Pension Transfer Value refused!

Linton

L9XSS said:

The pensions freedom act brought in by Chancellor George Osbourne in my opinion didn’t really work for DB pensions. A number of “hoops” to jump through, potentially exorbitant fees. The FCA is I need a mess regarding regulation of DB pensions. In our “ambulance chasing culture” I can understand why firms are worried about giving advice on DB pensions transfers. Maybe the pension reforms introduced should have been for DC pensions only.

As Silvertabby says the pension freedoms legislation only applied to DC schemes.  However the ability to transfer from DB schemes to a DC scheme already existed, it's just that it was rarely used since in most cases it would have been a very stupid thing to do and restrictions on drawdown were such that you could not take large withdrawals unless you had other pension provision of at least £12K.

However using the DC pension freedoms many DB pensions could easily be turned into £££££  From what I remember the implication for DB schemes was only appreciated later in the legislation process and so the government had to rush through some sticking-plaster rules to control the situation.

L9XSS

Quotes to review the potential to transfer from 3 seperate IFAs were 3k, 4k and 5k respectively. Food for thought...........

AnotherJoe

L9XSS said:

The CETV value is usually “live” for 3 months. If DB transfer work is on hold then surely the CETV figure should be extended? As with most individuals I can access a CETV once a year. Another request after this “on hold period” would cost (in my case £150).

The CETV value is dependent upon financial markets  so in the carrent volatile situation it would seem foolhardy in the extreme to extend it longer than three months,  indeed if they did so then to be prudent and fair to the other members they would most likely provide a lower valuation that otherwise.  

Sandtree

AnotherJoe said:

The CETV value is dependent upon financial markets  so in the carrent volatile situation it would seem foolhardy in the extreme to extend it longer than three months,  indeed if they did so then to be prudent and fair to the other members they would most likely provide a lower valuation that otherwise.  

On the insurer side, I have known some to reduce the settlement value by the amount it would cost to take a hedge out on the market position and so in theory a longer window could be given (from the outset) but would have the higher hedge cost. I understand pension scheme rules are less stringent than insurer rules on deferred annuities and so certainly a similar option would be available to them (this coming from too many weeks locked in a room with actuaries with both pensions and annuities experience)