CETV - DB Transfer

Altior

Yes yet another thread on this topic !

My scenario is that due to the rerating of markets I requested the latest CETV for a modest DB pension I have. It wouldn't even cover my monthly CT bill in today's values.

Quite unbelievably, it has come through as £30,036.50 !

Obviously, it is right on the bubble, and £36.51 is completely immaterial. But I would like this pension transferred so I can control how it invested, and indeed have flexibility.

I appreciate that a threshold has to be applied somehow. But it would be absurd to require regulated advice for such a tiny sum, even if it was possible. It also has not shifted as all with inflation. Is there any scope for common sense to be applied here at all? I am obviously quite happy to take the flat £30K if the transfer is enabled. 

The valuation has come from Mercer. 

Dazed_and_C0nfused

Why do you think the legislation can be ignored for you?

Irrespective of that how much would you be hoping to actually receive if a transfer, from a pension many can only dream of, were to happen?

It also has not shifted as all with inflation

What do the scheme rules say about inflation/annual revaluation?  It's not unusual for posters in this sort of situation to have failed to properly understand the actual pension they will be entitled to.

Tommyjw

The only thing you can do is (if they allow it, which not all will) pay for a new transfer value each month and see if it falls under £30k at some point

Altior

Why? I'm hoping against hope that some common sense can be applied. Nobody in their right mind thinks that this tiny tiny amount is the real difference between regulated advice being required or not. I also acknowledge that there has to be a threshold, and wherever it is set, someone or people will fall on the bubble. 

The ideal world would be that I could negotiate with Mercer to nudge the valuation down a few quid. Which is a nominal benefit to the pension provider, not me. 
 
The threshold for regulated advice in regard to CETV has not shifted with the true value of money. I believe this was created in 2015, and was £30K then. £30K now in real terms is a lot less than £30K 8 years ago.

hyubh

Altior said:

I also acknowledge that there has to be a threshold, and wherever is is set, someone or people will fall on the bubble.  

Exactly...!

The ideal world would be that I could negotiate with Mercer to nudge the valuation down a few quid. Which is a nominal benefit to the pension provider, not me.

Mercer are just the third party administrators though - even if this were possible, it's not in their interest to make transfer out cases potentially involve a haggling stage, liaising back and forth between member and trustee...

The threshold for regulated advice in regard to CETV has not shifted with the true value of money. I believe this was created in 2015, and was £30K then. £30K now in real terms is a lot less than £30K 8 years ago

Complain to your MP! 

QrizB

Altior said:

My scenario is that due to the rerating of markets I requested the latest CETV for a modest DB pension I have. It wouldn't even cover my monthly CT bill in today's values.

My CT is almost £200 a month, £2400 a year. Exactly how much is your DB worth?

Altior said:

Quite unbelievably, it has come through as £30,036.50 !

I wouldn't surrender £200/mo for a £30k lump sum.

Altior

It's £122 pcm, only partially index linked. 

Dazed_and_C0nfused

Altior said:

It's £122 pcm, only partially index linked. 

And is that the value when it was deferred or the value with the partial index linking applied sij e deferment?

How is partially index linked?  Cap on the rate or is pension split into different section?

Does it have an automatic PCLS?

Altior

That's the current value in today's pricing. It's partially linked because some of it is capped at a lower rate. iirc some is 2.5% and some is 5%. No PCLS enhancement, the commutation is poor, a factor something like 9.

Altior

Notable perhaps that this was valued at £53.5K at some point last year. Yet the system considers that the value was too high for me to make that decision all on my own, and effectively impossible to get positive regulated advice, at a massive cost to myself. Yet now it is half of what it would have been had I not been protected from myself. If only it had been just that little bit worse!

On 3rd April this year it was valued at £31,290. I was quite hopeful that it had crept below the threshold. Adding to the complication slightly is that the liabilities are now looked after by an insurance company, so I can no longer obtain an online valuation, and I believe can't get another formal one now for 12 months unless I pay for it! 

Marcon

Altior said:

Why? I'm hoping against hope that some common sense can be applied. Nobody in their right mind thinks that this tiny tiny amount is the real difference between regulated advice being required or not. 

Why would the pension scheme trustees think that ignoring legislation, and laying themselves open to a claim which is guaranteed to succeed (because they've breached legislation) is somehow 'common sense'? 

Altior said:

I also acknowledge that there has to be a threshold, and wherever it is set, someone or people will fall on the bubble. 

If you acknowledge that why do you think the trustees are going to try and  instruct their administrators to ignore the legislation?

Altior said:

The threshold for regulated advice in regard to CETV has not shifted with the true value of money. I believe this was created in 2015, and was £30K then. £30K now in real terms is a lot less than £30K 8 years ago.

Except transfer values don't follow 'real terms' money....