Defined benefit cash balance - do I need IFA?

eddiedog

I have a final salary pension from an old employer. In addition there’s a ‘Cash Balance’ element, I’m assured that although this is a DB there are no safeguarded elements to it like the Final Salary element has. 

The cash balance element is only growing at a maximum of 2.5% pa and so I’d like to move it to a scheme linked to the market. Does anyone know if I have to get IFA to move this cash balance element? It’s more than £30k.
 I did approach a IFA but they won’t touch it as it’s deemed too high risk :-( I don’t particularly want to have to pay the high fees associated with the final salary scheme for advice but starting to think I might have to :-(

any help would be much appreciated 

dunstonh

 Does anyone know if I have to get IFA to move this cash balance element?

If it is separate from the main scheme and cannot influence the payout on the main scheme in any way, then it is not treated as having safeguarded benefits in that respect.

 I did approach a IFA but they won’t touch it as it’s deemed too high risk :-( I don’t particularly want to have to pay the high fees associated with the final salary scheme for advice but starting to think I might have to

That suggests it is integrated into the main scheme in some way unless they have misunderstood.

I deal with a lot of people with a certain motor manufacturer that has a cash balance element to their defined benefit scheme, and it is not high risk in that respect.  It doesn't require any extra regulatory permissions.   

So, the devil is in the detail.

eddiedog

dunstonh said:

 Does anyone know if I have to get IFA to move this cash balance element?

If it is separate from the main scheme and cannot influence the payout on the main scheme in any way, then it is not treated as having safeguarded benefits in that respect.

 I did approach a IFA but they won’t touch it as it’s deemed too high risk :-( I don’t particularly want to have to pay the high fees associated with the final salary scheme for advice but starting to think I might have to

That suggests it is integrated into the main scheme in some way unless they have misunderstood.

I deal with a lot of people with a certain motor manufacturer that has a cash balance element to their defined benefit scheme, and it is not high risk in that respect.  It doesn't require any extra regulatory permissions.   

So, the devil is in the detail.

Thank you! 

The company’s pension manager has told me it doesn’t have any safeguards so I hope that means it’s separate. 

Please could you tell me  if I’d need any evidence of financial advice to move it if it is separate?

Marcon

eddiedog said:

dunstonh said:

 Does anyone know if I have to get IFA to move this cash balance element?

If it is separate from the main scheme and cannot influence the payout on the main scheme in any way, then it is not treated as having safeguarded benefits in that respect.

 I did approach a IFA but they won’t touch it as it’s deemed too high risk :-( I don’t particularly want to have to pay the high fees associated with the final salary scheme for advice but starting to think I might have to

That suggests it is integrated into the main scheme in some way unless they have misunderstood.

I deal with a lot of people with a certain motor manufacturer that has a cash balance element to their defined benefit scheme, and it is not high risk in that respect.  It doesn't require any extra regulatory permissions.   

So, the devil is in the detail.

Thank you! 

The company’s pension manager has told me it doesn’t have any safeguards so I hope that means it’s separate. 

Please could you tell me  if I’d need any evidence of financial advice to move it if it is separate?

If it's 'stand alone' then you don't need advice if you want to move it. As the company has a pensions manager, ask them to confirm that's the case and you don't need to receive advice before transferring it.

eddiedog

Thanks both your help. 

dunstonh

Please could you tell me  if I’d need any evidence of financial advice to move it if it is separate?

No you don't need evidence.  But the comments from the other IFA are interesting?    Did they see the details of the scheme? - if they did and have refused it then there must have been something they saw that meant they couldn't do it.    

The one I do a lot of only requires me to contact the pension administrators, who send me an email saying there are no safeguarded benefits and that the cash balance scheme cannot be used in conjunction with the main scheme or any scheme available through the administrator and must be transferred to a registered pension scheme.   That is about as low risk as you can get.     So, what did the other IFA see that suggests it is high risk?  

eddiedog

dunstonh said:

Please could you tell me  if I’d need any evidence of financial advice to move it if it is separate?

No you don't need evidence.  But the comments from the other IFA are interesting?    Did they see the details of the scheme? - if they did and have refused it then there must have been something they saw that meant they couldn't do it.    

