DB transferred.

dunstonh

OH duly completed the form which included things like "was it explained you were giving up guaranteed lifetime income" which he stated it wasn't.  

That is a surprising one.     Its the most obvious thing when transferring out of a DB pension into a DC pension.  One is guaranteed. The other is not.   

However, they have included some calculations to show he is not worse off due to transferring and therefore no compensation is due. Since then I have read lots on here that you should never give up a DB.

In normal times when CETVs are at the level they are now, its about 1 in 10 are suitable to transfer.    However, when CETVs were high, the figure went to around 6 in 10 suitable to transfer (from a financial point of view) but probably closer to 4 in 10 when you consider that many people with DB schemes have no history of investing and lack understanding of how investments work and don't have the behavioural capacity to be an investor.

Over the last 18 months, investments have done very well.  So, many of these reviews are finding that people were missold on a technicality (a missing paragraph in the report for example) but are financially better off.   The FSCS have found similar in the cases they have been reviewing, too. 

The highest profile area were British Steel pensions and the payouts on those is significantly lower than expected. 360 former members were offered redress for misselling, but an additional 1744 had their advice classed as missold, but no redress was paid as they were not financially worse off.  

Whilst there were certainly firms that were misselling.  e.g. the firms set up as pension transfer factories using copy and paste (ironically, the type that many posters here were after as they didn't want advice and had already made their mind up), some genuine good quality firms have been caught up in the reviews.  The FCA published what is considered to be best practice but then measured cases from before that point on that basis.  Inevitably, that led to correct advice failing because of a technicality.   

He has now been advised by the IFA that he is retiring,  his family are taking over but they have relinquished the licence as they are looking to merge with another company and if he wants to take any money he should contact Aviva direct. This all sounds a bit off to me. 

Nothing wrong with that bit at all.    Nobody works forever and rather than force you to another company, they are giving you the choice to find another IFA or DIY.     So, it's actually a good thing they are doing as it leaves the choice with you.

It's more the fact the IFA did his own review then stated he was no worse off which is difficult to know unless you know how long you will live for?

The process of a review is defined as is the calculation method.  There are FCA publications on this.   The outcome will largely depend on when you transferred and how you invested.   It would include taking the current value and buying an annuity with it to match the scheme pension on the DB.  Given the recent valuation increases on investments and the increase in annuity rates and it sounds like you took the CETV when it was at a high point, it is not a surprise to see it as a technical missale but no redress necessary.

Lindlou

@dunstonh - Thank you for that reply. You have really helped to reassure me that it was probably the correct decision and I can put my unease to bed.  

leosayer

QrizB said:

Lindlou said:

Not especially, no. It's more the fact the IFA did his own review then stated he was no worse off which is difficult to know unless you know how long you will live for?

It's impossible for any of us to say for certain without doing all the same fact-finding that the IFA did back when your husband transferred, but one way (not the only way) would be to look at what guaranteed income you could buy with £270k (less the 25% tax-free).

Today, for example, £202k (£270k - £68k TFLS) could but a 65-year-old an inflation-linked income of about £9800 (see third line of best-buy table here). That's more than the £9000 pa that he surrendered, so it's possible that your husband is better off with the DC pot than he would've been with the DB pension.

The "today" point is important.

Do the same calculation at another point in time and the results may be materially different.

artyboy

Ibrahim5 said:

Pretty standard behaviour for an IFA. Disgusting.

Oh Lordy, he's back...