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Transfer Defined Benefit Pension & the great suitability report ripoff

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  • Linton
    Linton Posts: 18,175 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Hung up my suit!
    NottinghamKnight said:
    ZingPowZing said:
    NottinghamKnight said:
    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.
    Well, ok, let us start from the principle that anyone who has a transferrable DB scheme can apply for a CETV when eligible to do so. If he is then unable to secure a suitability report, then a transfer cannot follow in any case; contradicting the spirit of the law. It is not beholden on any individual or firm to provide that service but it must be possible otherwise the process is completely broken. You're not still saying the suitability report has to demonstrate a transfer is in the client's interest to enable a transfer, are you NK? Because the client has the right to make the final determination.
    That is a fact that many on this board clearly don't like but - for another group of readers looking in - the condescending assumption that they should be denied that freedom "for their own good" is something of a turn-off; though I can see how the notion appeals to regulars who flatter themselves they belong in a smaller, more select, group who are capable of "assessing risk" and navigating such affairs. Heck, they could probably write the report themselves.

    The FCA is often quoted for stating that most schemes should not be transferred but that's not all it has to say on the subject of DB pensions:
    https://citywire.co.uk/new-model-adviser/news/fca-db-transfer-advice-shouldnt-cost-more-than-3500/a1254565
    Right that's good we are getting back to sensible levels of debate. A suitability report is required, but that doesn't mean that any individual or company is forced to complete one. What is unclear is what the spirit of the law was intended to be. It was an element of promoting a free market, much of the intent was to promote spending and so provide a boost to the economy, subsequent issues around the wider economy and interest rates have pushed cetv numbers to huge ratings which was not foreseen at the time of the legislation. It must be frustrating for many that they can't get a report completed at what they believe is a reasonable price but that is the requirement, the cost of completing the report is effectively just another fee, given inflated cetvs then if a few thousand for the report makes that much difference it suggests that the transfer may not be worthwhile, especially as it may well be a fraction of the volatility of the dc pension it is being transfered to. 
    The FCA is the regulator but shows evidence of incompetence on many levels - if they believe there is a maximum cost for advice then they should be stepping in and providing PI cover to achieve that as commercial insurers do not believe that is economic.
    Myn understanding is that what the "spirit of the law" was intended to be regarding DB pensions is very clear.  The changes to the pension law were never intended to affect DB pensions.   The current problems are a good example of the Law of Unintended Consequences.   They arise because CETVs are now sufficiently high and the freedom granted to DC pensions sufficiently flexible to make a transfer appear attractive.  This was not generally the case in the past except for extreme circumstances such as life shortening ill health.

    This was picked up by the select committee and who raised the risk that money intended to support someone in later life could easily be squandered, leading to poverty and increased expenditure on benefits.  The government accepted the point and rushed through ill-considered legislation requiring advice to be received.

    Now we have the situation where the FCA with only limited levers under their control are attempting to implement what the government failed to do.
  • MarkCarnage
    MarkCarnage Posts: 700 Forumite
    Sixth Anniversary 500 Posts Name Dropper
    Cus said:
     Paid separate advice fee for Lifetime Allowance planning - that was in the hundreds of pounds and good value
    Bit off topic but I'm interested to know what that looked like?
    4 A4 pages  :D:)...seriously though, I asked them to check my own understanding of my LTA position before I made a further and final contribution to my SIPP. They confirmed most of what I thought, but some useful scenario analysis around the age 75 BCE. I think it's a toss up for me whether I get taxed on the withdrawals or the age 75 BCE and I probably need to keep revisiting that depending on my annual income tax position. 
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    1,000 Posts Photogenic Name Dropper First Anniversary
    NottinghamKnight said:
    ZingPowZing said:
    NottinghamKnight said:
    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.
    Well, ok, let us start from the principle that anyone who has a transferrable DB scheme can apply for a CETV when eligible to do so. If he is then unable to secure a suitability report, then a transfer cannot follow in any case; contradicting the spirit of the law. It is not beholden on any individual or firm to provide that service but it must be possible otherwise the process is completely broken. You're not still saying the suitability report has to demonstrate a transfer is in the client's interest to enable a transfer, are you NK? Because the client has the right to make the final determination.
    That is a fact that many on this board clearly don't like but - for another group of readers looking in - the condescending assumption that they should be denied that freedom "for their own good" is something of a turn-off; though I can see how the notion appeals to regulars who flatter themselves they belong in a smaller, more select, group who are capable of "assessing risk" and navigating such affairs. Heck, they could probably write the report themselves.

