Being forced to use a Financial Advisor to transfer pension to pension.

Pat38493

scoobyjones1 said:

xylophone said:

Would an IFA be able to count it in favour of a transfer if the person does not need the money?  If the person has way more pension than they will ever need, could that be a reason to recommend transfer,

https://www.fca.org.uk/consumers/pension-transfer-defined-benefit

Who is best suited to a transfer

Under certain circumstances, a transfer may be suitable for your needs if:

• you won’t rely only on your DB scheme to meet your income needs but will have other sources of retirement income

Yes!! That's exactly what I have been trying to get across on here. A transfer is what she wants, based on good reasoning and previous experience. She managed some big companies. Some of the derisory comments on here have been a shock. Had to "ignore" a few people.
I am so glad you and a few others are beginning to see it...
Thanks for the link. There's a beer in the post ;-)

to be clear though - the advice will still cost £5K or more even if it ends up being a positive recommendation for the above reason or other reasons.  

Silvertabby

scoobyjones1 said:

Silvertabby said:

scoobyjones1 said:

Hoenir said:

scoobyjones1 said:

Mutton_Geoff said:

Interesting thread but I can't help thinking the OP and his wife probably have other pensions in addition to their two state pensions so money is not an issue. Even if their only other income was state pension, this locked in DB scheme is only due to pay 10% of their pension income. In reality with other pension income, it's likely to be a tiny fraction. Why get so concerned that the financial industry is out to screw you when you could just leave it as it is, pop the monthly income from the DB into a savings account and use it as your holiday fund.

You won't be able to convince the government to let you transfer the state pension so you're already going to have multiple income sources in retirement, why not just relax and enjoy them? I can't believe there are 18 pages of bubble about a £2k pension.

The DB fund in question has no death benefits. So say she is knocked down by a bus (we nearly were, yesterday!) the pension would die with her. 

Normally there's a dependents benefit payable. 

Not in this case I'm afraid. This was an old pension for a now non existent firm, the new company took over the pension scheme...so maybe it's down to that....I don't know. The paperwork she has been given states clearly the Death Benefit to spouse or other as 0.00%

All pre 1988 service?  If so, that's the case for all public sector women's pensions, and probably private DB schemes as well.

Yes I think she joined the scheme in 86 and left, end March, 88. No death benefit. Not good eh?

No, no death benefit.  If she had left at the end of April 1988 her widower's benefit would have been based on her service from 1 April 1988 only, and so would have been minimal.  

scoobyjones1

Silvertabby said:

scoobyjones1 said:

Silvertabby said:

scoobyjones1 said:

Hoenir said:

scoobyjones1 said:

Mutton_Geoff said:

Interesting thread but I can't help thinking the OP and his wife probably have other pensions in addition to their two state pensions so money is not an issue. Even if their only other income was state pension, this locked in DB scheme is only due to pay 10% of their pension income. In reality with other pension income, it's likely to be a tiny fraction. Why get so concerned that the financial industry is out to screw you when you could just leave it as it is, pop the monthly income from the DB into a savings account and use it as your holiday fund.

You won't be able to convince the government to let you transfer the state pension so you're already going to have multiple income sources in retirement, why not just relax and enjoy them? I can't believe there are 18 pages of bubble about a £2k pension.

The DB fund in question has no death benefits. So say she is knocked down by a bus (we nearly were, yesterday!) the pension would die with her. 

Normally there's a dependents benefit payable. 

Not in this case I'm afraid. This was an old pension for a now non existent firm, the new company took over the pension scheme...so maybe it's down to that....I don't know. The paperwork she has been given states clearly the Death Benefit to spouse or other as 0.00%

All pre 1988 service?  If so, that's the case for all public sector women's pensions, and probably private DB schemes as well.

Yes I think she joined the scheme in 86 and left, end March, 88. No death benefit. Not good eh?

No, no death benefit.  If she had left at the end of April 1988 her widower's benefit would have been based on her service from 1 April 1988 only, and so would have been minimal.  

How times have changed. That would not be acceptable today.

Silvertabby

scoobyjones1 said:

Silvertabby said:

scoobyjones1 said:

Silvertabby said:

scoobyjones1 said:

Hoenir said:

scoobyjones1 said:

Mutton_Geoff said:

Interesting thread but I can't help thinking the OP and his wife probably have other pensions in addition to their two state pensions so money is not an issue. Even if their only other income was state pension, this locked in DB scheme is only due to pay 10% of their pension income. In reality with other pension income, it's likely to be a tiny fraction. Why get so concerned that the financial industry is out to screw you when you could just leave it as it is, pop the monthly income from the DB into a savings account and use it as your holiday fund.

