Is it enough?

Marcon

Mowzel said:

Quick question if thats OK guys, been advised by my IFA that I need to ask for an extension on my CETV figures as  the 3 months is almost up and he won't have time to give full advice without an extension, alternatively wait until next May for a new CETV, does this happen regularly? 

Schemes certainly don't regularly agree to extend deadlines, but it is very common for members and/or their advisers to miss them and have to start again.

No harm in asking, but you may well get the answer no. If that's the case, there are two possibilities: 

• ask if you have can a second transfer value once the first one has actually expired (you may have to pay for this - £500 + VAT is fairly typical)
• wait until the 12 months from the issue of your current CETV has passed and then you are entitled to another CETV free of charge.

Triumph13

jamesd said:

It's clear that meeting your objective is impossible without the DB transfer 

Not sure I'd agree with that.  The transfer may very well be the best way to go, but the goal should be achievable without it in various different ways.

Say OP defers the pension for the 4 years that their wife is still working.  Shortfall for those years totals £25.2k from the DC scheme as you calculated.  DB will have increased in deferral  - probably to more than £13k pa.  Add £5k for the wife's pension leaves you a shortfall of £6k pa for the next 8 years so a further £48k needed from the DC so total bridging needs are around £73k from the £81K DC fund - tight but doable.  Once the first SP is in payment you are over the £24k target and the second SP is jam on top.

You get more slack if OP doesn't defer.  In that case there is a £4.7k surplus in years 1 to 4 to help offset the £8k pa shortfall for the next 8 years so the net bridging requirement is just £45k from the £81k DC fund.  First SP just gets them to the £24k target and second one is again jam on top.

Personally I might still lean towards the transfer, but it's definitely not the end of the world if that proves impractical.

Mowzel

Thanks for your replies much appreciated, the problem seems to be Capita dragging there heels with my DC pension details, I'd given my IFA the latest details I had but they weren't upto date enough to make any sort of cast iron decision, so in effect it's Capita who are causing the delay and taking me over the 3 month CETV timescale.

I had a IFA already lined up (this has been rumbling on since early March) 

Rang Capita and explained the situation and asked for an extension, somebody will ring me at some point to let me know whether its possible or not, wont hold my breath. 

Albermarle

Marcon said:

Mowzel said:

Quick question if thats OK guys, been advised by my IFA that I need to ask for an extension on my CETV figures as  the 3 months is almost up and he won't have time to give full advice without an extension, alternatively wait until next May for a new CETV, does this happen regularly? 

Schemes certainly don't regularly agree to extend deadlines, but it is very common for members and/or their advisers to miss them and have to start again.

No harm in asking, but you may well get the answer no. If that's the case, there are two possibilities: 

• ask if you have can a second transfer value once the first one has actually expired (you may have to pay for this - £500 + VAT is fairly typical)
• wait until the 12 months from the issue of your current CETV has passed and then you are entitled to another CETV free of charge.

It is a bit strange that is how it works . Most DB schemes seem quite keen to offload their DB scheme liabilities ( mine certainly is) so you would think they would be happy just to issue a new CETV free of charge to help the process along .

Mowzel

Guys... just for clarity (and my sanity) is it correct that to take advice and be given a positive outcome on a CETV, you can't pay the IFA charges  from the transferred funds as its now Illegal ?
 Or am I not understanding this correctly?
And also would a PCLS be taken as a percentage from a CETV quoted amount?

Thanks in advance 

Malthusian

Mowzel said:

Guys... just for clarity (and my sanity) is it correct that to take advice and be given a positive outcome on a CETV, you can't pay the IFA charges  from the transferred funds as its now Illegal ?

Not quite. What is banned is charging clients if the advice is to transfer but not charging (or charging less) if the advice to do nothing.

I think (not 100% certain) that if the advice is positive and you go ahead with the adviser's recommendation, you can still pay the fee from the CETV. However, you have to be prepared to pay the same fee out of your own pocket if the advice is negative.

And also would a PCLS be taken as a percentage from a CETV quoted amount?

If you transfer a CETV to a personal pension tax free cash becomes 25% of the fund value.

jamesd

It is permitted to pay out of transferred funds, provided the you can pay in another way if the advice is not to proceed. In the FCA guidance point 3.12 includes this text in the example of good charge disclosure practice:

"If you do transfer, we have assumed you will pay the initial advice charge from the transferred funds when we calculated the ongoing advice charge. It may not always be possible to pay the initial advice charge from transferred funds."

Using the money in the pension and charging only if the advice is to proceed is acceptable where the client would have serious financial difficulty paying for the advice. That does not include not wanting to spend savings, it means things like failing to have paid household bills recently, or being in that sort of position after paying for the advice. in this situation it's acceptable for a firm to charge only if the advice is to proceed and does proceed, so that the charges can be paid out of the pension money. It's also OK if medical conditions, but not lifestyle factors, cause a majority of those with the conditions to have a life expectancy below age 75.

Mowzel

Thanks Malthusian and Jamesd, that's a great help and very much appreciated