DB Transfer thoughts

Silvertabby

Marcon said:

savingholmes said:

I too am looking to transfer my pension.

I took your quoted CETV and divided it by what you would expect to get at 65 if you stayed in the scheme. It came out at 30 times ie you may be able to draw that amount of money plus an element of inflation for 30 years without running out allowing for some market fluctuations using a flexible drawdown option. By comparison I was turned down on a 40 multiple by a provider - and have recently received an updated multiple of 45 times that I am in the process of getting advice on. 30 x is not that generous. The reason it matters is that the Trinity Study at Oxford reckoned a safe withdrawal rate would be 4% ie you need 25 times your desired annual income to be able to retire and not run out of money. However some economists reckon with COVID a safer withdrawal rate might be closer to 3 or 3.5% - which would mean you need a multiple of 33 times or more to not run out of money. I am not an IFA so this is just what I've picked up from the F1RE movement.

Macron - I haven't found any provider willing to take insistent clients in practice...

Being an insistent client is of no consequence because the law requires the stakeholder provider to take the transfer - that legal requirement is all the defence they will need. One or two don't seem to know this, but pointing them towards Section 1 of the Welfare Reform and Pensions Act 1999 should resolve the issue. 

If you're still struggling, try the Prudential, who certainly understand this: https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/transfer-pension-scheme/ (scroll down to the penultimate paragraph under the section headed 'Types of Transfer').

Transferring out of a stakeholder to another arrangement of your choice (SIPP or whatever) will not need advice, because it is DC to DC. The original source of funds contributed to the stakeholder isn't relevant.

Reminds me of a LGPS case some time ago (pre pension 'freedoms').  The CETV was a substantial £300K and the member wanted to transfer to a hardwood plantation scheme in South America. 

 The more we explained we couldn't do that, as the 'scheme' wasn't on the HMRC QROPS list of authorised schemes, the more they screamed that we were 'robbing them' of the promised/guaranteed mega% increase to their benefits.

That ended (as far as the LGPS was concerned) with a transfer to a stakeholder, with the member saying that they were going to transfer it out from there to the plantation scheme as soon as they could - and moaning about the £Ks they had 'lost' because of our refusal to transfer direct.

I would love to know how that ended.

dunstonh

Being an insistent client is of no consequence because the law requires the stakeholder provider to take the transfer - that legal requirement is all the defence they will need. One or two don't seem to know this, but pointing them towards Section 1 of the Welfare Reform and Pensions Act 1999 should resolve the issue. 

However, the few stakeholder pensions that are left are usually arranged via an intermediary.  There are not many left available direct to public.   So, you may find the intermediary will block the transfer into a stakeholder.  it needs to a non-intermeidary arranged stakeholder.