Plan closed to further accrual

rugbyleaguesmate

Hope this hasn't been posted previously, if it has sorry I couldn't see it.
I've recently had a letter to say that one of my dormant DBS pensions will stop accruing March 31st. Its Total Cash Equivalent Transfer Value is £60,611.54 and I have 2 other pensions which, with all three values combined take me to about 85% of Life Time Allowance.
I'm aged 51, Please for a simple Lancashire lad could some one explain the steps I should take to decide whether to leave it where it is or move it into my current DB scheme?
If there is a thread that already covers this then please could you direct me to it?
Thank you
Ian

MX5huggy

I doubt your current scheme will accept a transfer in. You can do this in the first year of membership normally only. 

Albermarle

Can you explain the situation a bit more clearly.
DBS pensions ? 
Two other pensions . Are they both DB pensions? and one of them is your current one ?
Normally DB pensions are stand alone and not possible to merge them . In any case not sure what the advantage would be ?

rugbyleaguesmate

Thanks for quick replies, yes sorry I have three pensions all defined benefit and one is my current pension which I joined in 2003. The scheme which has stopped accrual has provided a transfer value but I have not approached current scheme to see whether they would accept or actually is it the right thing to do.

xylophone

I've recently had a letter to say that one of my dormant DBS pensions will stop accruing March 31st.

You mean that you have a deferred DB pension in this scheme and it will cease to revalue in deferment?

Is there a GMP?

Marcon

xylophone said:

I've recently had a letter to say that one of my dormant DBS pensions will stop accruing March 31st.

You mean that you have a deferred DB pension in this scheme and it will cease to revalue in deferment?

Is there a GMP?

I don't think that's what OP means - revaluation in deferment is a legislative requirement. Given OP's age, he will certainly have benefits built up which are covered by revaluation (introduced on all benefits in 1991).

OP, the fact your scheme has closed to future accrual only has a direct impact on those still employed by your former employer - it means they can't go on building up further benefits in the scheme. 'Communicating' with deferred pensioners (that's you) and pensioners often creates more confusion than saying nothing, as you've just found!

You don't need to do anything unless you wish to do so. Ask your current scheme if they will accept a transfer in and if so, on what basis (i.e. ask them what it would 'buy'). You don't normally need to take financial advice if you are transferring from one DB scheme to another.

On the other hand, if you choose to transfer to a defined contribution (money purchase) scheme, where you could access your benefits on a flexible basis, you would need to take properly authorised advice because your transfer value is over £30,000. 

rugbyleaguesmate

Really BIG thank you for this, the letter states that the plan has closed to future accrual, it then says as a deferred member it will have no impact on level of benefits available on retirement or to transfer away.
So I guess the fund should sit where its allowed to sit and deliver the best return.
I've enquired with current provider to see if they are accepting transfers.

jamesd

You could also consider when you want to retire. You might find that you have the money to do it at 55 or maybe sooner, with ample income 

xylophone

I don't think that's what OP means - revaluation in deferment is a legislative requirement. 

Indeed - I couldn't understand how accrual could apply to a deferred pension and wondered whether there had been some misunderstanding concerning revaluation in deferment.

Albermarle

I think there is some confusion here .
It is possible to transfer out of a DB scheme into a DC scheme.( although usually not recommended)
However the OP is talking about the possibility of transferring one DB pension into another DB pension .
I would have thought that was normally not possible ?

Marcon

Albermarle said:

I think there is some confusion here .
It is possible to transfer out of a DB scheme into a DC scheme.( although usually not recommended)
However the OP is talking about the possibility of transferring one DB pension into another DB pension .
I would have thought that was normally not possible ?

Yes, if the receiving scheme is prepared to accept the transfer. There are 3 possible ways to do so: into a DC arrangement attached to the main scheme; as a 'fixed' pension payable at NRD; or as a service credit (i.e. an extra period of pensionable service).

Special terms are available if both the ceding (transferring) and receiving schemes are members of the public sector transfer club. 

A DB scheme almost invariably accepts transfers in only if the individual concerned is still an 'active' member (i.e. one who is still building up future benefits).