2 Pensions

Headsinaspin

I have a very simply question I am 55 no longer working and have 2 pensions one worth £125k and one £199k one is a personal pension and one a company pension.  Can I transfer the company pension into my personal pension and then draw a tax free lump sum of 25% of the whole sum giving me around £80k.  I dont want to draw a monthly pension at the moment can I do this 
Many thanks

Dazed_and_C0nfused

Is the company scheme a defined benefit one?

If so where did the value for that one come from?

Albermarle

It depends on what type your company pension is.
Is it a DC scheme , where there is just a pot of money, like with your personal pension. If it is, does it have any special guarantees attached to it ?
Or is it a DB/final salary type scheme , where there is a guaranteed income from a certain age ?

Headsinaspin

Albermarle they have offered me a lump sum on the company pension and a monthly income if that helps I left the company over 25 years ago and have made no contribution since then.  I have asked to cash the whole pension of £199k and pay the tax which I have now decided not to do I have spoken with their pension adviser who is deciding which course of action is best for me this has taken 7 weeks and I still have no decision from them he said to me if he thinks cashing the pension in is the best course of action for me the pension will be transferred to my personal pension.  My reason for cashing the pension was I dont own a property and live in private rented accommodation and I wanted to buy my own property for my security.  I would then have lived off my personal pension and army pension

xylophone

 I still cannot get to grips with what kind of pension we are discussing.

they have offered me a lump sum on the company pension and a monthly income if that helps

which would seem to indicate a DB arrangement.

I have spoken with their pension adviser who is deciding which course of action is best for me this has taken 7 weeks and I still have no decision from them he said to me if he thinks cashing the pension in is the best course of action for me the pension will be transferred to my personal pension.  My reason for cashing the pension was I dont own a property and live in private rented accommodation and I wanted to buy my own property for my security.  I would then have lived off my personal pension and army pension

If this is a DB pension then a very specific course of action needs to be followed before a transfer to a DC Scheme can take place - and it doesn't sound as though that is happening here.
Therefore this may be some form of DC arrangement.

Do you still have the scheme booklet? When you left the company, were you given a statement of deferred benefits?
Are you currently drawing your armed forces pension?

Have you obtained a State Pension Forecast?
https://www.gov.uk/check-state-pension
What does it say?

Headsinaspin

No I cannot draw my Army Pension until I am 60 looking at the recent paperwork I have its a DB pension and yes I have obtained a State pension forecast and the pension company gave me a pension adviser who spent over 2 hours going through things with me and said it would take 6/8 weeks to come to a decision on whether I could transfer the pension into my private pension

Albermarle

OK then what is happening , is that currently the pension in question means you have a guaranteed income from when you take it, to when you die . You have also been offered the alternative of a tax free lump sum with a reduced pension.  Normally the pension increases with inflation ( very important benefit) . This lifetime  guarantee is very expensive for the company, so they are offering to buy you out with a CETV ( cash equivalent transfer value ) so they can rid themselves of the long term liability . Normally it is not a good idea to take the CETV ( although sometimes it can be ) and there have been many horror stories of people taking and investing it in poor products and losing a large part of it. So the government now insists that detailed financial advice is taken before any transfer takes place. Usually ( not always) the IFA recommends not to transfer.
If you do transfer it to another DC pension , yes you can take 25% tax free ( like you effectively already can with the DB scheme) and the remaining 75% can be invested /taken as taxable income when you wish.

xylophone

Very well then, you have a deferred defined benefits pension with benefits valued in excess of £30,000 - this means that before you can transfer to a DC arrangement (like your personal pension), you must by law take the advice of a Pension Transfer Specialist.

Did you approach the Scheme and ask for a CETV?

Or did the Scheme approach you and offer the services of a PTS paid for by the Scheme?

Headsinaspin

I approached them and the offered a paid for by the scheme PTS