Transferring from DB after divorce.

Silvertabby · 30 April at 9:34AM

DRS1 said:

Silvertabby said:

Marcon said:

sandsy said:

If the OP doesn't want the scheme pension, then they don't require advice to transfer out, even if the pension credit is over £30k. The advice requirement applies to transfer values in respect of safeguarded benefits, not pension credits. The FCA confirmed this in guidance for advisers a few years ago (para 2.6 of FG21/3: https://www.fca.org.uk/publication/finalised-guidance/fg21-3.pdf)

Not sure that's what 2.6 says:
'You do not need the permission at all if you are advising a client on whether to join a DB scheme. Similarly, you do not need the permission if you advise an ex-spouse whether to use a pension credit awarded from a pension sharing order to acquire rights in a DB scheme. DWP has told us that where the ex-spouse has the option of becoming a member of a DB scheme, the pension credit is not regarded as safeguarded benefits (or money purchase or cash balance benefits) or a transfer payment but as a right in itself. If you advise an ex-spouse on using the pension credit to acquire rights in a DB scheme, this falls outside FCA-regulation. But if you advise them on acquiring rights in an FCA-regulated DC scheme, you must have the relevant investment advice permission.'
That seems to tally with what OP says they have been told:
'I am not currently employed and I am informed via the pension paperwork that I can transfer out to another qualifying pension arrangement as long as advice sought from an IFA as it is over £30k.'

Marcon beat me to it. In this case, the pension credit benefits would be transferred from a public sector DB scheme to a private sector DC scheme. Not only will the LGPS require at least an element of financial advice to be taken but they will also do their own due diligence to ensure that the benefits aren't being transferred to a 'dodgy dealer'.

OK Let me ask this if we cut out the DC scheme and tried to transfer the pension credit transfer payment direct to an immediate annuity which qualified as a personal pension plan would that annuity be regarded as DC or DB? Given that it provides an income of a specified amount per annum I would have thought it was DB. If so could we not say the bit in bold does not apply?

I grant that you and @Marcon think we can't cut out the DC scheme middleman. Or maybe you just know that any personal pension plan is regarded as DC because by and large that is what they are.

On the dodgy dealer issue there are a limited number of annuity providers and I would have thought most of them would pass the smell test (although if it is going via a DC scheme then it may not be obvious that the money will end up with eg Standard Life).

You can't use the CETV from a DB scheme (even when it's a pension credit) to directly buy an open market annuity. It would have to be transferred to a suitable DC scheme first.