    The FCA is often quoted for stating that most schemes should not be transferred but that's not all it has to say on the subject of DB pensions:

     What is unclear is what the spirit of the law was intended to be. 
    "Pension freedoms have rightly given people the choice of what to do with their own savings."

    Seems to me the spirit and intention of the Act. I always thought that for the Govt there was an ideological justification. Choice, freedom, personal-responsibility and self-reliance are cornerstones of Conservatism, pretty abstract concepts occasionally embodied in a new law. Similar to the Mental Health Act of the '80's, whose purpose was not to empty hospitals but to offer its patients access to the full gamut of freedoms available to the rest of society. Which is not to say that everyone ought to be released or everyone should have to transfer a DB pension. In either case there were calculations made but to reduce the Acts to bean-counting exercises would be to misrepresent them. It would be inconsistent to pass these pension freedoms but keep DB schemes locked out imo.

    I quite agree that the Law of Unintended Consequences has led to the current mess; if only because the people who appointed Financial Advisers gatekeepers to people's fortunes presumed that Financial Advisers would not act in their own interest. How naive was that? 
      
    But I'm interested to read why Nottingham Knight says pension freedoms should never have been allowed. Has he not, in fact, transferred a DB pension?
  • Silvertabby
    Silvertabby Posts: 10,151 Forumite
    10,000 Posts Eighth Anniversary Name Dropper Photogenic
    Linton said:
    NottinghamKnight said:
    ZingPowZing said:
    NottinghamKnight said:
    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.
    Well, ok, let us start from the principle that anyone who has a transferrable DB scheme can apply for a CETV when eligible to do so. If he is then unable to secure a suitability report, then a transfer cannot follow in any case; contradicting the spirit of the law. It is not beholden on any individual or firm to provide that service but it must be possible otherwise the process is completely broken. You're not still saying the suitability report has to demonstrate a transfer is in the client's interest to enable a transfer, are you NK? Because the client has the right to make the final determination.
    That is a fact that many on this board clearly don't like but - for another group of readers looking in - the condescending assumption that they should be denied that freedom "for their own good" is something of a turn-off; though I can see how the notion appeals to regulars who flatter themselves they belong in a smaller, more select, group who are capable of "assessing risk" and navigating such affairs. Heck, they could probably write the report themselves.

    The FCA is often quoted for stating that most schemes should not be transferred but that's not all it has to say on the subject of DB pensions:
    https://citywire.co.uk/new-model-adviser/news/fca-db-transfer-advice-shouldnt-cost-more-than-3500/a1254565
    Right that's good we are getting back to sensible levels of debate. A suitability report is required, but that doesn't mean that any individual or company is forced to complete one. What is unclear is what the spirit of the law was intended to be. It was an element of promoting a free market, much of the intent was to promote spending and so provide a boost to the economy, subsequent issues around the wider economy and interest rates have pushed cetv numbers to huge ratings which was not foreseen at the time of the legislation. It must be frustrating for many that they can't get a report completed at what they believe is a reasonable price but that is the requirement, the cost of completing the report is effectively just another fee, given inflated cetvs then if a few thousand for the report makes that much difference it suggests that the transfer may not be worthwhile, especially as it may well be a fraction of the volatility of the dc pension it is being transfered to. 
    The FCA is the regulator but shows evidence of incompetence on many levels - if they believe there is a maximum cost for advice then they should be stepping in and providing PI cover to achieve that as commercial insurers do not believe that is economic.
    Myn understanding is that what the "spirit of the law" was intended to be regarding DB pensions is very clear.  The changes to the pension law were never intended to affect DB pensions.   The current problems are a good example of the Law of Unintended Consequences.   They arise because CETVs are now sufficiently high and the freedom granted to DC pensions sufficiently flexible to make a transfer appear attractive.  This was not generally the case in the past except for extreme circumstances such as life shortening ill health.

