DB Pension Transfer Advice

Pablo7474

I wonder if DB transfer advice moaners ever consider how lucky they are to have a DB pension. If they started working in the last 20 years they would be in the DC world and nowhere near the level of benefits. 

Thrugelmir

jamesd said:

Advisers can understand such rules and implement them on behalf of their clients, as Guyton's firm does for his.

Don't they charge 1% for the priviledge of doing so. Hope they manage their clients investments well. Easy to talk the talk for PR. 

arty688

Pablo7474 said:

I wonder if DB transfer advice moaners ever consider how lucky they are to have a DB pension. If they started working in the last 20 years they would be in the DC world and nowhere near the level of benefits. 

You could extend that argument to just about any situation people are moaning about. You have to deal with your own situation and what's best for you (whist not disadvantaging other or course).

RoadToRiches

Pablo7474 said:

I wonder if DB transfer advice moaners ever consider how lucky they are to have a DB pension. If they started working in the last 20 years they would be in the DC world and nowhere near the level of benefits. 

And when you tot up your contributions and look at what they are offering as a pay off yes I am :-)

arty688

RoadToRiches said:

Pablo7474 said:

I wonder if DB transfer advice moaners ever consider how lucky they are to have a DB pension. If they started working in the last 20 years they would be in the DC world and nowhere near the level of benefits. 

And when you tot up your contributions and look at what they are offering as a pay off yes I am :-)

Although I have a new statement and my pension has gone up to £2445 and transfer value has gone down to £105.5k

and it says this about GMP

GMP Guaranteed Minimum Pension (GMP) is the minimum guaranteed level of pension, which a pension scheme had to provide to members if they were contracted out of the State Earnings Related Pension Scheme (SERPS) between 6 April 1978 and 5 April 1997. The Lloyds Banking Group case went to the High Court to decide whether GMPs need to be equalised for men and women. The judgment was announced on 26 October 2018 and confirmed that GMP equalisation is required, providing a legal precedent that affects other schemes as well. The Trustee and their advisers are following this issue closely and will work through what it will mean for the Scheme. You do not need to do anything as we will contact any affected members

Whatever that means anyway I think I'll stick with the DB. 

dunstonh

RoadToRiches said:

Pablo7474 said:

I wonder if DB transfer advice moaners ever consider how lucky they are to have a DB pension. If they started working in the last 20 years they would be in the DC world and nowhere near the level of benefits. 

And when you tot up your contributions and look at what they are offering as a pay off yes I am :-)

Even better if it was non-contributory

Malthusian

Pablo7474 said:

I wonder if DB transfer advice moaners ever consider how lucky they are to have a DB pension. If they started working in the last 20 years they would be in the DC world and nowhere near the level of benefits. 

Nowhere near being able to get the same level of inflation-proofed guaranteed income, sure.

But if their employer was paying the same amount of money into a DC pension that they would have had to pay to maintain a DB pension, their members could easily be better off on average. All those actuarial calculations and statutory reports cost money that could have been going into the employees' pensions. DC schemes from employers that used to have a DB scheme often have very high matched contributions as part of the deal struck with the unions.

I have a pet theory that in 40 years' time, millennials' grandchildren will be looking enviously at their grandparents' defined contribution pension funds and moaning about the crappy "collective defined contribution" or "pension ISA" schemes they have to contribute to. You don't know what you got till it's gone, sonny.

RoadToRiches

arty688 said:

RoadToRiches said:

Pablo7474 said:

I wonder if DB transfer advice moaners ever consider how lucky they are to have a DB pension. If they started working in the last 20 years they would be in the DC world and nowhere near the level of benefits. 

And when you tot up your contributions and look at what they are offering as a pay off yes I am :-)

Although I have a new statement and my pension has gone up to £2445 and transfer value has gone down to £105.5k

and it says this about GMP

GMP Guaranteed Minimum Pension (GMP) is the minimum guaranteed level of pension, which a pension scheme had to provide to members if they were contracted out of the State Earnings Related Pension Scheme (SERPS) between 6 April 1978 and 5 April 1997. The Lloyds Banking Group case went to the High Court to decide whether GMPs need to be equalised for men and women. The judgment was announced on 26 October 2018 and confirmed that GMP equalisation is required, providing a legal precedent that affects other schemes as well. The Trustee and their advisers are following this issue closely and will work through what it will mean for the Scheme. You do not need to do anything as we will contact any affected members

Whatever that means anyway I think I'll stick with the DB. 

Yes I have one like this - I will keep this DB, will give me a couple of grand a year hopefully, - worth £1,500 on last review - top up my pension at 60 a little bit :-)

jamesd

Pablo7474 said:

I wonder if DB transfer advice moaners ever consider how lucky they are to have a DB pension. If they started working in the last 20 years they would be in the DC world and nowhere near the level of benefits. 

It's hard to say how much higher the DC benefits would be but substantially is likely. We've had very favourable conditions overall through out most of the last twenty years. Assuming even reasonably comparable total employer plus employee contribution rate else it's just "employers who pay more pay more in benefits too".

Big drop with modest recovery speed early on, the dot-com crash, made buying in during in the early year quite inexpensive.
2008 was short, reaching minimum in early 2009 and being a bull market from then until...
the short covid crash of 2020
and more bull market since

DB look better in more troubled markets, not in what could reasonably be described as a twenty year bull run with some blips along the way.

There's merit to your point but in recent times it's fairly hard to find truly horrible twenty year periods for global equities and you can't go back more than about twenty years and still have personal pensions as a product that can be used.

Pablo7474

You really think DC benefits would be higher? Many DB members are non contributory and end up with half pay or a CETV circa 30-40 times. DC would be much less surely?