DB Pension CETV
Comments
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I had a quote in October and one in April. April one was up 5% but could be because I’m older as well as gilt prices - but it can go down too. It’s up to the actuaries1
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Guidance given at the end of March 2020 to pension scheme trustees from the regulator.
Transfer values
Trustees should give greater attention to the heightened risk of members being targeted by scammers and unscrupulous financial advisers.
Volatility in financial markets and the deterioration in funding levels that many schemes have experienced over recent weeks may mean trustees will want to review the terms they are offering for cash equivalent transfer values (CETVs). Additionally, some schemes may have seen or may see a significant increase in demand for CETV quotations. This will place additional strain on schemes’ administrative functions. For some schemes, this additional strain will be detrimental to the membership as other administrative functions such as pension payroll and retirement quotations will be impacted.
In order to review CETV terms and/or to assess the administrative impact of any increase in demand for CETV quotes, trustees may decide to suspend CETV quotations and payments for up to three months.
This may mean breaching the disclosure requirements associated with the CETV process. We cannot waive the requirement for trustees to report either of the above actions to us but we won’t take regulatory action against trustees over the next three months in relation to this. The Pensions Ombudsman will take TPR’s guidance, and the impact of the coronavirus generally, into account when determining whether trustees took reasonable action.
If, at the end of the three-month period, trustees feel it is still in the best interests of their members to continue with the CETV suspension or delayed quotation, they should notify us in the usual way. Trustees should, however, be clear about their reasons for the continued suspension or delayed quotation. These reasons may include continuing significant financial market uncertainty (leading to uncertainty over the appropriate CETV terms to apply), lack of liquidity or administrative constraints.
Trustees may also wish to review the terms they offer for other benefit options such as cash commutation at retirement and early retirement terms. Terms for these options will be much more specific to individual schemes, determined by scheme rules.
Trustees will need to determine how to communicate their approach to members and how to deal with requests for quotes and payments that are currently being processed. However, some trustees will feel able to continue to provide CETVs as normal, particularly if they have not seen any material deterioration in funding and/or covenant.
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Roborovski said:I received a CETV for a DB pension at the end of February, before the impact of covid-19 fully hit the markets. Would I be likely to receive a higher CETV if I requested another quote now?
No saying whether the quote would be higher or lower.1 -
I am asking for Professional advise/information as to my rights, or indeed to consult with recommended Pensions lawyer.
The following is very condensed take of the whole episode.
I had a company DB pension which I opted to cash in and transfer into a Retirement account. I applied for a CETV and received the Quotation, which i was very happy with and proceeded to accept the quotation and for it to be transferred into a retirement account. After approximately 8 weeks I received letter stating there had been an error in the calculating the CETV which resulted in the CETV being approximately £50,000 less.0 -
John.h_4 said:I am asking for Professional advise/information as to my rights, or indeed to consult with recommended Pensions lawyer.
The following is very condensed take of the whole episode.
I had a company DB pension which I opted to cash in and transfer into a Retirement account. I applied for a CETV and received the Quotation, which i was very happy with and proceeded to accept the quotation and for it to be transferred into a retirement account. After approximately 8 weeks I received letter stating there had been an error in the calculating the CETV which resulted in the CETV being approximately £50,000 less.1 -
John.h_4 said:I am asking for Professional advise/information as to my rights, or indeed to consult with recommended Pensions lawyer.
The following is very condensed take of the whole episode.
I had a company DB pension which I opted to cash in and transfer into a Retirement account. I applied for a CETV and received the Quotation, which i was very happy with and proceeded to accept the quotation and for it to be transferred into a retirement account. After approximately 8 weeks I received letter stating there had been an error in the calculating the CETV which resulted in the CETV being approximately £50,000 less.0 -
John.h_4 said:I am asking for Professional advise/information as to my rights, or indeed to consult with recommended Pensions lawyer.
The following is very condensed take of the whole episode.
I had a company DB pension which I opted to cash in and transfer into a Retirement account. I applied for a CETV and received the Quotation, which i was very happy with and proceeded to accept the quotation and for it to be transferred into a retirement account. After approximately 8 weeks I received letter stating there had been an error in the calculating the CETV which resulted in the CETV being approximately £50,000 less.
However offering CETV's ; early retirement options , tax free lump sum offers are at the discretion of the trustees .
By reducing the CETV they have not removed any of your basic pension rights , although no doubt wasted some of your time and maybe some costs . Might be more fruitful to try and negotiate some compensation than going down a legal route , as I am not sure you have a case..
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Albermarle said:John.h_4 said:I am asking for Professional advise/information as to my rights, or indeed to consult with recommended Pensions lawyer.
The following is very condensed take of the whole episode.
I had a company DB pension which I opted to cash in and transfer into a Retirement account. I applied for a CETV and received the Quotation, which i was very happy with and proceeded to accept the quotation and for it to be transferred into a retirement account. After approximately 8 weeks I received letter stating there had been an error in the calculating the CETV which resulted in the CETV being approximately £50,000 less.
However offering CETV's ; early retirement options , tax free lump sum offers are at the discretion of the trustees .
By reducing the CETV they have not removed any of your basic pension rights , although no doubt wasted some of your time and maybe some costs . Might be more fruitful to try and negotiate some compensation than going down a legal route , as I am not sure you have a case..1 -
John.h_4 said:I am asking for Professional advise/information as to my rights, or indeed to consult with recommended Pensions lawyer.
The following is very condensed take of the whole episode.
I had a company DB pension which I opted to cash in and transfer into a Retirement account. I applied for a CETV and received the Quotation, which i was very happy with and proceeded to accept the quotation and for it to be transferred into a retirement account. After approximately 8 weeks I received letter stating there had been an error in the calculating the CETV which resulted in the CETV being approximately £50,000 less.Personally I would make a formal complaint and point out that if they're admitting they made a £50,000 mistake the first time, they could have made a £50,000 mistake the second time.The expected outcome would be a few hundred quid for distress and inconvenience, and being secure in the knowledge that the error was in fact with the first quotation and not the second. Errors are not legally binding.There is absolutely no point in paying for a lawyer on the basis of the information you've given.1
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