Pension transfer issue: Barclays & Vanguard

ossie48

We have a bit of an issue regarding an ongoing pension transfer into a Vanguard SIPP.

My wife is attempting to transfer a Barclays Afterwork pension which is defined as a 'Hybrid – Cash balance (Credit Account) and Defined Contribution (Investment Account)'.

Vanguard contacted Barclays to confirm the scheme details. Barclays replied to them with this :

'The UKRF is a hybrid occupational pension scheme with both money purchase and final salary benefits. The benefits to be transferred for the member are Cash Balance Money Purchase benefits.

Vanguard are now insisting we seek the advice of an IFA before proceeding stating 'Your existing policy contains defined benefits which are defined as Safeguarded Benefits under the Pensions Schemes Act 2015'.

We've contacted Barclays who say it doesn't contain 'defined benefits', however Vanguard are insisting on the information provided it does.

With this pension my wife has three choices at age 60.
1. Annuity
2. Cash the whole lot in.
3. Transfer to another scheme.

My understanding is that IFA's are not dealing with DB transfers however we always thought this was a DC scheme, albeit it Barclays describe it as 'Hybrid' so how can we or anyone else possibly transfer these pensions ?

Notwithstanding Vanguard have in their latest correspondence referred to my wife under a completely different name (a male name).

Is this incompetence from Vanguard (obviously the name thing is) or miscommunication between both or does the hybrid pension contain defined benefits, in which case it will be impossible to transfer.   

El_Torro

If you are happy to transfer the pension, and you are happy to lose any benefits that your Barclays pension may or may not have, then one option is to try to transfer it to a platform that isn't Vanguard. The issue might be with Vanguard's interpretation and other platforms could be less fussy. If you really want to use Vanguard you can transfer it to them afterwards.

If this were me I would want to be sure that you currently have no safeguarded benefits before proceeding though.

DRS1

I suspect the Barclays scheme does include defined benefits but they do seem to be saying your wife's benefits (at least the ones being transferred) do not.  Your best bet would be to ask Barclays to clarify that to Vanguard.  It is usually the transferring scheme which gets hung up about advice and if they say to Vanguard that they don't think it is needed then hopefully Vanguard will shut up.

ossie48

El_Torro said:

If you are happy to transfer the pension, and you are happy to lose any benefits that your Barclays pension may or may not have, then one option is to try to transfer it to a platform that isn't Vanguard. The issue might be with Vanguard's interpretation and other platforms could be less fussy. If you really want to use Vanguard you can transfer it to them afterwards.

If this were me I would want to be sure that you currently have no safeguarded benefits before proceeding though.

Thanks. We did due diligence with Barclays, they assured us it was a DC scheme with no benefits. As we'd be transferring two years before my wifes natural retirement date we'd lose about £3k compared with the transfer quote provided.

The idea is that as a non earner she draws the pension down into a S&S ISA before state pension age.

To be fair on a previous thread (about 5 weeks back) I was warned about Vanguard, we only used them as she has a SIPP already set up and we find the platform user friendly.

If no joy we may look at someone else.
  

Albermarle

 We did due diligence with Barclays, they assured us it was a DC scheme with no benefits.

However in your OP, you quoted Barclays as saying this to Vanguard.

The UKRF is a hybrid occupational pension scheme with both money purchase and final salary benefits.

So it is not surprising that Vanguard have reacted the way they have, on receiving that statement.

I would agree with what @DRS1 said in an earlier post. You need Barclays to make it clear that any 'Final salary benefits' are staying in the Barclays scheme ( or are not relevant in your wife's case)  and only DC money would be transferred. ( assuming that is what is planned)

dunstonh

We did due diligence with Barclays, they assured us it was a DC scheme with no benefits. 

But they haven't worded their response to Vanguard very well.  I can see why Vanguard won't accept it as it stands.  I also had a Barclays after-work transfer that we started work on over 12 months ago and parked the transfer because we couldn't get a firm answer from Barclays. 

