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Transferring an old pension
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And if it is a defined benefit scheme, and the transfer (CETV) is worth more than £30k, then you would need specific, expensive advice to move it. If the answer to that is no, transfer will be more difficult as many (most) SIPPs / modern pensions would not accept it.
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xylophone said:It used to a good pension back then if I remember correctly providing you stayed in itI believe it's to do with not enough in the overall trust to cover transfers should everyone do it, or something like that, I would need to find the original letter.
Check!
As other posters have indicated, it does sound as though you have a deferred Defined Benefit pension.
If so, it should be revaluing in deferment.
Do you have a scheme guide or is the guide available on the internet?
When exactly were you a member of the scheme?
https://www.barnett-waddingham.co.uk/comment-insight/blog/revaluation-for-early-leavers/ may be worth a read but you should check
the scheme guide/ the letter you have received.
Ok, so I've found some paperwork they sent out.
The transfer has been reduced because at the current time there is insufficient assets in the scheme to provide full transfer values to all members.
If I remain in the scheme and the sponsoring employer becomes insolvent the scheme would be wound up and I would receive minimum benefits which may be significantly lower.
Statement of entitlement.
Pensionable service start/15/02/1999
End/17/02/2002
Unreduced transfer value £11,903.26
Reduced transfer value £7,737.12
Calculation date 11/04/2024
Preserved benefits at the date of leaving pensionable service is £767.37 per annum.
Pension earned 06/04/1997 to 30/04/2005 - £767.37
Total preserved pension £767.37
Death benefits
Death before retiring spouse receives £383.69
After retirement, 50% lump at date of death, within 5 years of death a lump sum to the equivalent of the unpaid balance in the 5 year period.
There is a part about Guaranteed Minimum Pension and state second pension that I don't understand.
Revaluation of preserved benefits
The pension I have accrued in excess of my GMP is increased in line with price inflation. These are applied for complete years between date of leaving and normal retirement date.
The part of my preserved pension which is GMP if any will be revalued from your date of leaving up to my GMP age
Increase per tax year
6 April 1997 to 5 April 2002 - 6.25%
6 April 2002 to 5 April 2007 - 4.5%
Pension earned from 2005 is subject annual increase in consumer price index (maximum of 2.5%)
Hope that clears some of it up, as it doesn't make much sense to me.0 -
It is as I suspected a heavily underfunded defined benefit pension scheme. The fact it is offering reduced transfer values is to protect other scheme members (if they let some members transfer out the 'full' value of their benefits, that would be unfair to the remaining members).Onestepcloser said:xylophone said:It used to a good pension back then if I remember correctly providing you stayed in itI believe it's to do with not enough in the overall trust to cover transfers should everyone do it, or something like that, I would need to find the original letter.Check!
As other posters have indicated, it does sound as though you have a deferred Defined Benefit pension.
If so, it should be revaluing in deferment.
Do you have a scheme guide or is the guide available on the internet?
When exactly were you a member of the scheme?
https://www.barnett-waddingham.co.uk/comment-insight/blog/revaluation-for-early-leavers/ may be worth a read but you should check
the scheme guide/ the letter you have received.
Ok, so I've found some paperwork they sent out.
The transfer has been reduced because at the current time there is insufficient assets in the scheme to provide full transfer values to all members.
If I remain in the scheme and the sponsoring employer becomes insolvent the scheme would be wound up and I would receive minimum benefits which may be significantly lower.
If the employer becomes insolvent, then you are protected to a very large extent by the existence of the Pension Protection Fund: https://www.ppf.co.uk/ The benefits will be less than you'd anticipated, but you'd still get 90% of your entitlement under the scheme (100% if you've already reached the scheme's normal retirement age), and some pension increases.
You haven't got a Guaranteed Minimum Pension (GMPs stopped in 1997, and you didn't join the scheme until 1999), so ignore all that. Nor do you have any post-2005 service.Onestepcloser said:
Statement of entitlement.