You won't be able to convince the government to let you transfer the state pension so you're already going to have multiple income sources in retirement, why not just relax and enjoy them? I can't believe there are 18 pages of bubble about a £2k pension.

The DB fund in question has no death benefits. So say she is knocked down by a bus (we nearly were, yesterday!) the pension would die with her. 

Normally there's a dependents benefit payable. 

Not in this case I'm afraid. This was an old pension for a now non existent firm, the new company took over the pension scheme...so maybe it's down to that....I don't know. The paperwork she has been given states clearly the Death Benefit to spouse or other as 0.00%

All pre 1988 service?  If so, that's the case for all public sector women's pensions, and probably private DB schemes as well.

Yes I think she joined the scheme in 86 and left, end March, 88. No death benefit. Not good eh?

No, no death benefit.  If she had left at the end of April 1988 her widower's benefit would have been based on her service from 1 April 1988 only, and so would have been minimal.  

How times have changed. That would not be acceptable today.

The rationale was that married women didn't want/need to pay for widower's benefits because their husbands were expected to have their own pensions.  And single women didn't need widower's pensions full stop.

When the rules changed, in April 1988, active pension scheme members were given the option of making extra contributions in order to convert their pre 1988 service to widower's pension terms.  But, if the LGPS was anything to go by, very few did this due to the high cost.  

The rules changed again in 1997, making ALL service widower's pensionable at no extra cost, but the new rules weren't made retrospective and so only applied to women who were active scheme members at the date of change.

There are still some quirks.  ie, someone with pre 1988 service who left,  then who returned at a later date but opted NOT to join their records together, would only have their spouse's benefits based on their latter service.

And, in the case of a post retirement marriage, only post 1988 service counts, whereas a male's widows pension would count from 1978.

scoobyjones1

Silvertabby said:

scoobyjones1 said:

Silvertabby said:

scoobyjones1 said:

Silvertabby said:

scoobyjones1 said:

Hoenir said:

scoobyjones1 said:

Mutton_Geoff said:

Interesting thread but I can't help thinking the OP and his wife probably have other pensions in addition to their two state pensions so money is not an issue. Even if their only other income was state pension, this locked in DB scheme is only due to pay 10% of their pension income. In reality with other pension income, it's likely to be a tiny fraction. Why get so concerned that the financial industry is out to screw you when you could just leave it as it is, pop the monthly income from the DB into a savings account and use it as your holiday fund.

You won't be able to convince the government to let you transfer the state pension so you're already going to have multiple income sources in retirement, why not just relax and enjoy them? I can't believe there are 18 pages of bubble about a £2k pension.

The DB fund in question has no death benefits. So say she is knocked down by a bus (we nearly were, yesterday!) the pension would die with her. 

Normally there's a dependents benefit payable. 

Not in this case I'm afraid. This was an old pension for a now non existent firm, the new company took over the pension scheme...so maybe it's down to that....I don't know. The paperwork she has been given states clearly the Death Benefit to spouse or other as 0.00%

All pre 1988 service?  If so, that's the case for all public sector women's pensions, and probably private DB schemes as well.

Yes I think she joined the scheme in 86 and left, end March, 88. No death benefit. Not good eh?

No, no death benefit.  If she had left at the end of April 1988 her widower's benefit would have been based on her service from 1 April 1988 only, and so would have been minimal.  

How times have changed. That would not be acceptable today.

The rationale was that married women didn't want/need to pay for widower's benefits because their husbands were expected to have their own pensions.  And single women didn't need widower's pensions full stop.

When the rules changed, in April 1988, active pension scheme members were given the option of making extra contributions in order to convert their pre 1988 service to widower's pension terms.  But, if the LGPS was anything to go by, very few did this due to the high cost.  

The rules changed again in 1997, making ALL service widower's pensionable at no extra cost, but the new rules weren't made retrospective and so only applied to women who were active scheme members at the date of change.

There are still some quirks.  ie, someone with pre 1988 service who left,  then who returned at a later date but opted NOT to join their records together, would only have their spouse's benefits based on their latter service.

And, in the case of a post retirement marriage, only post 1988 service counts, whereas a male's widows pension would count from 1978.

