TFLS and pension transfer

sheilanick

I have an old scheme which is invested in with profits funds. According to the company there is no entitlement to a TFLS, although I have to say the didn’t seem entirely sure…
 I am considering to move the funds  on my 65th birthday. Once that is done, will I then be entitled to a TFLS, or do the old scheme rules move with it?

xylophone

I have an old scheme which is invested in with profits funds.

What kind of old scheme?

When did it start?

Do you have the original documents/policy?

dunstonh

there is no entitlement to a TFLS, although I have to say the didn’t seem entirely sure…
 I am planning to move the funds,  to my AJ Bell scheme on my 65th birthday. Once that is done, will I then be entitled to a TFLS, or do the old scheme rules move with it?

If there is no entitlement to pension commencement lump sum then it suggests it is not a conventional personal pension plan.   It could be a hybrid plan from before 1988 (Norwich Union and Friends Prov, in particular, have a lot of those).  Or it could be a section 32 buy out bond with GMP. 

What type of plan is it?

What is the value?

What, if any, safeguarded benefits does it have?

You may not be able to transfer it without an adviser.

Marcon

sheilanick said:

I have an old scheme which is invested in with profits funds. According to Aviva (the third administrator of this old plan) there is no entitlement to a TFLS, although I have to say the didn’t seem entirely sure…
 I am planning to move the funds,  to my AJ Bell scheme on my 65th birthday. Once that is done, will I then be entitled to a TFLS, or do the old scheme rules move with it?

Do the words 'Section 32' or 'buy-out bond' appear anywhere on the paperwork?

Malthusian

The crucial question to ask Aviva is whether there are any "safeguarded rights" (e.g. guaranteed annuity rates or guaranteed pension). If there are it might be a bad idea to move it to AJ Bell, even if doing so creates a right to 25% tax free cash.
As a secondary issue I would ask them to confirm in writing whether there is a TFLS as it does sound like they have given you contradictory information, and if there was a right to a TFLS before, they can't remove that retrospectively.

dunstonh

t is an employee pension scheme, transferred to Friends Provident in 1992, invested in with profits funds. This then became Friends Life and then Aviva

Friends Provident to Friends Life was just a rebrand.   Aviva and Friends Life merged.  Aviva continues to operate the Salisbury office using the same staff and systems.  Just the logo in the corner was changed so far.   So, in reality, the administrators have remained the same.

A transfer in from an "employee pension scheme" in 1992 would suggest it is a section 32 buy out bond.  Sometimes known as transfer plans.  These frequently have GMP and the provider is obliged to meet the GMP even if the fund value is insufficient to meet it (i.e. they have to make up the difference).  If there is a shortfall to provide the GMP, then the PCLS is reduced, potentially to zero.

GMP is a safeguarded benefit.  Hence why you need to ask Aviva if there are any safeguarded benefits.

A plan may generically offer PCLS but it doesn't mean you are entitled to get PCLS.

xylophone

It is an employee pension scheme, transferred to Friends Provident in 1992, invested in with profits funds.

Was the "employee pension scheme" a defined benefit pension scheme?

Was there a GMP?

Are you sure that this is not a S32 policy?

See

https://www.financialadvice.net/s32_buy_out_plan/zone/1288

dunstonh

That confirms it then.  You have a section 32 buy out bond which has GMP.   The fund value is above £30,000.  So you would need an adviser to recommend the transfer.

The fund is now worth, including final bonus of c£80000, giving a current estimated annual income of £1760.

Is that income figure from the projections or the GMP?    Often the projections show the assumptions rather than the GMP.

MallyGirl

An advisor will cost you something like £5,000 if you can find one. You will be liable for the fee whether they recommend the transfer or not. If they don't give a positive recommendation then you won't find anyone who will accept the transfer.
You can probably save yourself a lot of hassle at this point by accepting that this transfer isn't going to happen. A quick search on here for "DB Transfer" will tell you why - your protected rights have the same effect in forcing adviser involvement.

xylophone

Are you female?

current estimated annual income of £1760.

Do you have the figures for pre 88 GMP/post 88 GMP/excess at date of transfer?

If female, when do you reach age 60?

If male, when do you reach age 65?

Have you obtained a State Pension Forecast?

What exactly does it say?

sheilanick

dunstonh said:

That confirms it then.  You have a section 32 buy out bond which has GMP.   The fund value is above £30,000.  So you would need an adviser to recommend the transfer.

The fund is now worth, including final bonus of c£80000, giving a current estimated annual income of £1760.

Is that income figure from the projections or the GMP?    Often the projections show the assumptions rather than the GMP.

It is the projection. None of the paperwork issued has any reference to GMP.