Gaining control over my pension

michael1234

I worked for 22 years. My salary at the end was around 600% more than it was at the start. For the first 3 months my tiny pension contributions were paid into what is now called a DB scheme. The remaining 21 years and 9 months the contributions were paid into a DC scheme. Both schemes were administered by the same provider and in fact were the same pension. It was known as a "hybrid" pension.

As you might expect, the DB part of my pension is worth almost nothing but annoyingly it stops me transferring the DC part of the pension (according to the pension providers) because of the DB element. I do have another existing Standard Life DC pension but assume I'd need to pay thousands for advice I don't want in order to move my main pension there?

My only hope is that this issue is tackled by a government in the next few years or I find some other way to get my pension outside its existing provider.

One question I have is are the existing administrators of my pension correct that because of a tiny pension I need to get expensive advice in order to be sure I'm happy losing the "benefit" of a few hundred quid DB pot ? For comparison and I don't want to say exactly but the DC part of this hybrid pension is 6 or 7 figures.

xylophone

I worked for 22 years. My salary at the end was around 600% more than it was at the start. For the first 3 months my tiny pension contributions were paid into what is now called a DB scheme. The remaining 21 years and 9 months the contributions were paid into a DB scheme. Both schemes were administered by the same provider and in fact were the same pension. It was known as a "hybrid" pension.

Typo for DC?

What is the value of the "safeguarded benefits" element of your pension?

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

Hybrid policies 

Pension schemes and policies may include more than one type of benefit, some of which may be safeguarded while others are not.

michael1234

xylophone said:

I worked for 22 years. My salary at the end was around 600% more than it was at the start. For the first 3 months my tiny pension contributions were paid into what is now called a DB scheme. The remaining 21 years and 9 months the contributions were paid into a DB scheme. Both schemes were administered by the same provider and in fact were the same pension. It was known as a "hybrid" pension.

Typo for DC?

What is the value of the "safeguarded benefits" element of your pension?

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

Hybrid policies 

Pension schemes and policies may include more than one type of benefit, some of which may be safeguarded while others are not.

Thanks for spotting that pretty crucial typo which I've now edited out!

I'll check exactly over the weekend but presumably it can't be huge if I'd only paid a small amount into it?

Marcon

michael1234 said:

xylophone said:

I worked for 22 years. My salary at the end was around 600% more than it was at the start. For the first 3 months my tiny pension contributions were paid into what is now called a DB scheme. The remaining 21 years and 9 months the contributions were paid into a DB scheme. Both schemes were administered by the same provider and in fact were the same pension. It was known as a "hybrid" pension.

Typo for DC?

What is the value of the "safeguarded benefits" element of your pension?

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

Hybrid policies 

Pension schemes and policies may include more than one type of benefit, some of which may be safeguarded while others are not.

Thanks for spotting that pretty crucial typo which I've now edited out!

I'll check exactly over the weekend but presumably it can't be huge if I'd only paid a small amount into it?

The amount you paid in isn't the crucial factor in a DB arrangement - your transfer value will include a hefty slug of employer contributions (sufficient to cover the DB promise under the rules of the scheme), so could be higher than you think. Was this actually a DB scheme, or a DB underpin to a DC arrangement (which then had the underpin removed shortly after you joined it)?

Albermarle

To make it simple I will ignore the hybrid part .
If you just had a DB pension and you want to transfer it out to a DC scheme. You have to ask the scheme administrators for a CETV ( Cash equivalent transfer value) If this is over £30K ,you have to go through an expensive advice process and in the end you may well not be able to transfer it anyway ( this is probably the most discussed topic on this forum with numerous threads on the subject) 
As a guideline a DB pension that promises a guaranteed pension of anything more than £1kpa, will most likely have a CETV of over £30K 

michael1234

Many thanks for very helpful contributions so far.

I'm still looking for a textual description of the DB element but the word "underpin" is used a lot and I have once seen an explanation which is something to do with "contracting out of serps" in the 1990s. I'll look for something I can copy/paste verbatim.


The only numbers I can find are the ones below.

Value of Main Account [DB element]
£5047

Value of Main Account [DC element]
A largeish number


GMP Information (within DB section)

Post 5.4.1988 GMP at Date of Exit £54.60

Total GMP at Date of Exit £54.60

Deferred RST Pension at Date of Exit £4,717.44

Post09 Escalating Pension @ DOE £1,474.20

xylophone

Is the situation that there was originally only a DB Scheme which was then changed to a hybrid scheme ?

https://www.pensionsauthority.ie/en/lifecycle/private_pensions/hybrid_pension_schemes/

In the information in your post above, you refer to a GMP - see

https://www.barnett-waddingham.co.uk/comment-insight/blog/what-is-a-gmp/ and re revaluation.


RST relates to the Reference Scheme Test  (covered in the link in my previous) 


and the significance of post 09 pension is that there is a statutory requirement to revalue the deferred pensions of early leavers in line with inflation capped at 5%, and at 2.5% for rights accrued on or after 6 April 2009.

https://www.barnett-waddingham.co.uk/comment-insight/blog/revaluation-for-early-leavers/

All in all it would seem that the value of your safeguarded benefits is likely to be in excess of the £30,000 to which reference is made in the link.

Have you obtained a CETV?

Have you obtained a state pension forecast?

https://www.gov.uk/check-state-pension

Marcon

Albermarle said:

To make it simple I will ignore the hybrid part .
If you just had a DB pension and you want to transfer it out to a DC scheme. You have to ask the scheme administrators for a CETV ( Cash equivalent transfer value) If this is over £30K ,you have to go through an expensive advice process and in the end you may well not be able to transfer it anyway ( this is probably the most discussed topic on this forum with numerous threads on the subject) 
As a guideline a DB pension that promises a guaranteed pension of anything more than £1kpa, will most likely have a CETV of over £30K 

You can.The Pru offers a retail stakeholder (i.e. no adviser required to set one up) which accepts insistent clients.

Application form (it's a retail product, so you can apply direct) https://www.pru.co.uk/pdf/SHPF0342.pdf
Key features document: https://www.pru.co.uk/pdf/SHPK0337.pdf

OP - you'll still need to show the scheme from which you're transferring that you have received advice, but they don't need to see the advice or know what it says. Ditto the Pru as the receiving stakeholder.

xylophone

You can.The Pru offers a retail stakeholder (i.e. no adviser required to set one up) which accepts insistent clients.

Interesting to know that it is still available.

https://forums.moneysavingexpert.com/discussion/comment/78334556/#Comment_78334556

https://forums.moneysavingexpert.com/discussion/comment/77684453/#Comment_77684453

https://forums.moneysavingexpert.com/discussion/comment/78281454/#Comment_78281454

xylophone

Or is it?

https://forums.moneysavingexpert.com/discussion/6301726/confirmed-stakeholder-pension-which-accepts-insistent-clients-and-offers-drawdown#latest

Short of formal confirmation in writing from the Pru, how can one be sure?

michael1234

Many thanks for the answers. Looks like I have a lot more reading to do.

I did have a thought I wonder if a pension is considered an asset then like any other asset can't I dispose of it ? Or in my case, dispose of the part I don't want. It was my understanding I can refuse money from any source and I can close any (in credit) account I own so why not my pension?