Final Salary Pension transfer

Silverfox1967

daveyjp said:

"The main reasons for wanting to transfer are that i want control over all of my funds and also i wish to ensure that my dependents have something for the future."

I'd change this statement to a question.

How do I achieve control over all my funds and ensure dependents have something for the future whilst also keeping the DB pension? 

One obvious approach is to invest the DB income as you have no intention of spending it.

That's a very presumptious to state Daveyjp, what make you think i have no intention of spending?

daveyjp

Silverfox1967 said:

daveyjp said:

"The main reasons for wanting to transfer are that i want control over all of my funds and also i wish to ensure that my dependents have something for the future."

I'd change this statement to a question.

How do I achieve control over all my funds and ensure dependents have something for the future whilst also keeping the DB pension? 

One obvious approach is to invest the DB income as you have no intention of spending it.

That's a very presumptious to state Daveyjp, what make you think i have no intention of spending?

No presumption, you have said so.  

"I wish to ensure that my dependents have something for the future". 

Silverfox1967

daveyjp said:

Silverfox1967 said:

daveyjp said:

"The main reasons for wanting to transfer are that i want control over all of my funds and also i wish to ensure that my dependents have something for the future."

I'd change this statement to a question.

How do I achieve control over all my funds and ensure dependents have something for the future whilst also keeping the DB pension? 

One obvious approach is to invest the DB income as you have no intention of spending it.

That's a very presumptious to state Daveyjp, what make you think i have no intention of spending?

No presumption, you have said so.  

"I wish to ensure that my dependents have something for the future". 

???? That doesn't say that i have no intention of spending.

Silverfox1967

molerat said:

Even with a positive result from the advice you may have difficulty finding a provider of your choosing that will actually take the transfer, they are all running scared of the next "mis-sale" scandal.  You will likely need to move it to a stakeholder first, as they cannot refuse it, then to your choice of provider.

Thanks molerat, interesting point.
I have a number of other pensions, including a current one (DC) with my employer. Once i am able to transfer, then i will discuss futher with my advisor on where to place the funds.

dunstonh

 One of these is a DB scheme (Final Salary), however the value of this is not really large as it was from when i was with a company in my early days and is based on a relatively low salary.

CETVs are irrelevant 90% of the time.   Your pension is not dependent on the CETV.

I'm looking at consolidating a number of my pensions and wish to transfer this out to the others.

Its unsuitable to transfer a DB pension to DC in around 9 out of 10 cases.  The FCA treat a DB transfer as missold unless proven otherwise.   So, why do you think you are in the 1 in 10 that is suitable?

The value that i will receive each month from this on the latest projection is not large, just a couple of hundred pounds and all i keep getting told is that this is guaranteed for life.

When was that last updated?  (typically they don't update it until closer to retirement or upon request)

All well and good, but as no-one can confirm how long i am going to live for, this is not where i wish my funds to be invested. The next point that gets made, is that if i die, my dependent will get a reduced value for the rest of their life.
Again all well and good, but no-one ever mentions that what if my dependent dies before me!

Its not the sort of thing that comes up in day to day conversations.   That is probably why no one mentions it.  However, it is mentioned where it is most important and that is in the scheme booklet.

The answer is that the 'pot' that i have just goes back to the main fund, benefitting the scheme and not my children (who are over the age of 23 and will not benefit).

There is no pot and it doesnt benefit the scheme.  It benefits the members of the scheme but in reality, the liabilities are factored in on assumptions and early deaths offset later deaths.

I've explained this to my advisor and he understands my concerns. He has passed on my wishes to an other company who can facilitate this, but they seem to be acting like they have 'god-like' control over my funds. 
In addition to this, they wish to charge me £4k for receiving full advice from them. 

£4k is a very low price.    And its good to hear they are exerting control as it means they are taking the legislation and regulatory requirements seriously.

My main gripe is that i do not wish to have full advice, as after working for 30 years as an accountant, I have a good understanding of my desires and wishes, along with the potential risks involved if a fund does not perform well - i will be looking at investing in something that is a cautious risk, so potentially maximising my future returns.

I usually find most accountants are pretty clueless (or rather have obsolete knowledge)  when it comes to pensions apart from what box it gets reported on in the tax return.      A cautious investor would unlikely want to transfer out of a DB based on current CETVs (which are about 50% down on late 2021 when they peaked).   Its unlikely cautious investments would offer a better return in most cases.   Maybe 6 years ago could have been justifiable but then cautious investments have been dire since then (the same thing that sent CETVs down did the same with cautious assets)

2 questions spring to mind immediately, 
1). Has anyone else encountered this opposition to their wishes?
2). Is the fee being quoted a fair one, based upon the fact that i already know what i want to do and am fully aware of any potential risks in investments?

