Losing guaranteed benefits from a pension transfer

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Would my Vanguard SIPP have an underpin in place? 

No. 

 Read information in my previous concerning the "reference scheme test".

I googled MP03 (as mentioned in your screenshot above) - this appears to refer to the Money Purchase 2003 Section of the  Pearson Pension Plan.

The scheme  seems to have been a "hybrid" contracted out mixed benefit scheme up to 2016 (when contracting out ended for DB  ( element of DB) pension schemes.

From About the Plan

 The Plan was contracted out of the State Second Pension on the reference scheme test basis up to

5 April 2016 (ECON E3806857Y, SCON S0607419Q). 

This means that the Plan has to provide you with a minimum level of pension. If your Pension Pot at retirement provides less than the minimum level, the Plan will pay a top-up to ensure the correct level of pension is paid. In this case, you will not be eligible to take early retirement and your retirement options from age 62 will not include tax-free cash.

Guaranteed Minimum Pension (GMP) is preserved in the Plan for members with benefits accrued before 6 April 1997. 

Benefits post 17 May 1990 have been equalised. 

The Plan is not a member of a transfer club. 

Manage your account online

You can manage your Pension Pot online through the Aviva website: www.aviva.co.uk/membersite 

You can use the site to: 

• view the current investment fund values

• view the investment funds’ performance records

• switch funds and/or redirect contributions

• access the pension calculator to help with planning

Death benefits for deferred

members

Spouse’s/Civil partner’s pension 

A spouse’s/civil partner’s pension is payable in accordance with any contracting out requirements. 

Lump sum 

A lump sum is payable equal to the value of your contributions, plus interest, less the cost of providing the spouse’s/civil partner’s pension. This may result in no lump sum being payable. 

Children’s pension 

Children’s pensions are purchased with the remaining value of your Pension Pot, if any, after any lump sum and spouse’s/civil partner’s pension has been paid. 

Awarded for the

Plan’s Money Purchase

2003 section

TPPP17_MP2003GI_

Clearly you were a member of the scheme before 6/4/2016.

Aviva seems to have become involved with the Scheme in 2017.

https://www.aviva.co.uk/business/workplace-pensions/corporate/defined-benefit-solutions/pearson-pension-plan/

The DB benefit part of your Money Purchase (DC) scheme remained protected after the buy in.

shoe_dog

So a bit of an update on this following a recent correspondence...

According to the Pearson Pension Plan, when I left the company the pension plan was set up with, my RST at date of leaving in 2001 was £126.06 per year. At current date, this is worth £200.94 per year (not including any reduction for early retirement or increase for late retirement).

The fund is currently valued at £3,173.09. The guaranteed transfer value including the top-up required to meet the RST is £5,180.52.

The Pearson Pension Plan is invested in the BlackRock 60:40 Global Equity Index, i haven't been contributing anything to it since i left the company in 2001 and haven't planned to contribute any more. 

I want to transfer the total fund value (including the £2007.43 RST top-up) over to my current Vanguard SIPP that i do contribute to monthly and which is invested in the Vanguard Global All Cap Index Acc (yes, the markets are a disaster right now but i'm 20+ years away from retirement).

So... is the value of the transfer including the top-up and the chance to add just over £5k to my current SIPP that i'm actively contributing £1250 a month to with 20+ years to go better than leaving the Pearson Plan where it is without any further contributions to it?

Ultimately do i transfer or not?

I've taken some advice from an IFA but i'd be interested to hear some other opinions.

Albermarle

I want to transfer the total fund value (including the £2007.43 RST top-up) over to my current Vanguard SIPP that i do contribute to monthly and which is invested in the Vanguard Global All Cap Index Acc (yes, the markets are a disaster right now but i'm 20+ years away from retirement).

The markets are not a disaster. They are in negative territory in 2022 but this happens on a regular basis, and often much worse than we are seeing at the moment. In any case you are thinking about moving from one investment to another, so whether the markets are up or down will make no/little difference.

've taken some advice from an IFA but i'd be interested to hear some other opinions.

Unusual for an IFA to be interested in advising on such relatively small amounts of money. Did you have to pay ?

shoe_dog

Albermarle said:

Unusual for an IFA to be interested in advising on such relatively small amounts of money. Did you have to pay ?

No, it was an advisor i met through Unbiased who i had a free initial consultation with a few months back about various areas of personal finance, when this long-forgotten pension suddenly turned up he was happy to offer a bit of advice over email for free.

dunstonh

(yes, the markets are a disaster right now but i'm 20+ years away from retirement).

Markets are not a disaster.  The current drop levels are minor and a typical portfolio hasn't lost enough to be classed as a crash.    So, not even close to emotional phrases like disaster.

my current Vanguard SIPP that i do contribute to monthly and which is invested in the Vanguard Global All Cap Index Acc

That is too high risk for someone that thinks the current loss levels are a disaster.   That fund can lose around 3 times more than the current levels in a loss period.         What word would use if your value had gone down three times greater than the current amount?      And it's not hypothetical.   In the last 25 years, it would have suffered 3 periods in excess of 35% unlike the circa 15% currently suffered.   Plus, several more in excess of 20%.

shoe_dog

dunstonh said:

(yes, the markets are a disaster right now but i'm 20+ years away from retirement).

Markets are not a disaster.  The current drop levels are minor and a typical portfolio hasn't lost enough to be classed as a crash.    So, not even close to emotional phrases like disaster.

my current Vanguard SIPP that i do contribute to monthly and which is invested in the Vanguard Global All Cap Index Acc

That is too high risk for someone that thinks the current loss levels are a disaster.   That fund can lose around 3 times more than the current levels in a loss period.         What word would use if your value had gone down three times greater than the current amount?      And it's not hypothetical.   In the last 25 years, it would have suffered 3 periods in excess of 35% unlike the circa 15% currently suffered.   Plus, several more in excess of 20%.

Let's ignore 'disaster', a poor choice of words. I only brought it up as share prices being 'on the floor' was mentioned earlier in the thread and i wanted to emphasise the fact that i'm okay with the current market situation and don't wish it to detract from the original question i was asking.

I know full well my funds have the potential to lose far beyond what we're seeing now, and again, i'm comfortable with that otherwise i wouldn't have opted for a 100% equity strategy. Call it blind optimism but everything i've read to date suggests 20+ years is enough time to recover. I will also de-risk accordingly when the time is right.