DC Pension with GMP underpin

simpleidiot

Hi,

Found this forum 6 months ago and I have  found it a great source of information.

I am planning on retiring in May next year after maxing out my pension contribution for the next fiancial year, this will take me over LTA assuming no crash. Over the last 5 years i have slowly being transferring all the various company pensions into two SIPPS  Fidelity & II , i plan to hold most in II to minimise charges.

But i have 1 pension, its a simple DC with a GMP underpin that  I have been unable to transfer, so to my question

The underpin 2 years ago was 8.5k, i have been unable to get a new figure (asked over a month ago), as pension administrator has recently changed to Mercer.

Does the underpin == safeguarded benifits ?, and hence the 30k level i would need to get finacial advice before i can transfer ?

Pension is small  ~ 65k, its simply not worth involving an advisor, especially if its just the 8.5k thats stopping the transfer.

So found out, Fidelity wont accept a transfer with GMP, they did kindly offer their advice services, which would be 4k.

On II site it states, they wont accept a pension > 30k that has GMP without advice, even if GMP value is small.

So is my assumption correct that i dont technically need advice ?, and will any SIPPs transfer a pension that has a small GMP but is over 30K without advice?

TIA

xylophone

A GMP is a safeguarded benefit.


A hybrid pension scheme?

https://helpfiles.thepensionsregulator.gov.uk/members/hybriddetails/

How exactly does the underpin operate? 


Will it pay you the greater of (i) the annuity that could be bought with your DC pot

or

(ii) your DB contracted out benefit (GMP for benefits accrued before 6 April 1997 or Section 9(2b) rights for benefits accrued after 5 April 1997).

You mention  £8,500 in connection with the GMP.

What exactly does this represent?

QrizB

simpleidiot said:

The underpin 2 years ago was 8.5k ... Pension is small  ~ 65k

If you're saying that the pension is guaranteed to pay out £8.5k pa at NPA but only has a transfer value of £65k, I think you'd be mad to move it.

Even if the £8.5k is flat (ie. never increases with inflation) it's worth ~£120k to you.

Bimbly

simpleidiot 

I am planning on retiring in May next year after maxing out my pension contribution for the next fiancial year, this will take me over LTA assuming no crash. 

Are you aware the LTA is due to be abolished in April?

simpleidiot

Thanks for replies and apologies for delay in responding, as it always annoys me when posters ask a quesion and dissapear

Yes i know the LTA has in theory been removed, though no idea what labour will do when they get in power. I was going to retire this year, but with LTA and AA changes, i decided to work another year.

It is not a hybrid pension scheme, it is a simple DC scheme that has a GMP element

The underpin i believe is money allocated (from my pot ie 65k - 8.5k) to buy a guarenteed anuity, it will pay me ~£400 per year (this was the last figure i had). I believe i was opted out of SERPS for this pension hence the pension scheme must guarentee a certain amount. But it is effectively a blocker at moment to transferring.

This old pension doesnt not support drawdown, so i need to transfer it anyway. I read in an earlier thread they were looking at partial transfer, and just leaving GMP underpin intact. I may need to look at that option

So no one has answered my question

Is my assumption correct that i dont technically need advice ?, as safeguarded benifits are under 30k even though total is 65k

Is there any SIPPs pension companies that would transfer a DC pension with GMP without insisting on advice

xylophone

The underpin i believe is money allocated (from my pot ie 65k - 8.5k) to buy a guarenteed anuity, it will pay me ~£400 per year (this was the last figure i had). I believe i was opted out of SERPS for this pension hence the pension scheme must guarentee a certain amount. 

Are you absolutely certain that you understand the nature of this scheme?

Are you saying that this was a  workplace contracted out money purchase scheme?

https://techzone.abrdn.com/public/pensions/Tech-guide-contracting-out#:~:text=with the test.-,Contracted out money purchase (COMP),of the Additional State Pension. 

If so, is it possible that what you had were "protected rights" which have now become ordinary benefits so that "safeguarded benefit" rules do not apply?

Have you checked your precise situation with the Administrator?

Should you not raise a query as to whether you have a "safeguarded benefit" and if so what the value of that benefit is?

dunstonh

Does the plan have an underpin or not?   You have used the word underpin several times but it sounds like you are referring to the GMP rather than an underpin.

simpleidiot

Sorry managed to forget my password

I have very limited documentation for this old pension, it must be about 25 years ago, and i have just left it alone.

It is definitely a DC (or money purchase scheme), which i was opted out of SERPS, and it stated  i have a GMP underpin that was valued at 8.5k some years ago.

I will bring this thread to a close, as its not going anywhere, plus i have found the answers myself

Mercer have acknowledged i don't need advice to transfer my pension as the GMP element is less than 30K.

I contacted 3 SIPPs, 1 would still insist i take advice if i transferred to them, 1 said no i don't need advice and 1 hasn't replied yet

So I have just started the process of transferring my DC (with GMP)

thanks again