Advice on Kingfisher pension

swb62

I am 58 and have a deferred FS pension with Kingfisher. I was there for 7 years and left in 2007. I have just now taken notice of the statements sent over the years and have now looked online to see the benefit statement. Yes, I should have done this years ago !!

The 2020 statement is £2.9K pa and  projects around £3.3K pa at 65.

This to me seemed pretty poor as it was £2K when I left (stand be corrected). Reading the scheme docs, it seems it only rises by RPI, max 5%.

I am thinking moving this elsewhere may be a better option, it appears to have a transfer value around £110K

Thoughts appreciated. 

Marcon

Endless threads on transferring out of a DB scheme. Use the search box above and you'll get plenty of thoughts.

xylophone

https://www.kingfisherpensions.com/left-scheme/transferring/

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

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

However, although most schemes provide the right to transfer, not every scheme has to accept an incoming transfer.

A stakeholder pension scheme is currently the only type of scheme which must accept any transfer from another registered pension scheme.

https://www.royallondon.com/siteassets/site-docs/media-centre/good-with-your-money-guides/five-good-reasons-good-with-your-money-guide-2018-edition.pdf

It may not be that easy to find a Pension Transfer Specialist to do the work - the fee for doing it is not likely to be low.

https://adviserbook.co.uk/        You would tick "confirmed independent" and "pension transfer" when the menu comes up.

Whiterose23

I also have a deferred Kingfisher pension from 8 years’ part-time employment that ended in 2009. Mine is forecast to pay just £1200 at 65 and has a current CTV of £36k, which is low but over the threshold of £30k so I would have to pay thousand to transfer it. I think the £30k threshold is much too low. Like you I would like to transfer to another scheme as it doesn’t seem to grow much at all year on year.

AlanP_2

Whiterose23 said:

I also have a deferred Kingfisher pension from 8 years’ part-time employment that ended in 2009. Mine is forecast to pay just £1200 at 65 and has a current CTV of £36k, which is low but over the threshold of £30k so I would have to pay thousand to transfer it. I think the £30k threshold is much too low. Like you I would like to transfer to another scheme as it doesn’t seem to grow much at all year on year.

Would you prefer it to grow at 5% a year as a consequence of the inflation RPI measure being 5%?

It won't be worth anymore in real terms when you retire if it does.

The purpose of a DB pension is not to increase / decrease in value each year in line with movements in investment markets, it is a promise to pay £x per year from retirement to death with a spouse pension of typically 50% after that if applicable.,

Once deferred the "real terms" value of that promise is achieved by automatic inflation level increases (CPI or RPI and maybe with a cap depending on scheme rules). The company is honouring the contract you entered in to with them when you joined the scheme. If you didn't want a Kingfisher Defined Benefit pension why did you join?

Transferring a Deferred DB can be the right thing to do for some people, I am going through the advice process for one at the moment, but the rationale that "it doesn't seem to grow much at all year on year" is irrelevant as it is growing at exactly the correct amount for the scheme rules that are applicable. 

Whiterose23

AlanP_2 said:

Whiterose23 said:

I also have a deferred Kingfisher pension from 8 years’ part-time employment that ended in 2009. Mine is forecast to pay just £1200 at 65 and has a current CTV of £36k, which is low but over the threshold of £30k so I would have to pay thousand to transfer it. I think the £30k threshold is much too low. Like you I would like to transfer to another scheme as it doesn’t seem to grow much at all year on year.

Would you prefer it to grow at 5% a year as a consequence of the inflation RPI measure being 5%?

It won't be worth anymore in real terms when you retire if it does.

The purpose of a DB pension is not to increase / decrease in value each year in line with movements in investment markets, it is a promise to pay £x per year from retirement to death with a spouse pension of typically 50% after that if applicable.,

Once deferred the "real terms" value of that promise is achieved by automatic inflation level increases (CPI or RPI and maybe with a cap depending on scheme rules). The company is honouring the contract you entered in to with them when you joined the scheme. If you didn't want a Kingfisher Defined Benefit pension why did you join?

Transferring a Deferred DB can be the right thing to do for some people, I am going through the advice process for one at the moment, but the rationale that "it doesn't seem to grow much at all year on year" is irrelevant as it is growing at exactly the correct amount for the scheme rules that are applicable. 

Why do you assume I didn’t want the pension? Of course I wanted it. But it is of such low value that I would like to transfer it, but I am unable to because of the low threshold of £30k before having to pay for advice. Which is the point I’m making.
The CTV has fluctuated up and down by around £2k over the last four years (mostly down) and as I have another DB pension I would like to move this one into another scheme.
I understand how valuable these pensions are so please don’t assume I don’t.

AlanP_2

Whiterose23 said:

AlanP_2 said:

Whiterose23 said:

I also have a deferred Kingfisher pension from 8 years’ part-time employment that ended in 2009. Mine is forecast to pay just £1200 at 65 and has a current CTV of £36k, which is low but over the threshold of £30k so I would have to pay thousand to transfer it. I think the £30k threshold is much too low. Like you I would like to transfer to another scheme as it doesn’t seem to grow much at all year on year.

Would you prefer it to grow at 5% a year as a consequence of the inflation RPI measure being 5%?

It won't be worth anymore in real terms when you retire if it does.

The purpose of a DB pension is not to increase / decrease in value each year in line with movements in investment markets, it is a promise to pay £x per year from retirement to death with a spouse pension of typically 50% after that if applicable.,

Once deferred the "real terms" value of that promise is achieved by automatic inflation level increases (CPI or RPI and maybe with a cap depending on scheme rules). The company is honouring the contract you entered in to with them when you joined the scheme. If you didn't want a Kingfisher Defined Benefit pension why did you join?

Transferring a Deferred DB can be the right thing to do for some people, I am going through the advice process for one at the moment, but the rationale that "it doesn't seem to grow much at all year on year" is irrelevant as it is growing at exactly the correct amount for the scheme rules that are applicable. 

Why do you assume I didn’t want the pension? Of course I wanted it. But it is of such low value that I would like to transfer it, but I am unable to because of the low threshold of £30k before having to pay for advice. Which is the point I’m making.
The CTV has fluctuated up and down by around £2k over the last four years (mostly down) and as I have another DB pension I would like to move this one into another scheme.
I understand how valuable these pensions are so please don’t assume I don’t.

I was responding in the main to the last sentence of your post where you set out what appeared to be your reason for wanting to transfer:

 Like you I would like to transfer to another scheme as it doesn’t seem to grow much at all year on year.

I'm glad you understand how valuable these (DB) pensions are, many who post on here about transferring out do not appear to have that understanding.

As regards the £30k level, let's be honest no matter what level it was set at by the Regulator / Gov't somebody would be a couple of thousand over it and make the point that it was too low.

£30k is low but it protects those with smaller pots from making mistakes that would hurt them longer term. If it was set at a higher level, £100k for example, there would be a lot of "no advice" transfers undertaken by those who saw the £££ signs and didn't consider the longer term implications.

A point that is made on here quite often when charges for transfers come up is that £3k on a transfer value of £30-40K is 7.5 to 10%. As you highlight CETVs move around by similar percentages on a regular basis. Once transferred to an investment pension the value can move up or down by that in a matter of days or weeks as March last year proved. If the basis for transferring is sensible then that level of fees shouldn't affect whether to proceed or not.

(Obviously recognising that fees work more cost effectively on larger CETVs). 

Whiterose23

I just want the threshold to be higher than the total I have so I can add it to my current company DC pension :-)