DB to DB transfer

gtat

Hi All,

I am 33 years old and have three small DB pensions: My current Alpha Civil Service pension, a SAUL pension (£3,594 / year + £10.8k lump sum) and a USS pension (approx. £2,452 / year + £7.3k lump sum). I also have a very small DC pot with USS (£1,183) as this was a hybrid scheme.

I have asked Alpha to obtain quotes from SAUL and USS for transferring in to Alpha. I am 9 months in to my role and any transfer has to be done within 12 months of starting (i.e. by mid-July 2021), so I will need to act quickly once the quotes come back.

I have done a lot of research, including searching on this forum, but most DB transfer advice appears to relate to DB to DC schemes. So, is there anything I should be aware of for DB to DB schemes - and is there a reason to not consolidate in Alpha? Would I need to engage an IFA to provide formal transfer advice, even though I only intend on transferring to another DB scheme?

Thank you!

Linton

DB to DB transfer is entirely under the control of the individual DB schemes.    You dont need an IFA, in fact unless the IFA happened to have personal expert knowledge of the particular schemes then it would seem unlikely that they would be of much help.

Bravepants

When I started in my particular role I transferred just short of 9 years into Alpha from USS. I'm glad I did from the point of view of what has happened to USS.

But, in any case, Alpha is an excellent pension and transferring would be a great choice pending quotes.

jimi_man

I would be looking for is the different ages of when you can take the unreduced benefits from each scheme. Alpha is 68 (for you I think). That may make a difference, depending on your circumstances, though the transfer value may well be more in that instance.  

Marcon

gtat said:

Would I need to engage an IFA to provide formal transfer advice, even though I only intend on transferring to another DB scheme?

No. Formal advice is only a requirement when the potential transfer is from a DB scheme to a scheme which allows you to 'flexibly access' your benefits (which in practice is invariably a DC scheme).

gtat

Thanks all - very useful. I may come back to seek further thoughts once the quotes come back.

Good point regarding the age at which I can take unreduced benefits. I believe both USS and SAUL are 65 or 66, whereas Alpha will be SPA (which will probably be well into my 70s by the time I get there!). The lump sums may also be a factor (noting that there is no automatic lump sum from Alpha).

Kynthia

Do either of the DB schemes you are thinking of transferring have a final salary element or are they all CARE? If final salary is your new full time equivalent salary higher than the one linked to your pension (after inflation is added to the older salary)?

As well as the earlier retirement date are there any other benefits you'd gain or lose by transferring such as percentage paid to spouse and children?

hyubh

Kynthia said:

Do either of the DB schemes you are thinking of transferring have a final salary element or are they all CARE? If final salary is your new full time equivalent salary higher than the one linked to your pension (after inflation is added to the older salary)?

Presumably these won't be Club transfers into Alpha however, since both SAUL and USS pulled out of the Public Sector Transfer Club...? So transferring into Alpha will be buying earned pension revaluing by CPI, not a final salary service credit. 

gtat

Kynthia said:

Do either of the DB schemes you are thinking of transferring have a final salary element or are they all CARE? If final salary is your new full time equivalent salary higher than the one linked to your pension (after inflation is added to the older salary)?

As well as the earlier retirement date are there any other benefits you'd gain or lose by transferring such as percentage paid to spouse and children?

Good questions! They are all CARE. I need to check about about the 'benefits' e.g. death in service.
I have now received my transfer quote from USS (stating transfer value of approx. £53,000). Should I also expect a letter from Alpha, to tell me what this £53k would get me in terms of Alpha pension? As a reminder, I asked Alpha to obtain me quotes, so I am hoping I will hear something directly from them too. Otherwise, how do I know what the £53k equates to in terms of transferring in to a DB pension?

Marcon

gtat said:

Kynthia said:

Do either of the DB schemes you are thinking of transferring have a final salary element or are they all CARE? If final salary is your new full time equivalent salary higher than the one linked to your pension (after inflation is added to the older salary)?

As well as the earlier retirement date are there any other benefits you'd gain or lose by transferring such as percentage paid to spouse and children?

Good questions! They are all CARE. I need to check about about the 'benefits' e.g. death in service.
I have now received my transfer quote from USS (stating transfer value of approx. £53,000). Should I also expect a letter from Alpha, to tell me what this £53k would get me in terms of Alpha pension? As a reminder, I asked Alpha to obtain me quotes, so I am hoping I will hear something directly from them too. Otherwise, how do I know what the £53k equates to in terms of transferring in to a DB pension?

See https://www.civilservicepensionscheme.org.uk/members/alpha-scheme-guide/ and go to Section 01C.