Interesting, sounds almost Dickensian! My life left the firm, or the business was taken over on the last day of March 88 according to their records so she would not have even been given the option to make extra contributions. As you say she most likely would not have been able to afford to anyway, at her young age back then. 

scoobyjones1

First IFA / PTS quote received. They want 5% of the CETV, so £3000 in this case. That's for the advice/work as they called it and no idea if they would approve the transfer or not. So could be money wasted. At least that would satisfy the DB holder that she had taken the correct advice and maybe then she could transfer into a stakeholder pension. However she is pretty adamant that £3k is way too much to pay...and they also said they would need 40 days. We will keep looking.

MeteredOut

scoobyjones1 said:

First IFA / PTS quote received. They want 5% of the CETV, so £3000 in this case. That's for the advice/work as they called it and no idea if they would approve the transfer or not. So could be money wasted. At least that would satisfy the DB holder that she had taken the correct advice and maybe then she could transfer into a stakeholder pension. However she is pretty adamant that £3k is way too much to pay...and they also said they would need 40 days. We will keep looking.

Thanks for coming back with quotes - I'm sure this will be of interest to many others.

What I don't get (and if I was in your position, would probably preclude me from choosing this IFA) is why is the cost a % of CETV. Would the advice be any less time consuming/complex/risky/difficult if it was a £40K CETV?

scoobyjones1

MeteredOut said:

scoobyjones1 said:

First IFA / PTS quote received. They want 5% of the CETV, so £3000 in this case. That's for the advice/work as they called it and no idea if they would approve the transfer or not. So could be money wasted. At least that would satisfy the DB holder that she had taken the correct advice and maybe then she could transfer into a stakeholder pension. However she is pretty adamant that £3k is way too much to pay...and they also said they would need 40 days. We will keep looking.

Thanks for coming back with quotes - I'm sure this will be of interest to many others.

What I don't get (and if I was in your position, would probably preclude me from choosing this IFA) is why is the cost a % of CETV. Would the advice be any less time consuming/complex/risky/difficult if it was a £40K CETV?

Because they have got you over a barrel! 
We feel the same way, the amount of work can not be that much as we have all of the data, paperwork and SIPP forecasts ready and prepared. I suppose they might say that they have to be insured to the value of the liability (again, why... if they advise against?) and he did kindly say the 5% would be capped at a very reasonable £162,500 ! Merry Xmas!

HappyHarry

scoobyjones1 said:

First IFA / PTS quote received. They want 5% of the CETV, so £3000 in this case. That's for the advice/work as they called it and no idea if they would approve the transfer or not. So could be money wasted. At least that would satisfy the DB holder that she had taken the correct advice and maybe then she could transfer into a stakeholder pension. However she is pretty adamant that £3k is way too much to pay...and they also said they would need 40 days. We will keep looking.

I think your wife may be disappointed if she is hoping for DB transfer advice for under £3000. That cost is lower than should be expected. 

40 days would be a long time if the IFA had all the required information on day 1. Unfortunately, what tends to happen is that the DB administrator does not send all necessary information to the IFA when requested, and there are then delays in getting the required information from the administrator. The 3 month deadline from the date of the CETV sounds a long time, but in reality it is frequently found to be quite a tight deadline due to delays in getting all the required information together.

scoobyjones1

HappyHarry said:

scoobyjones1 said:

First IFA / PTS quote received. They want 5% of the CETV, so £3000 in this case. That's for the advice/work as they called it and no idea if they would approve the transfer or not. So could be money wasted. At least that would satisfy the DB holder that she had taken the correct advice and maybe then she could transfer into a stakeholder pension. However she is pretty adamant that £3k is way too much to pay...and they also said they would need 40 days. We will keep looking.

I think your wife may be disappointed if she is hoping for DB transfer advice for under £3000. That cost is lower than should be expected. 

40 days would be a long time if the IFA had all the required information on day 1. Unfortunately, what tends to happen is that the DB administrator does not send all necessary information to the IFA when requested, and there are then delays in getting the required information from the administrator. The 3 month deadline from the date of the CETV sounds a long time, but in reality it is frequently found to be quite a tight deadline due to delays in getting all the required information together.

We will see Harry. We feel it's way too much,,,though less than the 5-10k many wrongly said we would have to pay, on here. One thing though, we have all of the paperwork the IFA needs ready for him to fill in and it is up to the client to provide it, not the DB holder. No way they should need 40 days.