Pensionable service start/15/02/1999
End/17/02/2002
Unreduced transfer value £11,903.26
Reduced transfer value £7,737.12
Calculation date 11/04/2024
Preserved benefits at the date of leaving pensionable service is £767.37 per annum.
Pension earned 06/04/1997 to 30/04/2005 - £767.37
Total preserved pension £767.37
Death benefits
Death before retiring spouse receives £383.69
After retirement, 50% lump at date of death, within 5 years of death a lump sum to the equivalent of the unpaid balance in the 5 year period.
There is a part about Guaranteed Minimum Pension and state second pension that I don't understand.
Revaluation of preserved benefits
The pension I have accrued in excess of my GMP is increased in line with price inflation. These are applied for complete years between date of leaving and normal retirement date.
The part of my preserved pension which is GMP if any will be revalued from your date of leaving up to my GMP age
Increase per tax year
6 April 1997 to 5 April 2002 - 6.25%
6 April 2002 to 5 April 2007 - 4.5%
Pension earned from 2005 is subject annual increase in consumer price index (maximum of 2.5%)
Hope that clears some of it up, as it doesn't make much sense to me.
Your pension at the time you left was £767.37, payable from the scheme's normal retirement age. It will have been quietly clocking up increases each year from the time you left in 2002 until you come to access your benefits, such increases being related to price inflation* - so it'll be worth quite a bit more than £767.37 by now.
*without knowing the exact rules of your scheme, it's not possible to say whether this is RPI or CPI, and whether it is 'capped' at a particular level, or is 'in line' to the extent that it matches such increases. Your administrators could confirm if asked - and you might see if they'll give you a projection of what your pension is now.
Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!0 -
Preserved benefits at the date of leaving pensionable service is £767.37 per annum.This is key information. Especially as the date of leaving was over 20 years ago.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Marcon said:
It is as I suspected a heavily underfunded defined benefit pension scheme. The fact it is offering reduced transfer values is to protect other scheme members (if they let some members transfer out the 'full' value of their benefits, that would be unfair to the remaining members).Onestepcloser said:xylophone said:It used to a good pension back then if I remember correctly providing you stayed in itI believe it's to do with not enough in the overall trust to cover transfers should everyone do it, or something like that, I would need to find the original letter.Check!
As other posters have indicated, it does sound as though you have a deferred Defined Benefit pension.
If so, it should be revaluing in deferment.
Do you have a scheme guide or is the guide available on the internet?
When exactly were you a member of the scheme?
https://www.barnett-waddingham.co.uk/comment-insight/blog/revaluation-for-early-leavers/ may be worth a read but you should check
the scheme guide/ the letter you have received.
Ok, so I've found some paperwork they sent out.
The transfer has been reduced because at the current time there is insufficient assets in the scheme to provide full transfer values to all members.
If I remain in the scheme and the sponsoring employer becomes insolvent the scheme would be wound up and I would receive minimum benefits which may be significantly lower.
If the employer becomes insolvent, then you are protected to a very large extent by the existence of the Pension Protection Fund: https://www.ppf.co.uk/ The benefits will be less than you'd anticipated, but you'd still get 90% of your entitlement under the scheme (100% if you've already reached the scheme's normal retirement age), and some pension increases.
You haven't got a Guaranteed Minimum Pension (GMPs stopped in 1997, and you didn't join the scheme until 1999), so ignore all that. Nor do you have any post-2005 service.Onestepcloser said:
Statement of entitlement.
Pensionable service start/15/02/1999
End/17/02/2002
Unreduced transfer value £11,903.26
Reduced transfer value £7,737.12
Calculation date 11/04/2024
Preserved benefits at the date of leaving pensionable service is £767.37 per annum.
Pension earned 06/04/1997 to 30/04/2005 - £767.37
Total preserved pension £767.37
Death benefits
Death before retiring spouse receives £383.69
After retirement, 50% lump at date of death, within 5 years of death a lump sum to the equivalent of the unpaid balance in the 5 year period.