    This was picked up by the select committee and who raised the risk that money intended to support someone in later life could easily be squandered, leading to poverty and increased expenditure on benefits.  The government accepted the point and rushed through ill-considered legislation requiring advice to be received.

    Now we have the situation where the FCA with only limited levers under their control are attempting to implement what the government failed to do.
    I can understand someone being tempted by a 40+ multiple CETV, but the LGPS transfer rates are set by GAD rather than being linked to government gilts.

    As such, the average CETV is more like a 20x multiple.  Yet people still do it.  In the cases of low paid manual workers, in particular, a CETV of just a few £KK was seen as the equivalent of a lottery win, and it was very frustrating not being able to tell them straight that going on a spending spree now (and then relying on just the State pension in retirement) really may not be the best way of using their hard earned retirement savings.
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    1,000 Posts Photogenic Name Dropper First Anniversary
    NottinghamKnight said:
    ZingPowZing said:
    NottinghamKnight said:
    ZingPowZing said:
    NottinghamKnight said:
    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.
    Well, ok, let us start from the principle that anyone who has a transferrable DB scheme can apply for a CETV when eligible to do so. If he is then unable to secure a suitability report, then a transfer cannot follow in any case; contradicting the spirit of the law. It is not beholden on any individual or firm to provide that service but it must be possible otherwise the process is completely broken. You're not still saying the suitability report has to demonstrate a transfer is in the client's interest to enable a transfer, are you NK? Because the client has the right to make the final determination.
    That is a fact that many on this board clearly don't like but - for another group of readers looking in - the condescending assumption that they should be denied that freedom "for their own good" is something of a turn-off; though I can see how the notion appeals to regulars who flatter themselves they belong in a smaller, more select, group who are capable of "assessing risk" and navigating such affairs. Heck, they could probably write the report themselves.

    The FCA is often quoted for stating that most schemes should not be transferred but that's not all it has to say on the subject of DB pensions:

     What is unclear is what the spirit of the law was intended to be. 
    "Pension freedoms have rightly given people the choice of what to do with their own savings."

    Seems to me the spirit and intention of the Act. I always thought that for the Govt there was an ideological justification. Choice, freedom, personal-responsibility and self-reliance are cornerstones of Conservatism, pretty abstract concepts occasionally embodied in a new law. Similar to the Mental Health Act of the '80's, whose purpose was not to empty hospitals but to offer its patients access to the full gamut of freedoms available to the rest of society. Which is not to say that everyone ought to be released or everyone should have to transfer a DB pension. In either case there were calculations made but to reduce the Acts to bean-counting exercises would be to misrepresent them. It would be inconsistent to pass these pension freedoms but keep DB schemes locked out imo.

    I quite agree that the Law of Unintended Consequences has led to the current mess; if only because the people who appointed Financial Advisers gatekeepers to people's fortunes presumed that Financial Advisers would not act in their own interest. How naive was that? 
      
    But I'm interested to read why Nottingham Knight says pension freedoms should never have been allowed. Has he not, in fact, transferred a DB pension?
    I don't have any db pensions and have no strong feelings about that. What I do object to is people claiming they are victims when they are not,
    But you said pension freedoms should never have been allowed. I take it you mean just DB schemes but, since you've never had one, are you really saying,  "other people" should not be allowed to transfer theirs?

    there never was an intention to allow the transfer of db pensions as Linton has pointed out above.
    Do you, or Linton, have a link to that statement, please?
    Because it begs a couple of further question: if DB pension transfers were meant to have been prohibited, why was it not built in to the legislation and why is there no prospect of a change to the legislation to prohibit their transfer now? For sure the expectation was that DB pensions, in the main, would not be transferred but the freedom to do so is part of the ideological dimension of the Act. In principle, they should be able to.

    People should expect what they were promised, and claiming victimhood that this 'pot' isn't released to them is irritating.
    People were promised pension freedom. It became law. If the process becomes unworkable, it defies the law. What we have now is pretty much the worst of all worlds, the process barely works, and very badly. No wonder posters are frustrated.  
    . "Pension freedoms have rightly given people the choice of what to do with their own savings," is the first line of the summary here https://publications.parliament.uk/pa/cm201719/cmselect/cmworpen/917/917.pdf

    People have their heads turned by a large number, however that large number is insufficient to buy the same income on the same basis, which makes sense as there would otherwise be little point in the db scheme offering that sum. It's therefore unsurprising that most reports will find that a transfer is unsuitable, irrespective of the intentions of the person trying to transfer the db pension.
    You'll be quite surprised to read this, then:
    • 234,951 DB scheme members received advice on whether to transfer between April 2015 and September 2018.
    • Of those receiving advice 162,047 members (69%) had been recommended to transfer out, and 72,904 members (31%) had been recommended not to transfer.