1 - As its unsuitable to transfer a DB pension in around 9 out of 10 cases, then the answer is yes.
2 - its very cheap.  usually its closer to £10k.   Its one of the highest risk transactions that an advice firm can carry out and if they get it wrong, the excess on DB pensions is higher than the fee you are being quoted.    Firms that do DB transfers pay significantly higher costs and are in the FCA's radar for enhanced checks.  

Yes the transfer value has fallen since they made the original offer to buy members out of the scheme, however at that time i wasn't ready for retirement, so asked around and was advised to leave it - one of the comments at the time was "it'll be worth more in the future!! ".

At that time, CETVs were at a peak and why above the long term average.    Yes, the peak continued to rise for a few more years but it has now reverted to the typical ballpark.     Anyone saying it would be worth more in the future was either being taken out of context and was making a guess or they were clueless.   They were correct that they did continue to rise but it was only for about another year.  

I'm clear in my mind of what i want to do and am fully aware of the risks, however i feel that there are more benefits to be had in the long-term.

Nothing in this thread has given any indication you are correct.  However, that would require accurate details.   What you have said though leans more to retaining the DB pension rather than transfer it.

Even with the £4k fees being quoted, I think that i should recover this within the first year of transfer, so that once i come to finally finish in 14 months time, my fund will be in the same position as at today.

So, we are talking about a CETV that is several hundreds of thousands of pounds based on cautious investor returns.      That could make a transfer justifiable for inheritance reasons if you have sufficient other secure income or sufficient high net worth that the pension is an insignificance in the scheme of things.

One obvious approach is to invest the DB income as you have no intention of spending it.

Or by taking the DB annually increasing income, less is required to be taken from the DC pension which will be higher in value because of that.

Dazed_and_C0nfused

Yes the transfer value has fallen since they made the original offer to buy members out of the scheme, however at that time i wasn't ready for retirement, so asked around and was advised to leave it - one of the comments at the time was "it'll be worth more in the future!! ".

I wonder if this comment was actually made about the DB pension itself, not the CETV?

It probably isn't really worth more, in spending power terms, but in simple figures it will be, due to the annual revaluation each year

Cobbler_tone

Silverfox...Dunstonh and Marcon are two posters really worth listening to on here. They can be 'direct' but it is the world they live in! Not forgetting that if you stump up £4k you could be heavily advised not to transfer.

My takeaway is always to try and fully understand and educate yourself on the impacts of making different decisions. Very rarely I see a lot that is categorically 'right' or 'wrong' but certain decisions can have big impacts. Pretty much every piece of advice has the caveat of "it depends". Ultimately the over riding factor is that no-one can tell us how long we are going to live!  

Silverfox1967

dunstonh said:

 One of these is a DB scheme (Final Salary), however the value of this is not really large as it was from when i was with a company in my early days and is based on a relatively low salary.

CETVs are irrelevant 90% of the time.   Your pension is not dependent on the CETV.

I'm looking at consolidating a number of my pensions and wish to transfer this out to the others.

Its unsuitable to transfer a DB pension to DC in around 9 out of 10 cases.  The FCA treat a DB transfer as missold unless proven otherwise.   So, why do you think you are in the 1 in 10 that is suitable?

The value that i will receive each month from this on the latest projection is not large, just a couple of hundred pounds and all i keep getting told is that this is guaranteed for life.

When was that last updated?  (typically they don't update it until closer to retirement or upon request)

All well and good, but as no-one can confirm how long i am going to live for, this is not where i wish my funds to be invested. The next point that gets made, is that if i die, my dependent will get a reduced value for the rest of their life.
Again all well and good, but no-one ever mentions that what if my dependent dies before me!

Its not the sort of thing that comes up in day to day conversations.   That is probably why no one mentions it.  However, it is mentioned where it is most important and that is in the scheme booklet.

The answer is that the 'pot' that i have just goes back to the main fund, benefitting the scheme and not my children (who are over the age of 23 and will not benefit).

There is no pot and it doesnt benefit the scheme.  It benefits the members of the scheme but in reality, the liabilities are factored in on assumptions and early deaths offset later deaths.

I've explained this to my advisor and he understands my concerns. He has passed on my wishes to an other company who can facilitate this, but they seem to be acting like they have 'god-like' control over my funds. 
In addition to this, they wish to charge me £4k for receiving full advice from them. 

£4k is a very low price.    And its good to hear they are exerting control as it means they are taking the legislation and regulatory requirements seriously.

My main gripe is that i do not wish to have full advice, as after working for 30 years as an accountant, I have a good understanding of my desires and wishes, along with the potential risks involved if a fund does not perform well - i will be looking at investing in something that is a cautious risk, so potentially maximising my future returns.

