Defined Benefit Pension transfer out

Deedee54

Newbie here so please be kind
I have an old defined benefit pension which i want to transfer out of due to the company experiencing financial difficulties and not paying into the scheme for the last 6 months. I have had a letter from the pension company stating that its looking very likely that things wont improve due to the conflicts in the middle east (thats where 60% of the income normally comes from) so theres a big chance the scheme will enter into a Pension Protected Fund. Ive asked for a transfer out valuation (i recieved this today) i was  all ready to transfer into an existing pension pot with L&G but they dont accept DB pension pots?. Also i cant get free advice through pension wise for the dame reason? the transfer value is £79k and i don t know where to go for IFA? ive had a quick look online but theres so many and unfortunatey them mostly seem quite costly? is there anywhere i can get free IFA or low cost?? any advice greatly appreciated

Brie

There's no such thing as a low cost IFA to help with a transfer out of a DB scheme.  Many will charge very large figures (I've heard of £8k+ quoted) and then recommend that the fund not be transferred.  

As for the PPF I've no experience with that so will let other comment.

molerat

You will not be able to transfer out without advice.  You need to find an IFA  https://www.moneyhelper.org.uk/en/getting-help-and-advice/financial-advisers/choosing-a-financial-adviser that has the pension transfer ticket and that advice will cost you several £K whatever the outcome, positive or negative, due to the everlasting ongoing liability they have to insure against on this type of high risk transaction.  The only pension that has to accept a DB transfer is a stakeholder - not many of them about - then move it on to a provider of your choice. With positive advice - which you stand a very high chance of not getting - you will need to look around for a provider who will accept the transfer.

MeteredOut

OP, I'd recommend searching this board for "DB Transfer Out", What you want to do is theoretically possible, but very complex, time consuming, and costly, in practice.

Do you actually need the money now? Are you working to tight timescales?

leosayer

What is the pension scheme's latest funding level eg. more or less than 100%? This should appear on the periodic statements you receive from the administrator.

The PPF is not to be feared, although there will be a 10% benefit reduction if you are younger than the scheme's normal pension age.

Albermarle

As suggested put something like 'DB Transfer' into the search box at the top of the page and settle down for an afternoons reading.
Be aware that not all the threads are recent, as interest in transferring out has waned due to the big drop off in transfer values.

dunstonh

I have an old defined benefit pension which i want to transfer out of due to the company experiencing financial difficulties and not paying into the scheme for the last 6 months.

That is unlikely to be a justifiable reason for transfer.

so theres a big chance the scheme will enter into a Pension Protected Fund.

Which is a  very sound protection scheme that runs with a surplus overall and secures your benefits better than a DC pension would.

Ive asked for a transfer out valuation (i recieved this today) i was  all ready to transfer into an existing pension pot with L&G but they dont accept DB pension pots?.

Most retail pensions wont accept a DB transfer in without advice being confirmed.   The DB scheme administrators will also want an adviser to sign th advice declaration.

. Also i cant get free advice through pension wise for the dame reason? 

That is not correct.   Pensionwise do not provide advice full stop.    That is why they won't give advice.

the transfer value is £79k and i don t know where to go for IFA? ive had a quick look online but theres so many and unfortunatey them mostly seem quite costly?

You are asking to do one of the highest risk transactions that an IFA can carry out.  Its a transaction that the regulator treats as missold unless proven otherwise and broadly speaking its only suitable in around 1 in 10 cases.    Its a massive liability risk that doesnt just cost the advice firm for one year but for every year for as long as it continues trading.

is there anywhere i can get free IFA or low cost?

Neither are available.    Nobody is going to take on that level of risk for free or low cost.  You are probably looking at around £4000-£8000 as the cost.   

Indeed, the reduction if it goes into the PPF may well be less than the cost to transfer it.

Marcon

OK, you've hit the panic button, which is understandable - but now stop for a minute and look at the facts.

Deedee54 said:

Newbie here so please be kind
I have an old defined benefit pension which i want to transfer out of due to the company experiencing financial difficulties and not paying into the scheme for the last 6 months. I have had a letter from the pension company stating that its looking very likely that things wont improve due to the conflicts in the middle east (thats where 60% of the income normally comes from) so theres a big chance the scheme will enter into a Pension Protected Fund. 

Are you saying you've had a letter which actually says that, or have your drawn that conclusion for yourself? Schemes can't even be considered for entry to the PPF unless the employer is insolvent and it would be extraordinary for the trustees to broadcast to the membership that the employer is going bust before that event is public knowledge.

Deedee54 said:

 Ive asked for a transfer out valuation (i recieved this today) i was  all ready to transfer into an existing pension pot with L&G but they dont accept DB pension pots?. 

What's the scheme's funding position? If it's well funded (or possibly in surplus), then even if the employer goes bust it won't necessarily head for the PPF if the scheme can pay benefits at least as good as those members would get from the PPF.

If the scheme is underfunded, are transfer values being paid at a reduced level? The paperwork you've received will tell you. If that's the case, transferring now makes even less sense.

Marcon

leosayer said:

What is the pension scheme's latest funding level eg. more or less than 100%? This should appear on the periodic statements you receive from the administrator.

Just to clarify - it's very unlikely you will have been receiving deferred benefit statements as this is a private sector scheme. What you're looking for is something called the Summary Funding Statement, which may be a standalone document, or embedded in a newsletter or similar communication, and is sent more or less annually.

Cherryb32

Deedee54 said:

Newbie here so please be kind
I have an old defined benefit pension which i want to transfer out of due to the company experiencing financial difficulties and not paying into the scheme for the last 6 months. I have had a letter from the pension company stating that its looking very likely that things wont improve due to the conflicts in the middle east (thats where 60% of the income normally comes from) so theres a big chance the scheme will enter into a Pension Protected Fund. Ive asked for a transfer out valuation (i recieved this today) i was  all ready to transfer into an existing pension pot with L&G but they dont accept DB pension pots?. Also i cant get free advice through pension wise for the dame reason? the transfer value is £79k and i don t know where to go for IFA? ive had a quick look online but theres so many and unfortunatey them mostly seem quite costly? is there anywhere i can get free IFA or low cost?? any advice greatly appreciated

Hi Deede54 did you find a FA that would help with the transfer without excessively high fees? 

dunstonh

Cherryb32 said:

Deedee54 said:

Newbie here so please be kind
I have an old defined benefit pension which i want to transfer out of due to the company experiencing financial difficulties and not paying into the scheme for the last 6 months. I have had a letter from the pension company stating that its looking very likely that things wont improve due to the conflicts in the middle east (thats where 60% of the income normally comes from) so theres a big chance the scheme will enter into a Pension Protected Fund. Ive asked for a transfer out valuation (i recieved this today) i was  all ready to transfer into an existing pension pot with L&G but they dont accept DB pension pots?. Also i cant get free advice through pension wise for the dame reason? the transfer value is £79k and i don t know where to go for IFA? ive had a quick look online but theres so many and unfortunatey them mostly seem quite costly? is there anywhere i can get free IFA or low cost?? any advice greatly appreciated

Hi Deede54 did you find a FA that would help with the transfer without excessively high fees? 

As is often the case with one post wonders, they never return when they don't get the answer that they want to hear.