Need IFA who has authorisation to sign off transfer out of defined benefit scheme

Barney683

Hi

I have two pensions with defined benefits and in both cases the so called "benefit" is of zero value to me. In both cases there is a guaranteed payment of pension to a spouse in the event of my death. I am unmarried and have no need of such a benefit. Neither scheme is in any way a "final salary" scheme; the sole defined benefit is the spousal one mentioned.
 
I tried to exit the schemes a couple of years ago, but had real trouble finding an IFA who had authorisation to signoff exit from a defined benefit scheme. In the end, two advisors who thought they may be able to help were in the end unable to (due to company policy), and by the time this was determined my window for exiting the schemes closed (being open only for a fixed time after making an initial application per withdrawal, permitted once per annum).

I would be very grateful if any IFA who may be able to help could contact me; or if anyone reading this has consulted an IFA in this capacity or knows of one who has the appropriate authorisation.

I should point out that I realise that pension IFAs are required to give the best advice, and that an IFA will not necessarily agree that exiting these schemes is in my best interest! However I'm fairly confident that an IFA will be positively disposed towards recommending exit, given that I now live abroad and wish to switch to a Euro-denominated pension.

Thanks
Barney

Pablo7474

I don’t think a euro pension will make any difference. There are lots of threads on here about DB pensions. 

Out of interest, why isn’t this pension suitable for you? 

dunstonh

I tried to exit the schemes a couple of years ago, but had real trouble finding an IFA who had authorisation to signoff exit from a defined benefit scheme. In the end, two advisors who thought they may be able to help were in the end unable to (due to company policy), and by the time this was determined my window for exiting the schemes closed (being open only for a fixed time after making an initial application per withdrawal, permitted once per annum).

A couple of years ago, it was much easier than it is today.   

DB transfer business has dropped significantly over this year as CETVs have nearly halved.    That is on top of the regulatory and cost issues that saw many firms drop out.     So, you are probably looking closer to 1 in 20 firms being able to provide DB advice.

I should point out that I realise that pension IFAs are required to give the best advice, and that an IFA will not necessarily agree that exiting these schemes is in my best interest! However I'm fairly confident that an IFA will be positively disposed towards recommending exit, given that I now live abroad and wish to switch to a Euro-denominated pension.

This makes things even harder.  It probably only leaves you with a number of firms you can count on one hand.

If you live in the EU and are an EU resident then the vast majority of IFAs will not be able to provide you advice.  Following Brexit, the passporting rules ceased to exist and IFAs would need to operate in the EU (which effectively means having an office and staff in the country you are in or an EU country with passporting permissions to allow the wider EU).   UK based IFAs with no EU permissions cannot offer their services to you.

Albermarle

I have two pensions with defined benefits and in both cases the so called "benefit" is of zero value to me. In both cases there is a guaranteed payment of pension to a spouse in the event of my death. I am unmarried and have no need of such a benefit. Neither scheme is in any way a "final salary" scheme; the sole defined benefit is the spousal one mentioned.
 

Sorry I can not quite follow what you mean here.

The main benefit of a defined benefit pension is the guaranteed pension income, linked in various ways to how much you earned and how many years you worked at the relevant employer.

However you say the only benefit is the Spousal one?

Also you say 'neither scheme is a final salary scheme' What do you mean by that?

Barney683

I don't know how to make it any clearer than I have. Neither is a final salary scheme. The only defined benefit is the (non-existent) spouse being entitled to my pension.

The two IFAs who looked into taking my case were rather surprised by this too. It seems everyone, even IFAs, thinks that a "defined benefit" is the same as a "guaranteed income". I can categorically assure you this is not the case for me. There is absolutely no guaranteed income level in either scheme. But both are classed as having a "defined benefit". 

Pat38493

Barney683 said:

I don't know how to make it any clearer than I have. Neither is a final salary scheme. The only defined benefit is the (non-existent) spouse being entitled to my pension.