I usually find most accountants are pretty clueless (or rather have obsolete knowledge)  when it comes to pensions apart from what box it gets reported on in the tax return.      A cautious investor would unlikely want to transfer out of a DB based on current CETVs (which are about 50% down on late 2021 when they peaked).   Its unlikely cautious investments would offer a better return in most cases.   Maybe 6 years ago could have been justifiable but then cautious investments have been dire since then (the same thing that sent CETVs down did the same with cautious assets)

2 questions spring to mind immediately, 
1). Has anyone else encountered this opposition to their wishes?
2). Is the fee being quoted a fair one, based upon the fact that i already know what i want to do and am fully aware of any potential risks in investments?

1 - As its unsuitable to transfer a DB pension in around 9 out of 10 cases, then the answer is yes.
2 - its very cheap.  usually its closer to £10k.   Its one of the highest risk transactions that an advice firm can carry out and if they get it wrong, the excess on DB pensions is higher than the fee you are being quoted.    Firms that do DB transfers pay significantly higher costs and are in the FCA's radar for enhanced checks.  

Yes the transfer value has fallen since they made the original offer to buy members out of the scheme, however at that time i wasn't ready for retirement, so asked around and was advised to leave it - one of the comments at the time was "it'll be worth more in the future!! ".

At that time, CETVs were at a peak and why above the long term average.    Yes, the peak continued to rise for a few more years but it has now reverted to the typical ballpark.     Anyone saying it would be worth more in the future was either being taken out of context and was making a guess or they were clueless.   They were correct that they did continue to rise but it was only for about another year.  

I'm clear in my mind of what i want to do and am fully aware of the risks, however i feel that there are more benefits to be had in the long-term.

Nothing in this thread has given any indication you are correct.  However, that would require accurate details.   What you have said though leans more to retaining the DB pension rather than transfer it.

Even with the £4k fees being quoted, I think that i should recover this within the first year of transfer, so that once i come to finally finish in 14 months time, my fund will be in the same position as at today.

So, we are talking about a CETV that is several hundreds of thousands of pounds based on cautious investor returns.      That could make a transfer justifiable for inheritance reasons if you have sufficient other secure income or sufficient high net worth that the pension is an insignificance in the scheme of things.

One obvious approach is to invest the DB income as you have no intention of spending it.

Or by taking the DB annually increasing income, less is required to be taken from the DC pension which will be higher in value because of that.

Interesting response, I suppose that from this you are an expert in this field as opposed to a clueless, uneducated accountant like myself. If you are an expert, then i'd be interested to hear more.
With regards to there being no pot, then i disagree. Where are the funds kept if there is no overall pot?
This is just a difference in terminology and not really useful or constructive.
In addition to this, you mention that it doesn't benefit the scheme, just the members of the scheme.
Are these not one and the same?
On the point of funds upon death of either myself or my spouse, just because it doesn't occur in day to day conversations, doesn't make it any less relevant. It's a valid point and maybe should be highlighted.
The value was last updated a month ago, so is very recent and was made upon request.

Silverfox1967

Cobbler_tone said:

Silverfox...Dunstonh and Macron are two posters really worth listening to on here. They can be 'direct' but it is the world they live in! Not forgetting that if you stump up £4k you could be heavily advised not to transfer.

My takeaway is always to try and fully understand and educate yourself on the impacts of making different decisions. Very rarely I see a lot that is categorically 'right' or 'wrong' but certain decisions can have big impacts. Pretty much every piece of advice has the caveat of "it depends". Ultimately the over riding factor is that no-one can tell us how long we are going to live!  

Cobbler_tone, thanks again very useful and appreciated.

dunstonh

Interesting response, I suppose that from this you are an expert in this field as opposed to a clueless, uneducated accountant like myself.

Its the reason I employ an accountant to do my accounts.   They have their area of knowledge and skills.       Part of the reason for my comment is that until 1995, accountants used to be able to do pensions.   I have often had run ins with accountants who have given duff information on pensions. Sometimes extremely bad info.  Sometimes dated info as if we were still before 1995.

With regards to there being no pot, then i disagree. Where are the funds kept if there is no overall pot?

If there is a pot, what if your investment selection?  Name the investment funds you are in and give us the last 3 valuations from the quarterly statements that you would get if you had a pot.

In addition to this, you mention that it doesn't benefit the scheme, just the members of the scheme.
Are these not one and the same?

They are but your inference was that it was a benefit to the scheme whereas in reality, the accountants and actuaries are there to ensure the pension balances.   Its not there to profit anyone.

On the point of funds upon death of either myself or my spouse, just because it doesn't occur in day to day conversations, doesn't make it any less relevant. It's a valid point and maybe should be highlighted.

And as I said, it is documented in the scheme booklet.   So, they are highlighted.

The value was last updated a month ago, so is very recent and was made upon request.

The CETV getting updated is one thing.   The income figure is the one that usually does not get updated on the fly.  That needs to be updated manually.     It is one of the most common errors people make when looking at the income figure vs the CETV.    Only to later find the income figure, once updated, is a lot higher than they initially thought.

How many times your income figure is the CETV?  20x?  50x?  70x?.....   We have seen all of those over the years   in the absence of data, that snippet of data would help