There is a part about Guaranteed Minimum Pension and state second pension that I don't understand.
Revaluation of preserved benefits
The pension I have accrued in excess of my GMP is increased in line with price inflation. These are applied for complete years between date of leaving and normal retirement date.
The part of my preserved pension which is GMP if any will be revalued from your date of leaving up to my GMP age
Increase per tax year
6 April 1997 to 5 April 2002 - 6.25%
6 April 2002 to 5 April 2007 - 4.5%
Pension earned from 2005 is subject annual increase in consumer price index (maximum of 2.5%)
Hope that clears some of it up, as it doesn't make much sense to me.
Your pension at the time you left was £767.37, payable from the scheme's normal retirement age. It will have been quietly clocking up increases each year from the time you left in 2002 until you come to access your benefits, such increases being related to price inflation* - so it'll be worth quite a bit more than £767.37 by now.
*without knowing the exact rules of your scheme, it's not possible to say whether this is RPI or CPI, and whether it is 'capped' at a particular level, or is 'in line' to the extent that it matches such increases. Your administrators could confirm if asked - and you might see if they'll give you a projection of what your pension is now.
Excuse me if I'm getting this wrong as I struggle with stuff like this. So when I left the pension in 2002 I would get £767 per annum if I was 65, so if I leave this till I'm 65 which is another 19 years this will track inflation to some degree therefore increasing the value of the pot?
Is that correct?0 -
At the time you left in 2002, you had 'earned' pension benefits of £767, payable at age 65. Your pension became 'deferred' (payable at some later date) at the time you left.Onestepcloser said:Marcon said:
It is as I suspected a heavily underfunded defined benefit pension scheme. The fact it is offering reduced transfer values is to protect other scheme members (if they let some members transfer out the 'full' value of their benefits, that would be unfair to the remaining members).Onestepcloser said:xylophone said:It used to a good pension back then if I remember correctly providing you stayed in itI believe it's to do with not enough in the overall trust to cover transfers should everyone do it, or something like that, I would need to find the original letter.Check!
As other posters have indicated, it does sound as though you have a deferred Defined Benefit pension.
If so, it should be revaluing in deferment.
Do you have a scheme guide or is the guide available on the internet?
When exactly were you a member of the scheme?
https://www.barnett-waddingham.co.uk/comment-insight/blog/revaluation-for-early-leavers/ may be worth a read but you should check
the scheme guide/ the letter you have received.
Ok, so I've found some paperwork they sent out.
The transfer has been reduced because at the current time there is insufficient assets in the scheme to provide full transfer values to all members.
If I remain in the scheme and the sponsoring employer becomes insolvent the scheme would be wound up and I would receive minimum benefits which may be significantly lower.
If the employer becomes insolvent, then you are protected to a very large extent by the existence of the Pension Protection Fund: https://www.ppf.co.uk/ The benefits will be less than you'd anticipated, but you'd still get 90% of your entitlement under the scheme (100% if you've already reached the scheme's normal retirement age), and some pension increases.
You haven't got a Guaranteed Minimum Pension (GMPs stopped in 1997, and you didn't join the scheme until 1999), so ignore all that. Nor do you have any post-2005 service.Onestepcloser said:
Statement of entitlement.
Pensionable service start/15/02/1999
End/17/02/2002
Unreduced transfer value £11,903.26
Reduced transfer value £7,737.12
Calculation date 11/04/2024
Preserved benefits at the date of leaving pensionable service is £767.37 per annum.
Pension earned 06/04/1997 to 30/04/2005 - £767.37
Total preserved pension £767.37
Death benefits
Death before retiring spouse receives £383.69
After retirement, 50% lump at date of death, within 5 years of death a lump sum to the equivalent of the unpaid balance in the 5 year period.
There is a part about Guaranteed Minimum Pension and state second pension that I don't understand.
Revaluation of preserved benefits
The pension I have accrued in excess of my GMP is increased in line with price inflation. These are applied for complete years between date of leaving and normal retirement date.
