Poor pension advice

Mothman

Was this formal written transfer advice which you paid for?

coopsy0

Was this formal written transfer advice which you paid for?

Yes

Marcon

coopsy0 said:

As my plan was not to retire for 18months his advice was to leave it as in his words "the value would only increase the closer I got to 60".  I understand I have not suffered a loss of income from the DB scheme but my plan is to have a larger pension earlier in retirement when I need it most so a DB scheme is not what I require.  At the time the CETV was 960K.  I could have invested this money (understanding the risks) but now I can only invest 700K. Whilst I appreciate that there is no claim as I suffered no actual loss to the DB but it is still far from good advice.  The adviser even said that his advice would have been different if I intended to reire in the next  months.  At the time they were offering over 40x annual pensionable income and now offering 27x.  

The value of your pension is increasing the closer you get to 60. 

Mothman

If you feel you have a strong case with supporting evidence then why not just raise the complaint, nothing to lose. I believe the complaint has to be made to the adviser in the first instance anyway, perhaps others will be able to confirm.

coopsy0

The value of your pension is increasing the closer you get to 60. 

So let me get this right.  My intent is to remove my fund from the DB at some point to allow me to retire early. I dont want a high pension when I'm in my 80s and I want to leave whatever is left to my family when I pass, the DB fund does not allow that.   6 months ago the CETV was 960K and now 6 months I'm closer to 60, the CETV is 690K and that's increasing?????  

sandsy

coopsy0 said:

The value of your pension is increasing the closer you get to 60. 

So let me get this right.  My intent is to remove my fund from the DB at some point to allow me to retire early. I dont want a high pension when I'm in my 80s and I want to leave whatever is left to my family when I pass, the DB fund does not allow that.   6 months ago the CETV was 960K and now 6 months I'm closer to 60, the CETV is 690K and that's increasing?????  

IF the economic assumptions used to calculate the CETV don't change over time, the CETV will increase the closer you get to taking the DB scheme benefits.

In practice, the assumptions used to calculate the CETV change from time to time. This is because the cost to the scheme of providing your benefits is changing as the economic environment changes. So the CETV goes up and down as assumptions change. 

It's not reasonable to expect an adviser to be able to say if the future CETV will be higher or lower. It depends on things like how the scheme is invested and how much it has hedged its investment risks etc.

Albermarle

coopsy0 said:

The value of your pension is increasing the closer you get to 60. 

So let me get this right.  My intent is to remove my fund from the DB at some point to allow me to retire early. I dont want a high pension when I'm in my 80s and I want to leave whatever is left to my family when I pass, the DB fund does not allow that.   6 months ago the CETV was 960K and now 6 months I'm closer to 60, the CETV is 690K and that's increasing?????  

The poster meant that your annual pension from the DB scheme will normally increase the later you take it.

The drop in the CETV is related to changes in the financial markets,that means the DB scheme can meet its obligations at a lower cost. Therefore will offer you a lower CETV to get you out of the scheme.

By the way if you had transferred out the £960K 6 months ago and put it in a DC pension, it would have lost about 20% in value by now ( 10% investment loss and 10% inflation loss) . Many people with DC pensions are sweating that their investments have been  going down/not guaranteed /not inflation linked.
Probably many are wishing they were in a DB scheme...........

[Deleted User]

There is no way you have a claim, unless you left out some key piece of information.

What would you have done with the money, had it been transferred out 6 months ago? Keep in mind that bonds lost value in both nominal and real terms in the exact same way as your CETV and stocks lost value too.

Also curious what provisions your scheme has for increasing payments with inflation.  

Note that many schemes ban transfer out within 12 month of retirement date. 

Sunnylifeover50plan

Albermarle said

By the way if you had transferred out the £960K 6 months ago and put it in a DC pension, it would have lost about 20% in value by now ( 10% investment loss and 10% inflation loss) . Many people with DC pensions are sweating that their investments have been  going down/not guaranteed /not inflation linked.
Probably many are wishing they were in a DB scheme...........

Some of the funds I bought into in Q1 are now in the black by a percent or two. Yes there's inflation but you can't say fund performance would have been 10% down.

Jacklob

https://www.xpsgroup.com/what-we-do/technology-and-trackers/xps-transfer-watch/xps-transfer-value-tracker/

this is very informative.