Gmp pension transfer

mcn99

In the last year I have been slowly transferring six old pensions into my sipp.

I'm having issues on moving the last small pension. It has a gmp element. 

My question is at what point am I legally required  to take financial advice.

The pension is valued at 44k. The last gmp underpin I saw was valued at 11k. About 2 years ago.

Is it the fund size over 30k or the gmp value/benefits over 30k, that require me to get an adviser involved. The sipp provider is requiring that I use an adviser.

Thanks in advance

Marcon

mcn99 said:

In the last year I have been slowly transferring six old pensions into my sipp.

I'm having issues on moving the last small pension. It has a gmp element. 

My question is at what point am I legally required  to take financial advice.

The pension is valued at 44k. The last gmp underpin I saw was valued at 11k. About 2 years ago.

Is it the fund size over 30k or the gmp value/benefits over 30k, that require me to get an adviser involved. The sipp provider is requiring that I use an adviser.

Thanks in advance

If your total Cash Equivalent Transfer Value is at least £30,000, there is a statutory requirement for the trustees of the DB scheme to establish that you have received (although not necessarily followed) advice from a suitably qualified and authorised adviser. 

SIPPs can impose any conditions they like on transfers in - including a requirement that the adviser gives a report which positively supports the transfer. You might want to check that with you SIPP provider before going any further.

mcn99

I should have said this pension is a DC that has a gmp element. The defined benefit gmp element is well under 30k

dunstonh

Is there a defined benefit underpin or just GMP?
You have mentioned both underpin and GMP in your post.

xylophone

https://www.gov.uk/government/publications/pension-benefits-with-a-guarantee-and-the-advice-requirement/pension-benefits-with-a-guarantee-and-the-advice-requirement

Have you asked the Administrators of the Scheme whether they would require confirmation that you had received  regulated advice before they would permit a transfer out?

https://www.thepensionsregulator.gov.uk/en/trustees/managing-your-hybrid-scheme-

mark55man

Have you considered not transferring it. 

I understood GMP's revalued at 7.5% per year which would be a lot more than inflation inked annuities and would be seen as an aggressive target for investment return on the exchanged money.  Even if you did transfer it, it may be more valueable in a few years than now.  Its transfer value seems to have already quadrupled in 2 years.  So even if you have to spend £5k on advice to get it out that's not a terrible outcome for you is it?

You have the A team on this thread already (not me), so OP the more information you can share the better your advice would be  

Marcon

mark55man said:

Have you considered not transferring it. 

I understood GMP's revalued at 7.5% per year which would be a lot more than inflation inked annuities and would be seen as an aggressive target for investment return on the exchanged money.  Even if you did transfer it, it may be more valueable in a few years than now.  Its transfer value seems to have already quadrupled in 2 years.  So even if you have to spend £5k on advice to get it out that's not a terrible outcome for you is it?

You have the A team on this thread already (not me), so OP the more information you can share the better your advice would be  

Just to clarify for others reading this thread...GMPs revalue at different rates, depending on two things:

• the method of revaluation used by a particular scheme (Full Rate or Fixed Rate)
• if Fixed Rate, the date when the member left 'active' (contributing) membership. Could be as high as 8.5% pa for those leaving before 6 April 1988, reducing gradually until leavers from 6 April 2012 have GMPs revalued at 4.75% pa.

But the point is well made - GMPs often have extremely generous revaluation rates. 

mark55man

Thank you @Marcon - a little knowledge is a dangerous thing but better to have some sort of clue than none at all 

mcn99

Thanks for all comments, sorry for delay responding but been busy searching out old documents before replying, the pension administrator was changed and I stopped getting annual reports in 2018. 

From what I can see from an old  2017 document. the total value of guaranteed benefits was only 10,200 (gmp under pin?), and this was all for GMP. If I look at HMRC pension estimate its calculating 18.50 per week for COPE. the GMP also has an on death 50% spouse element to it.

So ignoring at moment if its good or bad, my question is it the total value of the transfer or the actual value of defined benefits that triggers the legal requirement to be advised ?. I thought I did not require advice as benefits were well under 30k. I suspect the SIPP provider is just being ultra cautious even when its such a small amount of benefits.

In 2017 it was possible to partially transfer the pension, and leave behind the pre 97 gmp element in scheme, so I'm thinking that this might be the best approach if its still possible.

I should add the reason to transfer is this last pension does not allow any drawdown. 
 

xylophone

Are you able to answer the question in my post above?

mcn99

Back in 2017 I was informed that I did not need regulated advice. I dont believe that has changed. In 2017 the trustees  were trying to move the pension  to a new provider, it was all going to be automatically transferred (with loss of gmp), then it was stopped. They only moved non gmp pensions to new provider, and then a new administrator took over the old gmp pensions.

I have been trying to contact administrator for over a month to find the current breakdown of the transfer value. I used to get these figures  for pre97 gmp, and post gmp .