    Ultimately if no one wants to transact with you then you can't force them to, that would be very unfair if they were forced to do so.
    Not an issue since nobody has said any individual firm has to provide this service. 
    70% of people who did transfer signed up to ongoing charges.
  • Linton
    Linton Posts: 18,175 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Hung up my suit!
    edited 1 November 2020 at 5:46PM
    ZingPowZing said:
    NottinghamKnight said:
    ZingPowZing said:
    NottinghamKnight said:
    ZingPowZing said:
    NottinghamKnight said:
    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.
    Well, ok, let us start from the principle that anyone who has a transferrable DB scheme can apply for a CETV when eligible to do so. If he is then unable to secure a suitability report, then a transfer cannot follow in any case; contradicting the spirit of the law. It is not beholden on any individual or firm to provide that service but it must be possible otherwise the process is completely broken. You're not still saying the suitability report has to demonstrate a transfer is in the client's interest to enable a transfer, are you NK? Because the client has the right to make the final determination.
    That is a fact that many on this board clearly don't like but - for another group of readers looking in - the condescending assumption that they should be denied that freedom "for their own good" is something of a turn-off; though I can see how the notion appeals to regulars who flatter themselves they belong in a smaller, more select, group who are capable of "assessing risk" and navigating such affairs. Heck, they could probably write the report themselves.

    The FCA is often quoted for stating that most schemes should not be transferred but that's not all it has to say on the subject of DB pensions:

     What is unclear is what the spirit of the law was intended to be. 
    "Pension freedoms have rightly given people the choice of what to do with their own savings."

    Seems to me the spirit and intention of the Act. I always thought that for the Govt there was an ideological justification. Choice, freedom, personal-responsibility and self-reliance are cornerstones of Conservatism, pretty abstract concepts occasionally embodied in a new law. Similar to the Mental Health Act of the '80's, whose purpose was not to empty hospitals but to offer its patients access to the full gamut of freedoms available to the rest of society. Which is not to say that everyone ought to be released or everyone should have to transfer a DB pension. In either case there were calculations made but to reduce the Acts to bean-counting exercises would be to misrepresent them. It would be inconsistent to pass these pension freedoms but keep DB schemes locked out imo.

    I quite agree that the Law of Unintended Consequences has led to the current mess; if only because the people who appointed Financial Advisers gatekeepers to people's fortunes presumed that Financial Advisers would not act in their own interest. How naive was that? 
      
    But I'm interested to read why Nottingham Knight says pension freedoms should never have been allowed. Has he not, in fact, transferred a DB pension?
    I don't have any db pensions and have no strong feelings about that. What I do object to is people claiming they are victims when they are not,
    But you said pension freedoms should never have been allowed. I take it you mean just DB schemes but, since you've never had one, are you really saying,  "other people" should not be allowed to transfer theirs?

    there never was an intention to allow the transfer of db pensions as Linton has pointed out above.
    1) Do you, or Linton, have a link to that statement, please?
    Because it begs a couple of further question: if DB pension transfers were meant to have been prohibited, why was it not built in to the legislation and why is there no prospect of a change to the legislation to prohibit their transfer now? For sure the expectation was that DB pensions, in the main, would not be transferred but the freedom to do so is part of the ideological dimension of the Act. In principle, they should be able to.