The part of my preserved pension which is GMP if any will be revalued from your date of leaving up to my GMP age
Increase per tax year
6 April 1997 to 5 April 2002 - 6.25%
6 April 2002 to 5 April 2007 - 4.5%
Pension earned from 2005 is subject annual increase in consumer price index (maximum of 2.5%)
Hope that clears some of it up, as it doesn't make much sense to me.
Your pension at the time you left was £767.37, payable from the scheme's normal retirement age. It will have been quietly clocking up increases each year from the time you left in 2002 until you come to access your benefits, such increases being related to price inflation* - so it'll be worth quite a bit more than £767.37 by now.
*without knowing the exact rules of your scheme, it's not possible to say whether this is RPI or CPI, and whether it is 'capped' at a particular level, or is 'in line' to the extent that it matches such increases. Your administrators could confirm if asked - and you might see if they'll give you a projection of what your pension is now.
Excuse me if I'm getting this wrong as I struggle with stuff like this. So when I left the pension in 2002 I would get £767 per annum if I was 65, so if I leave this till I'm 65 which is another 19 years this will track inflation to some degree therefore increasing the value of the pot?
Is that correct?
Since 2002, your deferred pension has been steadily increasing in value, year on year, depending on the rate of inflation. So yes, the pension has been going up in value from 2002 and will continue to do so for the next 19 years. If the employer becomes insolvent, and the scheme goes into the Pension Protection Fund, you'll get 90% of that 'revalued' figure.
A defined benefit pension doesn't have a 'pot', although many people think of the transfer value as a 'pot'. In this case, because of the funding position of the scheme (awful, and with an employer clearly in no position to put matters right or the Pensions Regulator wouldn't have agreed that the scheme could offer 'reduced' transfer values), don't bank on that increasing.Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!1 -
So am i best to find out what the projection is and then see if it's worth leaving as is or transfer it to my workplace pension or SIPP in the hope of a better return?Marcon said:
At the time you left in 2002, you had 'earned' pension benefits of £767, payable at age 65. Your pension became 'deferred' (payable at some later date) at the time you left.Onestepcloser said:Marcon said:
It is as I suspected a heavily underfunded defined benefit pension scheme. The fact it is offering reduced transfer values is to protect other scheme members (if they let some members transfer out the 'full' value of their benefits, that would be unfair to the remaining members).Onestepcloser said:xylophone said:It used to a good pension back then if I remember correctly providing you stayed in itI believe it's to do with not enough in the overall trust to cover transfers should everyone do it, or something like that, I would need to find the original letter.Check!
As other posters have indicated, it does sound as though you have a deferred Defined Benefit pension.
If so, it should be revaluing in deferment.
Do you have a scheme guide or is the guide available on the internet?
When exactly were you a member of the scheme?
https://www.barnett-waddingham.co.uk/comment-insight/blog/revaluation-for-early-leavers/ may be worth a read but you should check
the scheme guide/ the letter you have received.
Ok, so I've found some paperwork they sent out.
The transfer has been reduced because at the current time there is insufficient assets in the scheme to provide full transfer values to all members.
If I remain in the scheme and the sponsoring employer becomes insolvent the scheme would be wound up and I would receive minimum benefits which may be significantly lower.
If the employer becomes insolvent, then you are protected to a very large extent by the existence of the Pension Protection Fund: https://www.ppf.co.uk/ The benefits will be less than you'd anticipated, but you'd still get 90% of your entitlement under the scheme (100% if you've already reached the scheme's normal retirement age), and some pension increases.
You haven't got a Guaranteed Minimum Pension (GMPs stopped in 1997, and you didn't join the scheme until 1999), so ignore all that. Nor do you have any post-2005 service.Onestepcloser said:
Statement of entitlement.
Pensionable service start/15/02/1999
End/17/02/2002
Unreduced transfer value £11,903.26
Reduced transfer value £7,737.12
Calculation date 11/04/2024
Preserved benefits at the date of leaving pensionable service is £767.37 per annum.
