DB Pension Transfer

Worktopayifa

My pension situation at the moment :- Currently contributing through my employer to a Peoples Pension Scheme. From a previous employer a DB scheme which i last contributed to in 1998 ( 10 years of contributions ). I have received yearly statements/transfer values since leaving, and from this year " ealy retirement options" as I am now over 55. I have been to see an IFA with a view to transfer my DB pension into my Peoples Pension Scheme. The PPS offer to facilitate the transfer free of charge, also there are no charges involved from my DB pension.
But I have to seek advice from an IFA before the PPS will even consider this. I met yesterday an IFA who would introduce me to a specialist company who deal with final salary/DB schemes and to be fair the charges and fees where reasonable compared to some I had heard, these were £1500 for a report and recommendation and then if I chose to
continue with a transfer service it would be 1.7% of the C.E.T.V. again compared to some I thought reasonable - also if I continued the £1500 would be waivered so it would be just a charge of 1.7%.
So my question which seemed reasonable was could I pay for the report/recommendation as the PPS would transfer for free my old DB scheme, my personal situation I have no spouse or dependants or claims on my pension and as the pot is in excess of £250k all my calculations point to moving it to a live PPS which I still add to, PPS charge 0.5% pa.
I later received a call saying it would have to be the whole service of them handling the transfer obviously at the above costs ???
So the advice is pay thousands for a service I could get for free, bearing in mind they separated and broke down services and costs provided.
Does this seem logical and can I get this service from any companies out there ?

tacpot12

The IFA is providing you with services that you need but which you are not aware of. Specifically they are collecting details of your financial situation, assessing your attitude to risk, obtaining information from your existing scheme and packaging all this up for the analysis company. When the analysis is complete, they will also explain the result and provide a recommendation, including an initial proposal of how the money should be invested so as to achieve your aims, and most importantly they take out insurance in case their advice is faulty (which you have to pay for as part of the fee).

You didn't say what the cetv is so I can't really say whether the charge is reasonable.

xylophone

You must use a Pension Transfer Specialist.

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/pension-transfers-conversions/

https://adviserbook.co.uk/ When the menu comes up, tick "confirmed independent" and "pension transfer".

Why do you wish to transfer out of your DB pension? It is (at least in part) index linked?

Would it not provide a secure base for your retirement planning (together with your state pension), leaving you more freedom with your DC pension?

Have you obtained a state pension forecast?

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

Albermarle

Hopefully you are clear that this is a major financial decision , apart from any IFA charging queries. Maybe be worth a look at this .

https://www.royallondon.com/siteassets/site-docs/media-centre/good-with-your-money-guides/five-good-reasons-good-with-your-money-guide-2018-edition.pdf

Also suggest you check with The Peoples Pension that they will still accept the transfer even if the IFA recommends against transferring ( which is quite possible ) In theory you can still transfer a DB scheme even with a negative recommendation, but most mainstream pension providers will not accept the transfer ( due to worries over future litigation if you run out of money in 10 years time )

bigadaj

I think you need to work out your reason for transferring, or confirm it. We know you've been shown a big sum, certainly compared to what seems like a modest weekly or monthly amount, but what are your aims.

Are you looking to retire early, pay off a mortgage, car, holidays etc?

Would be worthwhile quoting your projected payment and the cetv for information.

It may be worth it to you to transfer but not to people's pension, if you do transfer then a better pension wrapper and management, presumably by an ifa if you are an inexperienced investor, would be the way to go.

Worktopayifa

Thanks for your reply to my post. I contacted The Peoples Pension to ensure they can facilitate a transfer of a DB scheme into their scheme, as stated on their website free of charge and I was assured that as long as I had taken/obtained the advice/guidance/report from an IFA then my transfer would be considered, I also contacted my old pension scheme trustees ( Mercer ) and they told me this is not an usual situation transferring DB to DC schemes and tranfers to the PPS where common.
I check my state pension forecasts via the link you mentioned along with my N.I. contributions.
Sounds like you know the benefits the flexible draw down schemes hold over the old DB schemes, which suit me rather than an annuity scheme.
So struggling with the inflexible approach from Fridays meeting - clearly separated the services cost wise, between the advice side then the transfer side, but wouldn't provide the advice/guidance/report only ??

Worktopayifa

Thanks for your reply, sorry i missed the c.e.t.v of, its not huge but £260k at the moment.
Thanks

dam01163

My cetv is 105k. I’ve spoken to only 3 IFAs and all 3 made excuses not to help me transfer my final salary to a Sip. The cetv has gone up 20k in 2 years. The times right. Is there any ifa out there that can help ? Or persons that can advise of any Ifa that will.

trickydicky802

xylophone wrote: »

You must use a Pension Transfer Specialist.

Yes - and it's a bl**dy scandal that you do! Just a licenced scam!

I know of someone diagnosed with cancer just before their planned retirement date. After initial treatment they are currently stable but ultimately incurable with a 5-year 50% survival forecast from their oncologist.

They had two good DB pension plans that would pay about £20k pa but also had combined transfer value of about £700k.

Yes, we all know that DB pensions are a 'good deal', guaranteed for life, etc, etc, but given the above circumstances what do you think would be the best financial advice? Stick with £20k pa or transfer £700k to a drawdown pension plan and live their final years in some style while they are still well enough?

Well, they chose the latter option but couldn't transfer out without taking advice from an IFA. After shopping around (some IFAs were not happy about advising them to transfer!) the best deal they could find took over three months and cost almost £20k in fees!

£20k for an IFA to 'advise' someone what to do with their own pension and how to live their own life!

Pah!

Aegis

trickydicky802 wrote: »

Yes - and it's a bl**dy scandal that you do! Just a licenced scam!

I know of someone diagnosed with cancer just before their planned retirement date. After initial treatment they are currently stable but ultimately incurable with a 5-year 50% survival forecast from their oncologist.

They had two good DB pension plans that would pay about £20k pa but also had combined transfer value of about £700k.

Yes, we all know that DB pensions are a 'good deal', guaranteed for life, etc, etc, but given the above circumstances what do you think would be the best financial advice? Stick with £20k pa or transfer £700k to a drawdown pension plan and live their final years in some style while they are still well enough?

Well, they chose the latter option but couldn't transfer out without taking advice from an IFA. After shopping around (some IFAs were not happy about advising them to transfer!) the best deal they could find took over three months and cost almost £20k in fees!

£20k for an IFA to 'advise' someone what to do with their own pension and how to live their own life!

Pah!

Taking 3 months is normal, and often down to the trustees being very slow to provide information in response to requests.


£20k fee, on the other hand, is taking the proverbial. We are based in central lond and use fixed fees for pension transfer work which come in under half of that level. It should only reach that point if you're talking multiple schemes or major complexities (e.g. problems with international residence / domicile that need to be explored and addressed on top of the existing complexities).

dam01163

I agree. The FCA have put frighteners on the pension transfer industry and you have to question whether that in itself was a fit and proper thing.

I wonder. Will the FCA compensate all the people wanting to transfer out but can’t because of this?