Final Salary Pension - unsure what to do!

jamjar92

I would say stay with the DB. One question "£28,521 pa or £21,522 plus £143k tax free cash", is this a sliding scale, are you allowed to take a smaller lump sum in return for higher pension. My LGPS DB gives an automatic lump sum of Y, but I can increase a max of X, by decreasing the pension or somewhere inbetween. I am taking the mininum lump sum from the scheme so I the max pension I can index-linked.

If it is a sliding scale and you want a lump sum, think about how much you would need/want and have the rest as pension.

hyperhypo

Echo jamjars comment...many private schemes are flexible on amount of dB scheme that is commutated as cash. Often quoted as a multiple for each £1000 of dB annual amount given up. The multiple varies in different schemes..eg...x12 up to > 40. Don't have to take the full amount. Might be better to expose more dB to inflation proofing indexing

[Deleted User]

Not wanting to sound morbid, but life expectancy with MS is 7 years less than mean 
In effect that will give you, on average from 60, 18 years 
What spouse provision is inside the DB scheme?
I for one would be looking at transferring and taking early retirement at 56 (I think for your age) and gaining some of those potentially lost 7 years back and having some money left over in the pension for your estate

ItSaDoGsLiFe

Deleted_User said:

Not wanting to sound morbid, but life expectancy with MS is 7 years less than mean 
In effect that will give you, on average from 60, 18 years 
What spouse provision is inside the DB scheme?
I for one would be looking at transferring and taking early retirement at 56 (I think for your age) and gaining some of those potentially lost 7 years back and having some money left over in the pension for your estate

That's a fair point and having MS is a valid reason to consider transferring.
However it's a an unpredictable illness with a variable prognosis, if the OP is currently 51 and well, with little or no disability then depending upon how long ago the diagnosis was made, the prognosis may be pretty good.
I think if your husband has no pension provision and your scheme has significant spouse benefits, I'd be wary about giving this up.
I definitely do agree with considering early retirement if you can and taking a larger lump sum, so you can make the most of your younger and healthy years!

TVAS

You are being dazzled by the money and psychologically you want it under your control because you think it will be lost. The reason why pension has increased is because it is expensive to buy 28k until death that is increasing and has a spouse pension on your death. The transfer value is not generous 28k x 35 is 998k not 810k. You are 51 so you want to take on the risk and the charges of your own plan and you can't take benefits now. Because of you ill health when you want to take benefits you could consider DB pension versus enhanced annuity as this will pay a higher sum due to your health. DO NOT TAKE ANY ADVICE UNTIL YOU WANT TO TAKE BENEFITS. The IFA will try and rip you off! Pay 2% of the transfer value and limit any ongoing advice fee to 0.25% p.a. if you transfer to a drawdown. If it is to an enhanced annuity there will be no ongoing advice fee. Say you don't make it to age 75 and you transfer to a drawdown plan at age 59 and do not take any thing from the plan. You can nominate each of your kids a third of the fund value, this will be outside of your estate and therefore tax free. 

enthusiasticsaver

I think you would be mad to give up a FS salary of that size given you presumably will get annual increases too.  Mine was much smaller but I gave up on trying to get transfer advice as it was so expensive.  On a pension of that size it will be horrific and they will probably recommend stay put if you have  no other guaranteed income in retirement.  MS  is not a life threatening condition (my brother has it too) so there is nothing to say you will have a shorter life expectancy but you may need to pay for additional help in later years so having a good pension sounds sensible.  As you say what would you do with it if you did manage to get it transferred?  Presumably you would invest it in a drawdown sipp but the charges could be high and no guarantee of investment returns.  Unless you need the £143k I would take the higher amount. 

barnstar2077

Does taking the lump sum and reduced pension affect how much your partner would receive should you go first?

If so then I would take the increased pension and no / greatly reduced lump sum.   If you have no pressing reason for the lump sum then the extra seven grand a year would pay for a nice holiday anyway, and your partner could benefit from an inflation linked increased amount later. 

jamjar92

barnstar2077 said:

Does taking the lump sum and reduced pension affect how much your partner would receive should you go first?

If so then I would take the increased pension and no / greatly reduced lump sum.   If you have no pressing reason for the lump sum then the extra seven grand a year would pay for a nice holiday anyway, and your partner could benefit from an inflation linked increased amount later. 

Most FS pension where there is a spouse element is usually 50% of main pension. The different schemes however have different rules and OP should check the rules for this scheme.