Defined Benefit Pension

JoVSl

Could anyone advise me please, i have a defined benefit pension with Buck from years ago, its not my main pension and i want to transfer into another pension to draw down on.  They sent me the forms but its worth £31k so i have to have financial advice and a form signing as £1k over me doing it myself.  I have seen two FA and they say they are not able to advise as they could be sued. if it is the wrong advise or not authorized as there are only a few FA that deal with them.  I cannot find anyone who deals with Defined Benefits and do not know what to do.  I am a single person no spouse - any advise would be gratefully appreciated as need this money as a lump sum. 

Dazed_and_C0nfused

What is the normal pension age for this DB scheme?

What is your current age?

Does this DB pension have an automatic PCLS?

What is the current estimate of the annual pension payable, not the amount it was worth when you left that scheme.

What inflation protection does this DB scheme have?

Any reason you are contacting FA and not IFA's?

Silvertabby

By 'Buck' do you by any chance mean Bucks County Council?  If so, that's LGPS.

Transfer factors for the LGPS have always been on the low side, so the big question is.....how much fully index linked (including all and any GMP) annual pension would you be giving up for this £31K?  That's if you can find an advisor willing to play ball, that is.

Marcon

JoVSl said:

Could anyone advise me please, i have a defined benefit pension with Buck from years ago, its not my main pension and i want to transfer into another pension to draw down on.  They sent me the forms but its worth £31k so i have to have financial advice and a form signing as £1k over me doing it myself.  I have seen two FA and they say they are not able to advise as they could be sued. if it is the wrong advise or not authorized as there are only a few FA that deal with them.  I cannot find anyone who deals with Defined Benefits and do not know what to do.  I am a single person no spouse - any advise would be gratefully appreciated as need this money as a lump sum. 

You're unlikely to find an adviser who is willing to act for you - it simply isn't worth their while to take such a major risk (thank the FCA for that one), and it would cost you upwards of £5K for the advice.

xylophone

By 'Buck' do you by any chance mean Bucks County Council?  If so, that's LGPS.

More likely this? https://buck.com/uk/

Buck is an integrated HR, pensions, and employee benefits consulting, technology, and administration services firm.

JoVSl

thanks sorry i meant IFA, I am 55 and its Buck.com guaranteed cash equ is £31k

pterri

I’m very conservative money wise, what would £1000 per year for life and indexed to inflation (possibly limited? Mine is limited to 5%) cost to buy as an investment? More that £30k I’m sure? 

xylophone

You need a Pension Transfer Specialist. The advice will not be cheap - think thousands rather than hundreds.


https://adviserbook.co.uk/

Tick "confirmed independent" and "pension transfer" when the menu comes up.

Bear in mind that without a positive recommendation, most pension schemes will not accept  a DB transfer.

See this thread

https://forums.moneysavingexpert.com/discussion/6449917/cash-out-of-db-pension/p1

dunstonh

They sent me the forms but its worth £31k so i have to have financial advice and a form signing as £1k over me doing it myself.

That is because in 9 out of 10 cases, it it best left where it is.    

 I have seen two FA and they say they are not able to advise as they could be sued. if it is the wrong advise or not authorized as there are only a few FA that deal with them.

it is one of the highest risk transactions that an adviser can do.   The FCA start from the position that it is missold unless proven otherwise.   So, you need damned good justification.   It is also a bit of a hot potato at the moment with the FCA taking an increased interest in recent years.     The fall in CETVs by around half (i.e. your 31k CETV would probably have been around £60k in Nov 2021) hasn't helped justification.

Around 1 in 10 advisers hold permission to carry out DB transfers.   Most firms don't bother as the risk is no longer worth it.  It is also damned expensive from a compliance, regulatory and legal point of view.   Those that still do it typically charge in the £5k+ range. 

And that £5k+ charge wont help the transfer to be classed as justified.    And this is important as you will have to pay that charge out of your own pocket. It won't come from the pension.

You will be able to find someone eventually but it almost certainly isn't in your best interests to do this transaction.

JoVSl

excuse my ignorance but i do not understand if this is my money, why can i not chose to move it at my own risk, it is not that it worth a massive amount each year and dies with me? i am single and tbh the bulk sum is needed at the moment - if i could just afford to leave it there i would - thank you i really appreciate your advice 

GrumpyDil

It doesn't matter what you think unfortunately. The rules are that you need to take advice which you will need to pay for. 

Having taken that advice, if it is positive you then get to transfer the money. If it isn't positive (very likely) then most providers won't touch it with your bargepole let alone theirs.