The two IFAs who looked into taking my case were rather surprised by this too. It seems everyone, even IFAs, thinks that a "defined benefit" is the same as a "guaranteed income". I can categorically assure you this is not the case for me. There is absolutely no guaranteed income level in either scheme. But both are classed as having a "defined benefit". 

Did you ever pay any money into this scheme or is it something that was provided by your employer directly?

I've never heard of a DB pension scheme that only provided a spouse pension but nothing at all to the actual pension holder.  

Barney683

dunstonh said:

DB transfer business has dropped significantly over this year as CETVs have nearly halved.    

Pretty sure CETVs are not relevant, both schemes told me that the value I could transfer out was the same as the amount of funds I have paid in. These aren't final salary schemes. Both schemes were quite happy for me to take my funds elsewhere - provided I had an IFAs signature on a statement saying that I had received their advice.

I specifically asked if it actually mattered what the IFA's advice was - they said it made no difference what advice the IFA had given me!

given that I now live abroad and wish to switch to a Euro-denominated pension.

This makes things even harder.  It probably only leaves you with a number of firms you can count on one hand.

I'm legally a UK resident still.

Even if this is one firm in 20, I'm still very keen to find one. Do you actually know of any? If not, do you have any advice on how I might locate one?

I'm very grateful for your help!

eskbanker

Barney683 said:

dunstonh said:

DB transfer business has dropped significantly over this year as CETVs have nearly halved.    

Pretty sure CETVs are not relevant, both schemes told me that the value I could transfer out was the same as the amount of funds I have paid in. These aren't final salary schemes. Both schemes were quite happy for me to take my funds elsewhere - provided I had an IFAs signature on a statement saying that I had received their advice.

I specifically asked if it actually mattered what the IFA's advice was - they said it made no difference what advice the IFA had given me!

It makes no difference to the ceding schemes but will make a difference to the receiving ones, as there are few, if any, that will accept 'insistent client' transfers without a positive recommendation from the IFA.

If the value you could transfer out is the same as the amount you've paid in, then this does still sound much more like DC rather than DB, but if there are safeguarded benefits then that triggers the requirement for advice, so perhaps there's a terminology issue at play here?

Pat38493

Barney683 said:

dunstonh said:

DB transfer business has dropped significantly over this year as CETVs have nearly halved.    

Pretty sure CETVs are not relevant, both schemes told me that the value I could transfer out was the same as the amount of funds I have paid in. These aren't final salary schemes. Both schemes were quite happy for me to take my funds elsewhere - provided I had an IFAs signature on a statement saying that I had received their advice.

I specifically asked if it actually mattered what the IFA's advice was - they said it made no difference what advice the IFA had given me!

given that I now live abroad and wish to switch to a Euro-denominated pension.

This makes things even harder.  It probably only leaves you with a number of firms you can count on one hand.

I'm legally a UK resident still.

Even if this is one firm in 20, I'm still very keen to find one. Do you actually know of any? If not, do you have any advice on how I might locate one?

I'm very grateful for your help!

Are these schemes by any chance ones that you paid into for only a relatively short time in the past (e.g. less than 2 years)?

I seem to recall that some DB schemes have a clause that says if you leave before 2 years or suchlike, you can only get back out the amount you paid in at the end?

Dazed_and_C0nfused

I don't know how to make it any clearer than I have. Neither is a final salary scheme. The only defined benefit is the (non-existent) spouse being entitled to my pension.

Personally I don't think that is clear at all 🤔

On one hand you say the only benefit is a pension for your non existent spouse.

Then refer to "my pension".  

Can you ever receive any pension payments from this scheme or not?

xylophone

To be a member of one DB scheme whose only defined benefit is a widow's pension is unusual - to be a member of two DB Schemes with such rules seems extraordinary!

Are you entitled to any benefit from these schemes at scheme normal pension age?