Pension earned 06/04/1997 to 30/04/2005 - £767.37
Total preserved pension £767.37
Death benefits
Death before retiring spouse receives £383.69
After retirement, 50% lump at date of death, within 5 years of death a lump sum to the equivalent of the unpaid balance in the 5 year period.
There is a part about Guaranteed Minimum Pension and state second pension that I don't understand.
Revaluation of preserved benefits
The pension I have accrued in excess of my GMP is increased in line with price inflation. These are applied for complete years between date of leaving and normal retirement date.
The part of my preserved pension which is GMP if any will be revalued from your date of leaving up to my GMP age
Increase per tax year
6 April 1997 to 5 April 2002 - 6.25%
6 April 2002 to 5 April 2007 - 4.5%
Pension earned from 2005 is subject annual increase in consumer price index (maximum of 2.5%)
Hope that clears some of it up, as it doesn't make much sense to me.
Your pension at the time you left was £767.37, payable from the scheme's normal retirement age. It will have been quietly clocking up increases each year from the time you left in 2002 until you come to access your benefits, such increases being related to price inflation* - so it'll be worth quite a bit more than £767.37 by now.
*without knowing the exact rules of your scheme, it's not possible to say whether this is RPI or CPI, and whether it is 'capped' at a particular level, or is 'in line' to the extent that it matches such increases. Your administrators could confirm if asked - and you might see if they'll give you a projection of what your pension is now.
Excuse me if I'm getting this wrong as I struggle with stuff like this. So when I left the pension in 2002 I would get £767 per annum if I was 65, so if I leave this till I'm 65 which is another 19 years this will track inflation to some degree therefore increasing the value of the pot?
Is that correct?
Since 2002, your deferred pension has been steadily increasing in value, year on year, depending on the rate of inflation. So yes, the pension has been going up in value from 2002 and will continue to do so for the next 19 years. If the employer becomes insolvent, and the scheme goes into the Pension Protection Fund, you'll get 90% of that 'revalued' figure.
A defined benefit pension doesn't have a 'pot', although many people think of the transfer value as a 'pot'. In this case, because of the funding position of the scheme (awful, and with an employer clearly in no position to put matters right or the Pensions Regulator wouldn't have agreed that the scheme could offer 'reduced' transfer values), don't bank on that increasing.
Very much appreciate you taking the time explain this as well as all the other responses.0 -
So am i best to find out what the projection is and then see if it's worth leaving as is or transfer it to my workplace pension or SIPP in the hope of a better return?You could ask them to update the figure. However, the expectation will be that the updated figure will be significantly higher and have an early breakeven point to the CETV, meaning that it would be unsuitable to transfer.
It is highly unlikely your SIPP or workplace pension would beat it.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I will ask them for an updated figure tomorrow and whether it tracks inflation and whether it is capped. Anything else I should find out?dunstonh said:So am i best to find out what the projection is and then see if it's worth leaving as is or transfer it to my workplace pension or SIPP in the hope of a better return?You could ask them to update the figure. However, the expectation will be that the updated figure will be significantly higher and have an early breakeven point to the CETV, meaning that it would be unsuitable to transfer.
It is highly unlikely your SIPP or workplace pension would beat it.
Thanks.0 -
Yes - whether there is any indication of when the scheme will resume paying 'full' (as opposed to 'reduced') transfer values.Onestepcloser said:
I will ask them for an updated figure tomorrow and whether it tracks inflation and whether it is capped. Anything else I should find out?dunstonh said:So am i best to find out what the projection is and then see if it's worth leaving as is or transfer it to my workplace pension or SIPP in the hope of a better return?You could ask them to update the figure. However, the expectation will be that the updated figure will be significantly higher and have an early breakeven point to the CETV, meaning that it would be unsuitable to transfer.
It is highly unlikely your SIPP or workplace pension would beat it.
Thanks.Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!0
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