    People should expect what they were promised, and claiming victimhood that this 'pot' isn't released to them is irritating.
    2) People were promised pension freedom. It became law. If the process becomes unworkable, it defies the law. What we have now is pretty much the worst of all worlds, the process barely works, and very badly. No wonder posters are frustrated.  
    . "Pension freedoms have rightly given people the choice of what to do with their own savings," is the first line of the summary here https://publications.parliament.uk/pa/cm201719/cmselect/cmworpen/917/917.pdf

    People have their heads turned by a large number, however that large number is insufficient to buy the same income on the same basis, which makes sense as there would otherwise be little point in the db scheme offering that sum. It's therefore unsurprising that most reports will find that a transfer is unsuitable, irrespective of the intentions of the person trying to transfer the db pension.
    3) You'll be quite surprised to read this, then:
    • 234,951 DB scheme members received advice on whether to transfer between April 2015 and September 2018.
    • Of those receiving advice 162,047 members (69%) had been recommended to transfer out, and 72,904 members (31%) had been recommended not to transfer.

    Ultimately if no one wants to transact with you then you can't force them to, that would be very unfair if they were forced to do so.
    Not an issue since nobody has said any individual firm has to provide this service. 
    70% of people who did transfer signed up to ongoing charges.
    1) See  https://www.gov.uk/government/collections/pension-schemes-bill-2014-to-2015#:~:text=The Pension Schemes Act sets,schemes and 'collective benefits'.
    Where it gives the objective of the act:

    Main provisions of the Pension Schemes Act 2015

    The Pension Schemes Act sets out a new legislative framework for private pensions. .......

    If you carry on reading it should be clear.

    I believe people have always been able to transfer DB  (except certain government ones) to DC pensions.   This would happen perhaps in cases of terminal ill health.  Prior to the  2015 act there were curbs on drawdown which, together with the lower CETVs, made transfer for most people obviously poor value.

    The extra DC pension freedoms changed the ability to transfer DB pensions from a minor feature into a real issue.

    2) "Pension freedom" clearly refers to DC pension freedoms.  There were no new DB pension freedoms.  See later on:

    1. Pension freedoms were introduced in April 2015. Under this reform, people aged 55 or over were given far greater freedom over how to access their defined contribution (DC) pension pots. Previously, most people were required to purchase an annuity, with the majority of those opting to do so through their existing provider.1 People can still purchase annuities, but are also now free to take their whole pot in cash, leave funds invested while withdrawing income through drawdown, or leave the whole pot untouched.

    "People having rights" to their own savings again refers solely to DC pensions.  With a DC pension when someone retires they have access to a personal pot of money which they can do various things with.  The 2015 Act increased the flexibility of the options available.  DB pensioners do not have access to a personal pot of money.  What they sighned up for and have is the legal guarantee that they will receive a stated income until death.  This comes out of a centrol pot covering all the scheme members.

    3) The FCA decided too many people were receiving positive recommendations when they should not have.


    PS I am not a professional and welcome anyone who has better knowledge to provide corrections.

  • arnoldy
    arnoldy Posts: 505 Forumite
    Part of the Furniture 500 Posts Name Dropper
    I do agree with your sentiment OP, "personal responsibility" seems to be a concept that leaves the FCA aghast. Just because we have a few people who are foolish why should I be caught up in legislation? At this rate i will be banned from buying my own Christmas presents because I'm not responsible enough to do my own research. Please just leave us alone - i can make my own bed (and lie in it). If I screw up that's my look out.
    Far better for the FCA to sort out their HL/Woodford/Link Solutions mess which seems to be moving slowly glacially.
     
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    1,000 Posts Photogenic Name Dropper First Anniversary
    edited 1 November 2020 at 6:42PM
    Thank you for the link. Where it states:
           Provisions in the Pension Schemes Act ensure that the new flexibilities operate as intended. These include:
    • new safeguards to support individuals if they wish to transfer out of their existing Defined Benefit scheme to access the new flexibilities. 
    If there is a provision that contradicts the above, it has eluded me on first reading.

  • Cus
    Cus Posts: 779 Forumite
    Sixth Anniversary 500 Posts Name Dropper
    arnoldy said:
    I do agree with your sentiment OP, "personal responsibility" seems to be a concept that leaves the FCA aghast. Just because we have a few people who are foolish why should I be caught up in legislation? At this rate i will be banned from buying my own Christmas presents because I'm not responsible enough to do my own research. Please just leave us alone - i can make my own bed (and lie in it). If I screw up that's my look out.
    Far better for the FCA to sort out their HL/Woodford/Link Solutions mess which seems to be moving slowly glacially.
     
    They should have something that the person has to sign, saying that if they blow the pot they are not allowed to them claim any type of benefits?
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