Final Salary Pension transfer

Silvertabby

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!  

Yes, the answer to that critical pensions question - "give me your date of death and I'll work it out for you". 

This isn't the first poster who is adamant that transferring a DB pension to a DC will give them a better return.  Sometimes it will, sometimes it won't.  Back to that critical question....

Moonwolf

Silvertabby said:

This isn't the first poster who is adamant that transferring a DB pension to a DC will give them a better return.  Sometimes it will, sometimes it won't.  Back to that critical question....

They seem to get so hot under the collar they are probably right that they will pass early.

daveyjp

Silverfox1967 said:

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.

My comment specifically related to the DB pension income, there was no statement from me about not spending.

If you want to leave something for dependents you can't do that by spending all your pension income so you must be investing some of it,

As dunston explains there are ways of receiving the DB income and leaving a lump sum for dependents. That would be my focus.

Cobbler_tone

dunstonh said:

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.

I'm currently interested in this dunstonh.
In your experience how do final quotes compare the what may be shown on a live portal?
My DB scheme (I'm 55 and a bit) will show a pension (and/or sliding lump sums) which I can see increasing each month as I move towards the 56 figure.
I have requested a quote to retire on the 1st March 2025, more to calibrate against what the portal says so I don't have any nasty surprises. Knowing how they work this will take several weeks and they don't even acknowledge your requests, before something randomly drops through the post.

Just interested in your experiences of this.

Silverfox1967

Some interesting discussion points on here and certainly given me some further things to think about,
Dunstonh - with your experience as an IFA, without giving you any specifics can you advise on this:-
I have been given a transfer value that will return on current values, an annual DB pension of £3.6k. As i intending to retire at 59 in 14 months time, is this value fixed or will it have the possibility to increase? (hopefully not decrease).
Are there any other items that may impact this value and once i retire what future increases will be made with regards to inflation or any other items?

Cobbler_tone

I can answer that one Silverfox. Your DB pension will increase in line with the scheme rules. It'll all be in the booklet for you. e.g. part of mine increases by RPI limited to 5% and the other part by RPI limited to 2.5%. Any increases would be applied also when the pension is in payment usually.

I'd hazard a guess that your transfer value is around £70k if your pension is shown at £3.6k now.

Silverfox1967

Cobbler_tone said:

I can answer that one Silverfox. Your DB pension will increase in line with the scheme rules. It'll all be in the booklet for you. e.g. part of mine increases by RPI limited to 5% and the other part by RPI limited to 2.5%. Any increases would be applied also when the pension is in payment usually.

I'd hazard a guess that your transfer value is around £70k if your pension is shown at £3.6k now.

Thanks Cobbler_tone, it's not a million miles off.
So just that i understand this completely, if i have this value at present, when i come to retire will this value still be the same or could it differ (also accounting for RPI changes)?

Marcon

Silverfox1967 said:

Dazed and confused,
thanks for the response, however I am fully aware of what a DB scheme is.
Yes i have an upto date vale and i would not disclose this in an open forum. My advisor knows what this value is, but thanks for you response anyway.

Why so coy? There are plenty of people on sites like these who are prone to oversharing sensitive information, but nobody knows who you are and giving the latest CETV won't identify you, the scheme or anything else - but it would give people relevant information to assist when responding. 

Silverfox1967 said:

Some interesting discussion points on here and certainly given me some further things to think about,
Dunstonh - with your experience as an IFA, without giving you any specifics can you advise on this:-
I have been given a transfer value that will return on current values, an annual DB pension of £3.6k. As i intending to retire at 59 in 14 months time, is this value fixed or will it have the possibility to increase? (hopefully not decrease).
Are there any other items that may impact this value and once i retire what future increases will be made with regards to inflation or any other items?

Why not give the transfer value, which would help Dunstonh considerably if he chooses to answer further? It's not clear if you are asking whether the transfer value will change (yes, could be up or down) or whether the pension will increase (changes aren't related to what the transfer value will 'return' - they are related to what the rules of the scheme say, what inflation does in the next 14 months and - if you are retiring before the scheme's normal retirement date - whether the early retirement factors are changed between now and then).

Silverfox1967

Marcon said:

Silverfox1967 said:

Dazed and confused,
thanks for the response, however I am fully aware of what a DB scheme is.
Yes i have an upto date vale and i would not disclose this in an open forum. My advisor knows what this value is, but thanks for you response anyway.

Why so coy? There are plenty of people on sites like these who are prone to oversharing sensitive information, but nobody knows who you are and giving the latest CETV won't identify you, the scheme or anything else - but it would give people relevant information to assist when responding. 

Silverfox1967 said:

Some interesting discussion points on here and certainly given me some further things to think about,
Dunstonh - with your experience as an IFA, without giving you any specifics can you advise on this:-
I have been given a transfer value that will return on current values, an annual DB pension of £3.6k. As i intending to retire at 59 in 14 months time, is this value fixed or will it have the possibility to increase? (hopefully not decrease).
Are there any other items that may impact this value and once i retire what future increases will be made with regards to inflation or any other items?

Why not give the transfer value, which would help Dunstonh considerably if he chooses to answer further? It's not clear if you are asking whether the transfer value will change (yes, could be up or down) or whether the pension will increase (changes aren't related to what the transfer value will 'return' - they are related to what the rules of the scheme say, what inflation does in the next 14 months and - if you are retiring before the scheme's normal retirement date - whether the early retirement factors are changed between now and then).

The transfer value is just under £70k

Marcon

Silverfox1967 said:

Cobbler_tone
Thanks for your info, most helpful and i will follow up to see is there is any ex-employee advice.
The value in question is over £30k in my 'pot', and as i've mentioned previously my primary reasons for wanting to move are control of my funds and providing for dependents, something which i don't feel the DB scheme provides me with.
In the last newsletter i received from the company, the overall fund value was in deficit and had been for a period of time, something else which concerns me.

You say you understand DB pensions, so why was this of concern to you? Are you worried about the employer's covenant?