Pension consolidation into a Salary Scheme (defined benefit) pension

SeaBreeze47

Has anyone experienced consolidation into a Salary Scheme pension? I can see from the info page on this site that its advised not to take out of these as they are valuable but doesn't mention anything about the other way. Especially as the process is complicated as the Salary scheme provider gives you a 'transfer illustration' turning the value of your money purchase pension into additional pensionable service so very hard to compare what is best. I.e. do I leave old ones alone or transfer them into this current salary scheme? Also an independent advisor told me they could not advise on 'salary scheme' pensions. 

El_Torro

From what I've heard it generally makes sense to move your DC pension into a DB pension, when given the option. It depends on your individual circumstances and the terms that the DB pension is offering. I have no first hand experience of doing this though.

Dazed_and_C0nfused

El_Torro said:

From what I've heard it generally makes sense to move your DC pension into a DB pension, when given the option. It depends on your individual circumstances and the terms that the DB pension is offering. I have no first hand experience of doing this though.

I would tend to agree, particularly as there is often opportunity to build up a new DC pot of necessary i.e. it will help add some flexibility

MX5huggy

“Salary scheme” is a term I’ve not seen before, Final Salary pension and CARE (Career Average Revalued Earnings) pension are the 2 types of DB (defined benefit) pensions commonly available. Which pension are you dealing with? 

But get your quote it’s worth considering the transfer offer, I did it for mine, it was something like £7000 of DC pension turned into £700 of annual pension updated by CPI each year (LGPS). 

Brie

As I understand it an IFA needs to be specialised to give advice specific to DB schemes.  But I thought that was just for transferring out - and that's not what you are considering.  Perhaps they misunderstood the question you asked?  If you said "I'm looking to do a transfer involving a DB scheme, can you help?" their brain likely jumped immediately to the conclusion you were looking at a transfer out.  

Do you mean the DB administrator believes a transfer in equals extra years?  The DB schemes I've experienced had any transfers in as part of the additional contributions portion so they remained a separate defined contribution type benefit rather than being incorporated into the main part of the pension.  

I'm presuming also that this is a scheme of which you are a current member (i.e. your current employment) rather than a deferred member.  Deferred members rarely, if ever, have the ability to do any transfers in.

SeaBreeze47

Thanks all. Yes its a current pension and it's a 'Final salary pension'. I was clear with the IFA I was looking to transfer into it so maybe as you say they weren't qualified in this area. They also claimed I only had a window of a year from becoming a member to be able to transfer into it (which im beyond already). I'm waiting on confirmation of this from my current employer as do not think this is true. And yes the detail on the current DM scheme says they transfer the DS value to extra years of service. Looks like its worth going through the process of obtaining all the transfer values from all my old pensions (i have 6!! moved about it a bit) and then seeing what that equates to in additional annual pension before I make the decision. 

Dazed_and_C0nfused

I don't think the one year to transfer in rule is unusual to be honest.

dunstonh

Also an independent advisor told me they could not advise on 'salary scheme' pensions. 

IFAs can advise on these but FAs may have restrictions that prevents them.  

The only area where an IFA wont advise on these is if they do not transact in transfers out of defined benefit schemes.

 I was clear with the IFA I was looking to transfer into it so maybe as you say they weren't qualified in this area.

An IFA would be qualified and authorised to provide advice on that way around.  It requires no special authorisations or qualifications.   Maybe it wasnt an IFA but an FA?  (or maybe the IFA didn't want to do it and was making up a false excuse, or they were just uncomfortable giving advice in that area if they have no experience with the employer scheme)

 They also claimed I only had a window of a year from becoming a member to be able to transfer into it (which im beyond already). I'm waiting on confirmation of this from my current employer as do not think this is true.

Some schemes require that. Not all.   Two of the most common with that requirement are the NHS and Teachers Pension.

Marcon

SeaBreeze47 said:

Thanks all. Yes its a current pension and it's a 'Final salary pension'. I was clear with the IFA I was looking to transfer into it so maybe as you say they weren't qualified in this area. They also claimed I only had a window of a year from becoming a member to be able to transfer into it (which im beyond already). I'm waiting on confirmation of this from my current employer as do not think this is true. And yes the detail on the current DM scheme says they transfer the DS value to extra years of service. Looks like its worth going through the process of obtaining all the transfer values from all my old pensions (i have 6!! moved about it a bit) and then seeing what that equates to in additional annual pension before I make the decision. 

What's the scheme - someone here may well be able to confirm whether the IFA's understanding was correct or not? If it's a public sector scheme, they are almost certainly right.

You should have been given details of the scheme, or a link to the website if there is one. Have you read/looked at that?

SeaBreeze47

Ive been told I still can so just the process of getting all the individual transfer values and then weighing it up. 

Marcon

SeaBreeze47 said:

Ive been told I still can so just the process of getting all the individual transfer values and then weighing it up. 

...and checking how they'd be handled your current scheme i.e. will they buy you extra years of pensionable service (in which case you'll need other ask your current scheme for illustrations once you have details of the transfer values), or are transfers in accepted on the basis they will provide 'money purchase' benefits?