Transfer Defined Benefit Pension & the great suitability report ripoff

Silvertabby

Joey_Soap said:

Myself, I am very happy to see the system is working quite well to protect people from their own mistakes. It is quite correct that the presumption in DB to DC transfers should be that it's a bad idea in all but exceptional circumstances. Without this safeguarding, we'll see the same people ranting about how the industry robbed them of their final salary pension benefits in a few years time.

Give it another 5 years or so, and we'll start seeing the complaints from those who transferred out of their DB schemes because they were blinded by all the numbers in their CETVs.

"But I only took out enough to live on, plus a bit extra for daughter's wedding/new car/new kitchen/family holiday.  No-one told me that I could run out of money"

Think I'm joking about the wedding etc?  No, based on what LGPS members told me when I asked why they wanted to transfer out.  Many of whom expected 'their' money to be just transferred into their current accounts.

MarkCarnage

ZingPowZing said:

NottinghamKnight said:

The money is yours at the end of the day, you signed up to a scheme that agreed to pay you an agreed sum at a future date. Many years later legislation was enacted that gave the possibility that the income could be exchanged for a lump sum, however to do this there had to be an independent report.. 

There, fixed that for you.

Strong turnout from the Financial Adviser Apologist team though.

Wrong on so many levels. The money isn't yours. The fund backing the promised payment stream to you is held in trust. There is no 'agreed sum at a future date'. There is a defined benefit payable regularly until you die. So a series of payments, which will increase with inflation to an extent defined, at regular future dates for an indeterminate period. 
Even when the legislation you refer to was enacted, it permits the transfer of a capital sum to another pension provider. When you exercise the rights to access that, it becomes yours. 
Strong turnout from those who state facts. You are clearly still sore about your dispute with HL, despite the finding against you. There is no point in railing against IFAs for not providing a service which is both costly and risky for them, at a price which you aren't prepared to pay. The reason that is the situation is two fold:
- A significant proportion of those seeking to transfer who, bluntly, need to be protected from themselves
- A small minority of advisers whose conduct ranges from questionable to downright criminal.
For the record, I worked in financial services all my career, mainly in advising and managing institutional pension funds, and have never been an IFA. I executed two DB pension transfers 4 years ago and was entirely happy with the IFA providing the advice. We both knew that I was capable of writing the report myself, perhaps with some slightly different interpretations, and we both knew that there was a very strong argument supporting my transfers, even if the bald prescribed numbers might not say so. I paid a not insignificant amount for this, certainly not 'hundreds of pounds'. Worked out at about 1.5% of the combined transfer values (would have been cheaper if it had been just one transfer). Paid separate advice fee for Lifetime Allowance planning - that was in the hundreds of pounds and good value. One of the reasons they charged a bit less then for transfers going into their own managed service was that it was deemed lower risk (by the FCA) as they knew the full outcome unlike me transferring them to a self managed SIPP. 

NottinghamKnight

ZingPowZing said:

NottinghamKnight said:

The money is yours at the end of the day, you signed up to a scheme that agreed to pay you an agreed sum at a future date. Many years later legislation was enacted that gave the possibility that the income could be exchanged for a lump sum, however to do this there had to be an independent report.. 

There, fixed that for you.

Strong turnout from the Financial Adviser Apologist team though.

No, you've just broken it. I'm no apologist for FAs of any type, but am ambivalent and don't have an agenda against them. I don't understand why you didn't become one if you think it is so good and lucrative, but then you didn't seem to understand what you had signed up to when you tried to transfer so better that you didn't I suppose,

xylophone

Its MY money and you are NOT going to tell me if I can or can't do this , that or the other. I

This is a Defined Benefit Scheme and it is not your money.

https://www.lexology.com/library/detail.aspx?g=b327f7e0-9da7-4b22-aa27-a7c42613d1a9

The  Scheme Trustees/actuary have calculated the cost of providing your benefits  and are prepared to permit a transfer out  (to another pension scheme) of a sum representing this value, provided that they have confirmation (in the form required by the Trustees) that advice has been obtained from a properly qualified person with the necessary permissions as specified by regulations.

You may already have read the links below - if not they are worth reading - note the paragraph in the second link concerning the willingness to accept transfers in the absence of a positive recommendation.

You would need to check how matters stand with the scheme you would like to take the transfer - anecdotal evidence suggests that many refuse although AJ Bell has been mentioned in other posts as one that doesn't.

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/pension-transfers-conversions/

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/transfer-pension-scheme/

All the foot stamping and ranting in the world will not get round the advice requirement nor change the fact that the value of your benefits in the scheme is not currently your money of which you may dispose at will.

If you wish to transfer out, you must find a PTS who is willing to take your case and willing to provide the necessary confirmation that the advice has been  provided whether or not that advice is positive in respect of the transfer.

https://adviserbook.co.uk/ may be worth a look - you would tick "confirmed independent" and "pension transfer" when the menu comes up.

