanced transfer offer from her old company pension scheme

It says the current value is £52k and they'll add £3700 if she transfers out.
She has a company pension with her current employer but I have no idea about that and I lumped about £60k in a private pension for her a couple of years back. Don't know if any of that counts or is important but what would be the standard way to go? if there is one, shes 41

xylophone

Basically my wife has been offered an enhanced transfer offer from her old company pension scheme

Cui bono?

Is your wife a deferred member of a Defined Benefit Pension Scheme?

See https://www.moneyadviceservice.org.uk/en/articles/transferring-out-of-a-defined-benefit-pension-scheme

Is her current occupational pension a DB Scheme?

Be aware that if she wishes to transfer out of a DB pension with benefits in excess of £30,000 into a Defined Contribution/Money Purchase Scheme she will be required to take ( and pay for) the advice of a pension transfer specialist which will not be cheap.

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

lesta1980

I have no idea to be honest, the stuff she's been sent doesn't really make it clear, plus I just thought a pension was a pension.

why would a company offer this? reduce the fees?

Albermarle

I just thought a pension was a pension.

You need to at least find out if she has a Defined Benefit/Final salary scheme or a Direct Contribution scheme . Until this is clear no sensible advice can be offered.

Check these links for more info .
https://www.moneysavingexpert.com/pensions/
https://www.pensionsadvisoryservice.org.uk/

lesta1980

it was final salary she has just told me, her current one is a normal contribution one

JoeCrystal

lesta1980 wrote: »

I have no idea to be honest, the stuff she's been sent doesn't really make it clear, plus I just thought a pension was a pension.

why would a company offer this? reduce the fees?

It is more of a matter offloading the liability of paying your wife until she dies and possible spousal and children's pension, which may cost more than the transfer value itself.

What is the expected pension from which age?

xylophone

As I said above,

Cui bono? Your wife's? Or the scheme's (which by permitting a transfer out relieves itself of any responsibility with regard to revaluing in deferment/index linking in payment/providing spouse/child pensions ...)

Does your wife have a copy of her deferred scheme booklet?

lesta1980

well you've said cui bono twice now so guess that means something??

Preacher64

lesta1980 wrote: »

well you've said cui bono twice now so guess that means something??

Basically who benefits most from the transfer. Your wife or the company. It will almost certainly be the company as they potentially absolve themselves of a significant liability if the pension is in payment for a number of years.

As previously mentioned, transferring out of a Defined Benefit (Final Salary) pension which has a value of more than £30,000 would require professional advice which, for the value of your wife’s pension, is likely to be disproportionately expensive. Would the company be paying for this advice?

In most cases, it is better to leave a DB pension where it is.

FatherAbraham

lesta1980 wrote: »

well you've said cui bono twice now so guess that means something??

https://en.m.wikipedia.org/wiki/Cui_bono

lesta1980

Preacher64 wrote: »

Basically who benefits most from the transfer. Your wife or the company. It will almost certainly be the company as they potentially absolve themselves of a significant liability if the pension is in payment for a number of years.

As previously mentioned, transferring out of a Defined Benefit (Final Salary) pension which has a value of more than £30,000 would require professional advice which, for the value of your wife’s pension, is likely to be disproportionately expensive. Would the company be paying for this advice?

In most cases, it is better to leave a DB pension where it is.

thank you, it does say they are offering free advice which she'll be ringing tomorrow