Dads pension- Transferring and Basic Qs

Khaderbhai

Hi

Need to help my dad with his pensions (approx 8). I have a few questions below if you could please help.

- Can I act on his behalf (with his permission) so that I can arrange to transfer some of the smaller ones etc? If so, is it usually some sort of form needed to get me added, and would that be with every provider?

- Some are final salary pensions, my knowledge on those is limited. Could you ‘transfer’ those or would that make no sense? I would assume it may be best to keep those until retirement date. 

Thank you in advance.

p00hsticks

Khaderbhai said:

- Some are final salary pensions, my knowledge on those is limited. Could you ‘transfer’ those or would that make no sense? I would assume it may be best to keep those until retirement date. 

With regard to Defined Benefit (Final Salary)  pensions, your father would need to ask what the 'Cash Equivalent Transfer Value' (CETV) is for each one.  If it is more than £30,000, then there is a legal requirement for him to obtain financial advice (at his expense) before being able to transfer. If the advice is that a transfer would not be in his best  interest, then if he wished to go ahead he would become  an 'insistent client; and the number of schemes that would accept him as such would be severely limited. 

Linton

As your knowledge of pensions seems somewhat limited I would suggest that you be very careful about giving advice to your father - there can be many complications and opportunities to make poor decisions.  If the total pot size is sufficiently high it would be more sensible for him to pay for regulated advice from an Independent Financial Advisor (IFA). The "I" is essential.

Khaderbhai

Thanks for your responses. 

The aim is to A simply find out how much he will have come retirement age and B transfer the smaller pots into one for ease of admin. Out of of the 8, 6 are small pots as he has had multiple jobs the last 10-15 years, the other 2 are Defined Benefit so will be left alone but I will look at that CETV advice. 

r6mile

In my experience DC pension transfers are quite straightforward, you will need the reference number for each pension and the approximate value, and the provider you are looking to transfer into will do all the work. You may wish to transfer them into a Self Invested Personal Pension with a provider such as Vanguard - and they will consolidate everything.

As for Defined Benefit pensions as you say it's probably best to leave them where they are.

Marcon

Khaderbhai said:

Thanks for your responses. 

The aim is to A simply find out how much he will have come retirement age and B transfer the smaller pots into one for ease of admin. Out of of the 8, 6 are small pots as he has had multiple jobs the last 10-15 years, the other 2 are Defined Benefit so will be left alone but I will look at that CETV advice. 

Getting a CETV quote for a DB pension isn't particularly helpful in terms of working out what your father will have come retirement. The value of the CETV doesn't matter, because the scheme promises certain benefits (hence being known as a 'defined benefit' scheme!), and that's the key point.

As others have already said, transferring out of a DB scheme is rarely a good idea, and if the advice is not to transfer - which it probably will be - then a stakeholder pension is currently the only type of scheme which will accept the transfer regardless, simply because there is a legal requirement for a stakeholder pension to accept a transfer from any UK registered pension scheme.

Albermarle

Can I act on his behalf (with his permission) so that I can arrange to transfer some of the smaller ones etc? If so, is it usually some sort of form needed to get me added, and would that be with every provider?

I suspect some will ask if you have Power of Attorney for your Dad. Some may just ask to speak to him to make sure he is OK with you helping him.

In reality non DB pensions transfers are mainly all done on line nowadays, so you could maybe just help him to do this.

LHW99

How close is your dad to retirement? Does he have an autoenrollment pension that he is currently paying in to. as this could be a good place to transfer any of the pensions that are not DB (ie the ones that are DC - direct contribution)

Khaderbhai

Approx 4 years. Yes he does with current employer. Makes sense on the DC pots, on the DB ones though, he has kept a lot of paperwork. I have a statement of preserved benefit entitlement which has a projected annual income on, is this projected amount usually accurate? I also have a personal benefit statement for the other, again this has a final pensionable salary on, is this accurate? 

I can post these with the personal details redacted if it helps.

thanks

Silvertabby

Have you checked the payment dates of the DB pensions?  If they are old schemes they may be payable from 60 or 65, not necessarily SPA.

LHW99

Khaderbhai said:

Approx 4 years. Yes he does with current employer. Makes sense on the DC pots, on the DB ones though, he has kept a lot of paperwork. I have a statement of preserved benefit entitlement which has a projected annual income on, is this projected amount usually accurate? I also have a personal benefit statement for the other, again this has a final pensionable salary on, is this accurate? 

I can post these with the personal details redacted if it helps.

thanks

As said, unless the DB pensions are very small, it would be costly to arrange for the required advice, which would probably be no in any case. Apart from ensuring all the DB schemes have his up to date address, it shouldn't be too onerous to have several. It just means there would be several forms to put them into payment rather than one. Once in payment, it would just be a case of updating any contact details when required.

Putting all the DC funds into his current pension would be a simple solution. Although it could be worth checking the charges on them all, and using the one with lowest charges to consolidate the old ones into, and transferring the current one to that when he wants to retire fully.

One caveat on that may be that some old DC-type pensions don't allow all the modern options, so depending on what he wants at retirement (annuity, drawdown, TFLS only....) he may need to open a modern plan and transfer all the DC's into that.