Transfer final salary pension to new DC scheme

GMNN

Dazed_and_C0nfused said:

There isn't usually any penalty, just a actuarial reduction to reflect the fact that the pension would be paid for longer.

Yes, "penalty" was the wrong term to use - I just meant a reduced pension from age 55

Marcon said:

Can start at 55 with some penalties, 60 for full pension I've accrued.

Doubt it. Given that the law will have changed by then, the minimum age for drawing any DB or DC  pension (other than on grounds of ill health) will be at least 57, probably older, unless you have a 'protected pension age' - and it doesn't sound as if you have. 

That's what it is at the moment - I'm fully aware law can change at any point in the next 30 years. Not planning to retire at 55 anyway...

Novice_investor101

I’ve a small DB pension, £3.7k a year last time i asked for a statement. That increases by RPI/CPI (split values pre & post 2012 contributions) or 5%pa. 

i can claim it from age 65, I’m 40 now. 

I see it very much as DB+SP being the bedrock of my retirement income from SP onwards when I’ll likely be less able. My family have a long history of living forever, I’m erring on the side of caution & maintaining the guaranteed income. 

Meanwhile, my DC, LISA, stocks ISA, employee share plans are building nicely to pay for my early retirement & to bridge the gap til DB & SP kick in. 

I have no dependents & i live alone, & don’t envisage that changing. I just like the idea that, at 40, I’ve pretty much guaranteed that I’ll have an old age that won’t be terrible (assuming i manage another 10 years of NI contributions). 

MarkCarnage

Keep the guaranteed part inflation linked for life income stream, which is your annuity. You seem to have ignored the longevity guarantee attached to it in your analysis, and possibly dependants' benefits too. Also it currently has more advantageous LTA treatment. 
 Use the next 30 years to build up a sizeable DC pot. You will then have 2 guaranteed annuities (DB plus State Pension - if it's still there!) plus a more flexible option which you can manage to suit cashflow/tax requirements. 

Albermarle

Yes, I was well aware of the step down moving from a DB to DC pension. New job is close to 40% higher salary, and provides up to 15% employer contribution to DC pension (i.e. I can choose how to allocate this additional 15% between higher salary or pension, but I think I will throw it all into my new pension pot to get it started).

Sounds like an excellent move  . 15% is very good and if it goes in the pension rather than salary then you will not pay any tax on it , so even better .

NotaBene12

DaveT55 said:

So confident that it's the correct things to do that we are at the final stage of transferring my wife's DB pension at the minute on an ICB. Incredible how expensive and difficult it has now become, but there are still avenues to get it over the line.    

May I ask - what are the avenues?

DaveT55

NotaBene12 said:

DaveT55 said:

So confident that it's the correct things to do that we are at the final stage of transferring my wife's DB pension at the minute on an ICB. Incredible how expensive and difficult it has now become, but there are still avenues to get it over the line.    

May I ask - what are the avenues?

There's still some pension experts offering ICB transfers. However, there is only a limited quota they can take on or risk investigation, they won't advertise and it generally requires an intermediary to get you in. The problem is the platform providers allowing transfers without positive recommendations is few and far between (you are left using some very murky platform providers i.e functionality is poor and they aren't household names). I found 2 such providers after carrying out an extensive search a couple of months back. I am not going to name on here as it tends to be the kiss of death.

To give an idea where costs now stand. It's around 15K (4k for advice + %), this will move up or down slightly based on the CETV. I am also led to believe the rules have been tightened yet again in December 2021 over DB transfers.   

It's a total mess.   

DaveT55

PensionAdmin said:

 

Yep rules (ignoring a small sub section of transfer destination) for DB transfers are getting even stricter/more work now, in terms of the DB scheme allowing it and steps a person had to go through, including increasing the ability for the Trustee of the DB scheme to refuse to allow a person to transfer their benefits if certain scam signs are evident in the first place, whereas before it was as simple as statutory right = you have to let them

On the DB side of work and I'm surprised we didn't see any particular uptick in transfer attempts leading up to it to be fair.

Thanks for adding the detail. I didn't know exactly what the changes were. 

Our pension transfer is going through due diligence at present with the DB scheme. Thankfully the CETV deadline was end Nov and all was submitted in time. We have our fingers crossed that all will be processed and new rules will not impact this. I think it would be pretty harsh to apply this retrospectively, but in the world of DB pension transfers nothing surprises us. 

 

Albermarle

The problem is the platform providers allowing transfers without positive recommendations is few and far between (you are left using some very murky platform providers i.e functionality is poor and they aren't household names).

' Murky' would make me nervous .

hyubh

PensionAdmin said:

DaveT55 said:

NotaBene12 said:

DaveT55 said:

So confident that it's the correct things to do that we are at the final stage of transferring my wife's DB pension at the minute on an ICB. Incredible how expensive and difficult it has now become, but there are still avenues to get it over the line.    

May I ask - what are the avenues?

I am also led to believe the rules have been tightened yet again in December 2021 over DB transfers.   

It's a total mess.   

Yep rules (ignoring a small sub section of transfer destination) for DB transfers are getting even stricter/more work now, in terms of the DB scheme allowing it and steps a person had to go through, including increasing the ability for the Trustee of the DB scheme to refuse to allow a person to transfer their benefits if certain scam signs are evident in the first place, whereas before it was as simple as statutory right = you have to let them

Actually prefigured by a series of Pensions Ombudsman rulings culminating in this from 2019:

https://www.pensions-ombudsman.org.uk/sites/default/files/decisions/PO-21489.pdf

The DB administrator issued the 'Scorpion' stuff, the signed declaration on the discharge form was clear and unambiguous, and in handling the IDRP, emphasised the statutory right to transfer meant it ultimately couldn't refuse the transfer request. Yet still it was found against.

DaveT55

Albermarle said:

' Murky' would make me nervous .

Yes, it's squeaky bum time, but for IC's this is the way it is.