Thoughts on small FS pension pot?

xylophone

As you are now two years above NRA it may be worth checking whether this rule applies to your scheme.

It seems that the OP has obtained a CETV - I wonder was he approached by the scheme and offered a transfer at the discretion of the Trustees?

The transfer value is circa 59K.

DairyQueen

xylophone wrote: »

It seems that the OP has obtained a CETV - I wonder was he approached by the scheme and offered a transfer at the discretion of the Trustees?

Yes, indeed possible that the scheme is so keen to rid itself of its liabilities that it is offering transfers regardless of 'common rules'. Thought I should mention in case the administrators are nonspecific in their correspondence. Not the first time a CETV has been offered to someone not eligible (!).

Skinnydad

Yes Xylophone, the scheme was keen to offload it's liabilities that they provided free financial advice (a one off) that was before my 60th birthday. The IFA I spoke to took into account all my/our current arrangements etc. and stated as I was not desperate for the money to leave it in the scheme as it would increase by 7% after my 60th birthday.

Skinnydad

Yes Dairyqueen the transfer may be difficult as I've not asked my current SIP provider whether or not they allow a transfer of a DB scheme. The best option may be to take the lump sum and piddly pension..

Thanks

Skinnydad

The LHW99..my Wifes SIPP dwarfs mine by more the 300K so she doesn't need this income. I was just seeing what was out there any thanks to everyone that's given me impartial advice..

Skinnydad

Thanks Xylophone I’ll try to answer your questions, bear in mind I don’t recall receiving a statement when I left. Mind you that was 23 years ago..

For every whole year I defer drawing benefits the GMP is increased by a late retirement factor of 7%

I’m not too sure I understand your Post 88 pension on my retirement pack it states:

Deferred Pension: Post 5 April 1988 GMP £50.96

Contracting out: Post 5 April 1988 GMP revalued to GMP Payable age £218.40 PA

It states Before 65
Pension accrued pre 6 April 1997 rate in increase 3%
Pension accrued 6 April 1997 – 31 Dec 2001 RPI Min 3% Max 5%
Pension accrued Post 31 Dec 2001 in line with increase in RPI subject to a Max of 5%

After 65:
Pension accrued pre 6 April 1997 rate in increase 3% fixed
Post 5 April 1988 GMP 3% fixed
Excess Pension accrued 6 April 1997 – 3%
Excess Pension accrued 6 April 1997 – 31 Dec 2001 RPI Increase in line with RPI Min 3% Max 5%
Excess Pension accrued Post 31 Dec 2001 in line with increase in RPI subject to a Max of 5%

Not sure if any of this helps? Thanks SD

Albermarle

the transfer may be difficult as I've not asked my current SIP provider whether or not they allow a transfer of a DB scheme.

Most ( all?) SIPPS are happy to receive a DB transfer if the IFA has given a positive recommendation.
If you get a negative recommendation again but still want to transfer , then most mainstream SIPP's will not accept it.

xylophone

For every whole year I defer drawing benefits the GMP is increased by a late retirement factor of 7%

GMP age for a male is age 65 and for a female 60.


With regard to the question of why pre 88 and post 88 GMP is relevant, once a pension comes into payment, a scheme has no obligation to pay increases on pre 88 GMP - it must however pay increases on post 88 GMP up to 3% CPI.

The "late retirement factor" for GMP after GMP age is 1/7%.

However, if your scheme revalues GMP in deferment (up to GMP age) at "fixed rate", then for a person leaving between 6 April 1993 and 6 April 1997, the rate would be 7%.

Some pension schemes also pay "late retirement increases" on the whole or part of a pension where a pension is deferred beyond normal scheme pension age.

With regard to your statement above

Deferred Pension: Post 5 April 1988 GMP £50.96

Contracting out: Post 5 April 1988 GMP revalued to GMP Payable age £218.40 PA

Did you leave pre 6 April 1997?

If so, as far as I can see from what is said above, if you draw the pension pre age 65, the whole of the pension in payment will increase at a fixed 3% and the same seems to apply after age 65.

This is presumably particular to your scheme rules - in other schemes, you could (for just one example) find the whole of the pension increased by RPI up to GMP age but after that no increase on pre 88 GMP, increase up to 3% CPI on post 88 GMP, excess by RPI.

You should check my understanding with your scheme administrator - I am no expert.

xylophone

I've not asked my current SIP provider whether or not they allow a transfer of a DB scheme.

The provider may or may not accept a transfer.

Some providers will accept a DB transfer only if there is a positive recommendation from the Pension Transfer Specialist.

In such a case, if a person had a negative from the PTS but particularly wanted to transfer into the SIPP with the current provider, he would have to transfer elsewhere first and then on to the current provider.

If you want to transfer out, you will need the advice of a Pension Transfer Specialist and whether or not the advice is positive, you will have to pay the fee for his advice.

You could find firms with the necessary permissions and ring round to check on their fees.

You would need the firm to state that whether or not the advice was positive, they would still provide you/ the ceding/accepting scheme in the form acceptable to these bodies confirmation that you had taken the appropriate advice.

https://adviserbook.co.uk/

You would tick "confirmed independent" and "pension transfer" when the menu came up.

Skinnydad

Thanks to all who has provided advice.. thanks again..