Defined benefit transfer woes

Malthusian

Diplodicus said:

How is it that you skew the conversation to say that someone challenging your statement 5k is a reasonable figure for a DB transfer is a troll and a polluter?

The onus is on you to disprove dunstonh's assertion that £5k is a reasonable fee by providing some examples of financial advisers who routinely provide DB transfer advice for less than £5,000. Otherwise you are just misleading the OP and winding up more knowledgeable posters, which is a form of trolling.

tebbins said:

The fact that people are required to pay significant sums of money, to access something that is recognised as their property, is frankly suspicious and I am surprised it has not been quashed in a judicial review.

There is no requirement to pay any money to access a defined benefit pension. You can access it by taking the guaranteed scheme pension in which case no advice is required.

I understand and support the intent behind whatever legislation or rule requires this, however the same effect could be acheived by a free consultation with Pension Wise/Citizen's Advice, setting some required reading/a test etc. It is not beyond the wits of the regulators to come up with a fairer solution.

Free guidance from Pension Wise is nothing like personalised financial advice. But there's nothing stopping anyone from campaigning to the government to change the rules to allow people to transfer out of DB pensions after a free consultation with Pension Wise or Citizens Advice.

I doubt you will have much luck because the problem with that proposal is that people who cashed in their pension funds after a free "advice" session with a Government employee (or government-funded charity, same difference) and left themselves in poverty as a result would blame the Government.

The entire point of the advice requirement is to ensure the Government doesn't get the blame for that and put the advice industry in the firing line instead.

Marcon

tebbins said:

The fact that people are required to pay significant sums of money, to access something that is recognised as their property, is frankly suspicious and I am surprised it has not been quashed in a judicial review.

Judicial reviews don't generally quash things simply because someone doesn't like the fact that a legislative requirement has been implemented.

Diplodicus

Malthusian said:

Diplodicus said:

How is it that you skew the conversation to say that someone challenging your statement 5k is a reasonable figure for a DB transfer is a troll and a polluter?

The onus is on you to disprove dunstonh's assertion that £5k is a reasonable fee by providing some examples of financial advisers who routinely provide DB transfer advice for less than £5,000. Otherwise you are just misleading the OP and winding up more knowledgeable posters, which is a form of trolling.

Lol, Malthusian, there is no such obligation; dunstonh didn't say "average", he said "reasonable" which has altogether kinder implications for those providing the service, the word meaning fair, appropriate, sensible etc. So not something to be disproved. If dunstonh says that's the going rate, I'm sure he is correct. The OP knows my view. I was comparing the cost to something else, but four years of council tax, or four house moves, does make the figure seem significant, I'll admit.. If your agenda is to normalise or diminish the impact of the figure, you would go the other way with the comparison and say the figure works out at 5p for every time dunstonh posts to promote IFAs.

tebbins

IanManc said:

tebbins said:

The fact that people are required to pay significant sums of money, to access something that is recognised as their property, is frankly suspicious and I am surprised it has not been quashed in a judicial review. The financial industry already makes more than enough from managing, advising, consulting, auditing, valuing etc. our pensions without needing to charge that much for even more advice that is clearly not wanted by persons such as the OP (who would be welcome to choose to seek such advice were the requirement to do so removed), and of debatable necessity or value (that obviously varies on a case by case basis).
I understand and support the intent behind whatever legislation or rule requires this, however the same effect could be acheived by a free consultation with Pension Wise/Citizen's Advice, setting some required reading/a test etc. It is not beyond the wits of the regulators to come up with a fairer solution.

The requirement to take advice is a provision of the Pension Schemes Act 1993. Primary legislation made by Parliament cannot be quashed in judicial review proceedings. 

Hm... there have still been ways round primary legislation, and you could argue that the interpretation does not require unreasonable expenses to be incurred to access one's money (it seems to me manifestly absurd that rhe effects of that legislation are that the OP should have to pay ~10% of the CETV, a Pepper v Hart challenge), there is the common law and constitutional precedent that the state should not interfere in a person's property, potential conflicts with the socioeconomic PSEDs under the Equality Act 2010.

Neddyslad

Thank you for all your comments although some went over my head!
They have all helped in some way.
To clarify some points.... the annuity I talked about was the original one offered by the DB pension. If I took the small lump sum and annuity I would have to live to be 90 which is not going to happen. Talking to yet another financial adviser today he admitted his company's fees would be 10 to 15k so 5k would be a good deal!
I think the main problem is the amount in my pot which falls  above the government 30k safety barrier but isn't a huge amount. If I had 200k in it I would leave well alone!
I have other pensions that I am consolidating and it would be nice to add this one as well but we shall see. Thanks again everyone 

Albermarle

If I took the small lump sum and annuity I would have to live to be 90 which is not going to happen.

Are you sure you have calculated this correctly ? Have you fully taken into account that the pension will probably increase with inflation every year ?

Malthusian

tebbins said:

Hm... there have still been ways round primary legislation, and you could argue that the interpretation does not require unreasonable expenses to be incurred to access one's money (it seems to me manifestly absurd that rhe effects of that legislation are that the OP should have to pay ~10% of the CETV, a Pepper v Hart challenge)

No expenses are required to access money in a DB pension. You can just take the DB pension with no additional costs.

, there is the common law and constitutional precedent that the state should not interfere in a person's property, potential conflicts with the socioeconomic PSEDs under the Equality Act 2010.

If restrictions on accessing defined benefit pension funds are against human rights, then the minimum age of 55 to access the funds is illegal. As are the restrictions on how you can invest your pension funds without punitive tax charges (no residential property etc). As was the whole pre-2015 framework of compulsory or near-compulsory annuity purchase, GAD withdrawal rates etc.

If all those restrictions are swept away it will be the end of pensions, because tying up the money until you draw retirement benefits, rather than letting you dip in and out whenever you want, is part of the quid pro quo for the government giving tax relief.

So either tax-relieved registered pensions should never have existed in the first place or there is no conflict between the existence of tax-relieved registered pensions and yooman rights.

I have no idea what Pepper v Hart has to do with it. The outcome of Pepper v Hart is that courts can consult Hansard to clarify the intention of Parliament when they drafted laws. There is no ambiguity over Parliament's intention here. The idea that Parliament's intention was that everyone should cash in their DB pension when they enacted legislation that made that more difficult is delusional.

najan49

Trustees of some DB schemes have discretion to award enhanced benefits in cases of ill health.

Thrugelmir

Diplodicus said:

Malthusian said:

Diplodicus said:

How is it that you skew the conversation to say that someone challenging your statement 5k is a reasonable figure for a DB transfer is a troll and a polluter?

The onus is on you to disprove dunstonh's assertion that £5k is a reasonable fee by providing some examples of financial advisers who routinely provide DB transfer advice for less than £5,000. Otherwise you are just misleading the OP and winding up more knowledgeable posters, which is a form of trolling.

 The OP knows my view. I was comparing the cost to something else, but four years of council tax, or four house moves, does make the figure seem significant, I'll admit..

Normally by people who have never run a business for themselves. Easy to base a view of a complex issue on the most simplistic basis. Not least that the fees charged will include 20% VAT for a start. There's a £1k accounted for straight away.