MallyGirl

ZingPowZing said:

NottinghamKnight said:

The money is yours at the end of the day, you signed up to a scheme that agreed to pay you an agreed sum at a future date. Many years later legislation was enacted that gave the possibility that the income could be exchanged for a lump sum, however to do this there had to be an independent report.. 

There, fixed that for you.

Strong turnout from the Financial Adviser Apologist team though.

Please do not alter the text when quoting someone like that. It is not what the poster said and should not be attributed to them as such.

[Deleted User]

NottinghamKnight said:

The money isn't yours at the end of the day, you signed up to a scheme that agreed to pay you an agreed sum at a future date, nothing in that regard has changed. Many years later legislation was enacted that gave the possibility that the income could be exchanged for a lump sum, however to do this there had to be an independent report to demonstrate that this would be in your interest.

Apologies, MallyGirl. Above is what was posted. It is wrong in fact.

Is everyone of eligible age entitled to a CETV? Certainly. 
Is  everyone with a CETV then entitled to a suitability report? I should hope so.
Is anyone who buys a suitability report then entitled to transfer his DB pension? Yes, regardless of whose interest the report purports to serve.

To say that it is not the clients money "at the end of the day" speaks of a certain resistance and resentment in the industry that "ordinary" now have this agency. But it is law.

AlanP_2

ZingPowZing said:

NottinghamKnight said:

The money isn't yours at the end of the day, you signed up to a scheme that agreed to pay you an agreed sum at a future date, nothing in that regard has changed. Many years later legislation was enacted that gave the possibility that the income could be exchanged for a lump sum, however to do this there had to be an independent report to demonstrate that this would be in your interest.

Is everyone of eligible age is entitled to a CETV? Certainly. 
Is  everyone with a CETV then entitled to a suitability report? I should hope so.
Is anyone who buys a suitability report then entitled to transfer his DB pension? Yes, regardless of whose interest the report serves.

To say that it is not the clients money "at the end of the day" speaks of a certain resistance and resentment in the industry that "ordinary" now have this agency. But it is law.

The money in a DB pension fund is not "yours".

If you satisfy the schemes requirements and the regulatory requirements (probably the same) you can transfer the agreed value to a DC scheme, and then it is "yours".

Simples! 

NottinghamKnight

ZingPowZing said:

NottinghamKnight said:

The money isn't yours at the end of the day, you signed up to a scheme that agreed to pay you an agreed sum at a future date, nothing in that regard has changed. Many years later legislation was enacted that gave the possibility that the income could be exchanged for a lump sum, however to do this there had to be an independent report to demonstrate that this would be in your interest.

Apologies, MallyGirl. Above is what was posted. It is wrong in fact.

Is everyone of eligible age entitled to a CETV? Certainly. 
Is  everyone with a CETV then entitled to a suitability report? I should hope so.
Is anyone who buys a suitability report then entitled to transfer his DB pension? Yes, regardless of whose interest the report purports to serve.

To say that it is not the clients money "at the end of the day" speaks of a certain resistance and resentment in the industry that "ordinary" now have this agency. But it is law.

Please stop posting misleading information. Not everyone of relevant age is entitled to a cetv, not even those that have a defined benefits pension. Why is someone 'entitled' to a suitability report, that is a business decision to be made by those who can produce such a document, and they can determine the cost of that service (more accurately their PI insurers in most cases). No one is entitled to transfer their pension, that is dependent on the nature of the report and the requirements of the receiving scheme. It is generally poor advice to recommend a transfer in most cases as you couldn't buy the level of income with the cetv, whether you could generate more money by moving up the risk scale is a very different thing.
I'm not sure why you make reference to the industry, I have never worked in financial services but do take time to do some research and enquire as to what a situation might be, have a numerical background and am able to assess risk. The 'pot' isn't the clients money, the guarantee of a future income is.  I don't understand what is meant by 'ordinary' in your sentence but given the rest of the post makes little sense, and is wrong and misleading I guess that is a minor detail.

RoadToRiches

Natalius said:

 I know legislation has changed but my colleague had this report done for himself with a transfer value of £550,000 last October for £450.00  Yes I am using that as a yardstick

I am in the same boat, I've been quoted £5k plus a percentage of the valuation to do a 75K transfer.  That is a rip off and just a way to stop us getting at our pensions that we paid into. I'm also expecting a valuation next year for another scheme I suspect that value will be closer to the half million mark but someone somewhere is going to try and put the blockers on it.  Even though I know almost definitely that I will never get anywhere near that through lifetime income from 60 onwards.

Let me know if you find anyone approving with fees in the hundreds though :-)

dunstonh

I am in the same boat, I've been quoted £5k plus a percentage of the valuation to do a 75K transfer.

That is the ballpark you would expect.

That is a rip off and just a way to stop us getting at our pensions that we paid into. 

Except it is neither of those things.