Pension Advice needed - National Grid Defined Benefit Scheme

RoadToRiches

Been informed that I will no longer be able to contribute to this scheme from next year.

So now I have a number of options open to me and considering taking a Transfer Value and putting it into a Interactive Investor account and attempting to grow the pot myself, but find I need a financial advisor in order to do this.  I also have another DB scheme I'd be looking to bring into ii at the same time.  What costs would be involved in just doing a execution only service to sign off the transfer to get the funds out of the NG DB pension scheme next March and into ii.

My other option is to have a deferred pension, but this pension would not provide me enough in retirement so need to grow the pot and hear the CETV can be quite substantial for 20/60th final salary pension, it's not ideal and would have been OK if it ran for another 10 years but my company has more or less pulled the plug too early on me.

dunstonh

 What costs would be involved in just doing a execution only service to sign off the transfer to get the funds out of the NG DB pension scheme next March and into ii.

You cannot do execution only on DB pension transfers.

The advice process would cost around £5,000 per scheme.

My other option is to have a deferred pension, but this pension would not provide me enough in retirement so need to grow the pot and hear the CETV can be quite substantial for 20/60th final salary pension, it's not ideal and would have been OK if it ran for another 10 years but my company has more or less pulled the plug too early on me.

So, you want to transfer a pension despite not knowing what the CETV is?

RoadToRiches

dunstonh said:

u want to transfer a pension despite not knowing what the CETV is?

No I need to know this obviously, but I would also like to know my options and costs involved. £5k per scheme does however seem a little excessive. 

dunstonh

RoadToRiches said:

dunstonh said:

u want to transfer a pension despite not knowing what the CETV is?

No I need to know this obviously, but I would also like to know my options and costs involved. £5k per scheme does however seem a little excessive. 

It is not excessive if you understood what you were doing and the risks involved to those you bring into the process.  There are plenty of threads on that why it's not already though so no point repeating what would be an FAQ.

HappyHarry

RoadToRiches said:

dunstonh said:

u want to transfer a pension despite not knowing what the CETV is?

No I need to know this obviously, but I would also like to know my options and costs involved. £5k per scheme does however seem a little excessive. 

If the transfer value is under £30,000 then you can arrange it yourself.

If the transfer value is over £30,000 then you must take advice from a regulated adviser with specialist pension transfer qualifications and authorisations. They are not many of them.

The adviser will forever be accountable for their advice. The regulator states that the starting position for all DB transfers is that a DB pension transfer will be unsuitable for the majority of people. 

The adviser will will need to overcome this position, and show how and why they have come to their conclusion. Should you complain the advice was wrong at any time in the future, and the ombudsman find for you and against the adviser, then the adviser will have to pay a significant amount of compensation.

There have recently been some high profile cases where the advice to transfer was found to be poor, and people have lost huge amounts of money due to this poor advice. The regulator is now cracking down heavily on DB transfer advice, and has removed transfer permissions from hundreds of qualified specialists.

For those specialist advisers left in this business, which is now a smaller but hopefully higher quality pool, both the specialist adviser's PI insurers as well as the specialist advisers themselves are very nervous about the possibility of future complaints about their transfer advice.

£5,000 is not a high fee to pay, given those circumstances, if, indeed, you can find a specialist adviser willing to act for you.

Dox

RoadToRiches said:

My other option is to have a deferred pension, but this pension would not provide me enough in retirement so need to grow the pot and hear the CETV can be quite substantial for 20/60th final salary pension, it's not ideal and would have been OK if it ran for another 10 years but my company has more or less pulled the plug too early on me.

If your guaranteed income from a DB scheme isn't enough to provide for your retirement, what happens when you find your attempts to 'grow the pot' fail hopelessly and you don't have sufficient time to save more to make up the shortfall?

Joey_Soap

There's not enough information here, but the sensible approach to this situation - I suggest - Would be to thank your lucky stars you have some gold plated final salary benefits entitlement which will grow at CPI (or RPI if you're lucky) at no risk to you and will provide an inflation adjusted income to you until you expire no matter what happens to the market or the economy. Even then,  a spouse will continue to benefit. Then, setting that fortuitous situation to one side for now, think about building a defined benefit pension pot to provide the remaining income for you when you retire. If you are realistic and wish to have a comfortable, perhaps early, retirement you may be surprised at the amount you need to save into such a scheme. Hope that helps despite not being what you want to hear.

AnotherJoe

OP,  I'm missing your logic here.

You were (are) on a DB scheme.You were it seems, content to stay on that scheme and draw your DB pension when you retired.

That DB scheme is now ending, will remain to collect when you retire  and you will be moved, presumably into a DC pension going forward.

Yet, instead of being content to take whatever the DB scheme will pay out, and topped up with the DC scheme, you've decided the DB scheme you are in is no good and shoudl be transferred to a DC. 

Why?

Joey_Soap

AnotherJoe said:

OP,  I'm missing your logic here.

You were (are) on a DB scheme.You were it seems, content to stay on that scheme and draw your DB pension when you retired.

That DB scheme is now ending, will remain to collect when you retire  and you will be moved, presumably into a DC pension going forward.

Yet, instead of being content to take whatever the DB scheme will pay out, and topped up with the DC scheme, you've decided the DB scheme you are in is no good and shoudl be transferred to a DC. 

Why?

Exactly. That's another way of saying what I just said in the previous post.

RoadToRiches

You could look at it another way, what if I believed the scheme is going the way of BHS or life expectancy may not be as long or I have no spouce to pass the pension onto and a potential payout now from what I'm hearing/reading about online of 40x my annual pension.  Now do you see why I am considering this option depending on the Cash Value.

p00hsticks

RoadToRiches said:

You could look at it another way, what if I believed the scheme is going the way of BHS or life expectancy may not be as long or I have no spouce to pass the pension onto and a potential payout now from what I'm hearing/reading about online of 40x my annual pension.  Now do you see why I am considering this option depending on the Cash Value.

If the scheme went the way of BHS the Pension Protection fund would pay out 90% of the benefit.

Do you actually have limited life expectancy ?

How would you feel if that 40x value dropped to 30x overnight when the stock markets crashed ?