Def Benefit transfer

Marcon

MallyGirl said:

You don't mention the size of the CETV but, if you can find an advisor, then you would be looking at fees of £5k ballpark or maybe more. That would payable even if the advice was not to transfer. You would then only have the option to transfer into a stakeholder pension as they have to accept the transfer as long as you have had advice (even if you choose not to follow it).

...and could then transfer on to a SIPP if you wished, without further advice, because it'll be a DC to DC transfer with no safeguarded benefits.

optoutDB

Can you take the pension now?

I have the same concerns, and am about to draw/take my DB pension (age55). If I take lump sum and stepped option I can get a lot of it out in the next 10 years. 

Albermarle

MarkCarnage said:

Your user name probably sums up what you will need to be......
You haven't given any specific details but assuming it's over £30k then you do need advice. The chances that the advice will support a transfer are very low. You will also have to pay several thousand for it assuming you can find someone willing to do it. The reasons for this are that the professional indemnity costs for any adviser doing this work are very high, and that it is a fairly detailed piece of work. 
Your guess about UK inflation may or may not be correct, but what makes you think that you can do better in protecting an income stream in a SIPP, also bearing in mind that you would be effectively giving up longevity insurance too? 
There are plenty of other threads on this topic on here. 

This was the latest one ( of many )

DB Transfer 'extortion' ?! — MoneySavingExpert Forum

Tommyjw

Cobbler_tone said:

On-the-coast said:

However if you’ve been deferred since 2003 you’ve likely still got some headroom for inflation since the revaluation takes into account cumulative inflation 

This stuck out for me. Is this typically true of DB schemes? I can't see any mention in mine.
e.g. if inflation year by year was 2%,2%,2%,10%,11%,2%,2% the scheme catches up to the limits of the capped increase level? I think that is what you are implying. 

Yes this is how DB schemes work for applicable benefits e.g non-GMP (the statutory way , so a Scheme could have decided to do something different, as long as it's better).

It's something that isn't really often, from what I've seen, explained very well. 

See https://forums.moneysavingexpert.com/discussion/6381145/deferred-db-pension-revaluation-are-the-5-2-5-limits-compounded-also-partial-years

Sarahspangles

Cobbler_tone said:

On-the-coast said:

However if you’ve been deferred since 2003 you’ve likely still got some headroom for inflation since the revaluation takes into account cumulative inflation 

This stuck out for me. Is this typically true of DB schemes? I can't see any mention in mine.
e.g. if inflation year by year was 2%,2%,2%,10%,11%,2%,2% the scheme catches up to the limits of the capped increase level? I think that is what you are implying. 

It’s true for some, but not all. There’s a huge variation in the terms and conditions of DB schemes.

bjorn_toby_wilde

Cobbler_tone said: lol

On-the-coast said:

However if you’ve been deferred since 2003 you’ve likely still got some headroom for inflation since the revaluation takes into account cumulative inflation 

This stuck out for me. Is this typically true of DB schemes? I can't see any mention in mine.
e.g. if inflation year by year was 2%,2%,2%,10%,11%,2%,2% the scheme catches up to the limits of the capped increase level? I think that is what you are implying. 

It’s true of most DB schemes

bjorn_toby_wilde

optoutDB said:

Can you take the pension now?

I have the same concerns, and am about to draw/take my DB pension (age55). If I take lump sum and stepped option I can get a lot of it out in the next 10 years. 

I doubt you’ll come out of that ahead, but good luck.

optoutDB

bjorn_toby_wilde said:

I doubt you’ll come out of that ahead, but good luck.

You doubt I can do better with the money than: maybe keep up with inflation ?  

That's rather pessimistic.

bjorn_toby_wilde

optoutDB said:

bjorn_toby_wilde said:

I doubt you’ll come out of that ahead, but good luck.

You doubt I can do better with the money than: maybe keep up with inflation ?  

That's rather pessimistic.

Maybe, but surely it’s not as simple as just keeping up with inflation is it?

You also have to consider the reduction for early payment and the commutation rate on the lump sum.

The other issue would be tax. A lump sum could take a few years to move into ISAs at £20k per year.  Depending on your situation you could be paying tax on the pension too.

Aretnap

Optimist101 said:

Sarahspangles said:

Optimist101 said:

Thanks all. I suspected there was something behind the reluctance of any advisor to look at it. 

In terms of the logic, GBP has depreciated 18% against the USD in last 10 years. US markets generally do better than the UK. The macro scene is more favourable there than the UK for the foreseeable future. So there are too many positives to ignore. This is basically a variant of the Yen carry trade of the last few years. 
Cheers

But those aren’t your problem, because your benefit is defined. They are the employer or fund’s problem.

The other issues you mentioned like revaluation rules or spousal pension are relevant. 

Quite right, but if you don't think they are doing a good job then why persist with mediocrity. 

Who cares? Whether they do a good,  bad or indifferent job is no concern of yours - you get the same pension regardless. There might work be good reasons for transferring out of a DB pension, but the fact that you didn't agree with the way the trusts are managing the fund isn't one of them. 

I'm any event their remit is not to make as much money as possible. It's to make enough money to meet the scheme's obligations while taking as little risk as is consistent with that goal. If you want to measure their performance against other investment funds, mediocrity will do very nicely.