The one I do a lot of only requires me to contact the pension administrators, who send me an email saying there are no safeguarded benefits and that the cash balance scheme cannot be used in conjunction with the main scheme or any scheme available through the administrator and must be transferred to a registered pension scheme.   That is about as low risk as you can get.     So, what did the other IFA see that suggests it is high risk?  

Not sure but they also weren’t keen on just a one off transaction, I think they wanted an in going service type contract which I’m not interested in so maybe they didn’t actually look in to it too much. They’ve referred me to Pensionhelp but they don’t seem to deal with folk under 50 (I’m 48) so I’m not sure that has legs but I’ve not spoken with them yet. 

dunstonh

eddiedog said:

dunstonh said:

Please could you tell me  if I’d need any evidence of financial advice to move it if it is separate?

No you don't need evidence.  But the comments from the other IFA are interesting?    Did they see the details of the scheme? - if they did and have refused it then there must have been something they saw that meant they couldn't do it.    

The one I do a lot of only requires me to contact the pension administrators, who send me an email saying there are no safeguarded benefits and that the cash balance scheme cannot be used in conjunction with the main scheme or any scheme available through the administrator and must be transferred to a registered pension scheme.   That is about as low risk as you can get.     So, what did the other IFA see that suggests it is high risk?  

Not sure but they also weren’t keen on just a one off transaction, I think they wanted an in going service type contract which I’m not interested in so maybe they didn’t actually look in to it too much. They’ve referred me to Pensionhelp but they don’t seem to deal with folk under 50 (I’m 48) so I’m not sure that has legs but I’ve not spoken with them yet. 

ahh, there is a bit of new information there that changes things...
At 48, you cannot transfer it by itself as it is still built into the main scheme.  It is not separate.  So, it would require a pension transfer specialist.

eddiedog

dunstonh said:

eddiedog said:

dunstonh said:

Please could you tell me  if I’d need any evidence of financial advice to move it if it is separate?

No you don't need evidence.  But the comments from the other IFA are interesting?    Did they see the details of the scheme? - if they did and have refused it then there must have been something they saw that meant they couldn't do it.    

The one I do a lot of only requires me to contact the pension administrators, who send me an email saying there are no safeguarded benefits and that the cash balance scheme cannot be used in conjunction with the main scheme or any scheme available through the administrator and must be transferred to a registered pension scheme.   That is about as low risk as you can get.     So, what did the other IFA see that suggests it is high risk?  

Not sure but they also weren’t keen on just a one off transaction, I think they wanted an in going service type contract which I’m not interested in so maybe they didn’t actually look in to it too much. They’ve referred me to Pensionhelp but they don’t seem to deal with folk under 50 (I’m 48) so I’m not sure that has legs but I’ve not spoken with them yet. 

ahh, there is a bit of new information there that changes things...
At 48, you cannot transfer it by itself as it is still built into the main scheme.  It is not separate.  So, it would require a pension transfer specialist.

Oh no! So I’d have to transfer the final salary and cash balance together unless I wait 2 years?

Marcon

eddiedog said:

dunstonh said:

eddiedog said:

dunstonh said:

Please could you tell me  if I’d need any evidence of financial advice to move it if it is separate?

No you don't need evidence.  But the comments from the other IFA are interesting?    Did they see the details of the scheme? - if they did and have refused it then there must have been something they saw that meant they couldn't do it.    

The one I do a lot of only requires me to contact the pension administrators, who send me an email saying there are no safeguarded benefits and that the cash balance scheme cannot be used in conjunction with the main scheme or any scheme available through the administrator and must be transferred to a registered pension scheme.   That is about as low risk as you can get.     So, what did the other IFA see that suggests it is high risk?  

Not sure but they also weren’t keen on just a one off transaction, I think they wanted an in going service type contract which I’m not interested in so maybe they didn’t actually look in to it too much. They’ve referred me to Pensionhelp but they don’t seem to deal with folk under 50 (I’m 48) so I’m not sure that has legs but I’ve not spoken with them yet. 

ahh, there is a bit of new information there that changes things...
At 48, you cannot transfer it by itself as it is still built into the main scheme.  It is not separate.  So, it would require a pension transfer specialist.

Oh no! So I’d have to transfer the final salary and cash balance together unless I wait 2 years?

Your company has a pensions manager. They have the full details at their fingertips so your best bet is to check with them.