They sent the 1964 scheme details along with the Afterwork, and on much of the paperwork, they don't differentiate between the schemes.    So, it can read as a DB scheme. I just checked the docs we got from Barclays and it made reference to DB schemes, CETVs only being issued once a year,  GMP.  They also said that our client was a legacy member of the 1964 scheme.   Chances are they sent similar to Vanguard.

Brie

OK - I'm an ex Barclays pension scheme admin from when the scheme was run in house.  They began the transfer the admin out of house to WTW at the time I was there (2010?) and I actually got to train some of the WTW staff that were taking over the scheme.  

I always knew that Afterwork was a hybrid scheme = basically a DC but with an underlying guarantee for a portion of it that meant that it is better than a normal DC scheme.  So far, so good.  But it is NOT a DB scheme.  At least not in the way that the experienced people here think of a DB.  Barclays 1964 scheme was DB and I would agree that it would be foolish to transfer that out.  But Afterworks cannot be taken as a monthly pension.  There is no option to do that.  It's just that a portion of the DC scheme will NOT lose value as a normal DC does, hence referring to it as enhanced or hybrid. 

So I have been told by WTW admins with my Afterwork I have only 2 options.  1 is to transfer it out to a personal pension of some sort.  2 is to use the money to buy an annuity.  There is absolutely no option of taking it directly from the scheme as a monthly pension so there should be no need to have a specialist IFA look in to what's the best thing to do and no need to pay for them to tell you what the WTW admins have already said.  

I have been working to get my pension sorted for the last couple of years.  I've been through IFAs who have come out with the stupidest responses to my wish to move the funds so that I can actually access them.  I have finally found a company (Aviva) that with whom I would be happy to buy an annuity and they have confirmed that there is no IFA advice required if I get the funds transferred directly to them from Afterwork.   

I don't know if the company I am going with would have a suitable SIPP for your wife's transfer or whether they would consider things differently if it's a SIPP rather than an annuity.  I have asked the WTW admins who people transfer out to (as an indication of who is receptive to taking a transfer more easily) but they claim due to DP they cannot comment.  I understand but it hasn't really been that helpful.

If your wife might consider an annuity she might find it easier to follow the proscribed process of going through HUB to arrange this.  I don't know how well that will work as I've not taken that route myself.

Brie

dunstonh said:

We did due diligence with Barclays, they assured us it was a DC scheme with no benefits. 

But they haven't worded their response to Vanguard very well.  I can see why Vanguard won't accept it as it stands.  I also had a Barclays after-work transfer that we started work on over 12 months ago and parked the transfer because we couldn't get a firm answer from Barclays. 

They sent the 1964 scheme details along with the Afterwork, and on much of the paperwork, they don't differentiate between the schemes.    So, it can read as a DB scheme. I just checked the docs we got from Barclays and it made reference to DB schemes, CETVs only being issued once a year,  GMP.  They also said that our client was a legacy member of the 1964 scheme.   Chances are they sent similar to Vanguard.

I quite agree that the wording may be part of the problem and that it can take months to get the info from WTW.  

Both 1964 and Afterwork are part of Barclays UKRF which doesn't help much.  There are (or were) about 50 different branches of UKRF which were, possibly still are, a complete tangle.

As for your client being a legacy member of the 1964 scheme.....I don't know if you are aware but when 1964 closed to new members there was a push (like with so many schemes) for people to stop being a member of 1964 and join Afterwork instead.  I'm aware that a lot of people did this, some managing to transfer out their 1964 benefits (pre all the IFA advice requirements) or they may have got a refund for not having vested service.  I know some made the switch to Afterwork (bad move in my opinion) which could mean that they were both a pensioner (1964) and an active member (Afterwork) as they continued to work for Barclays.   

If you are still working on your client's transfer you might ask to see the information sent directly to them which states more clearly about Afterwork without any of the 1964 bits included.  If you can't accept that from your client it might help you form a question that Barclays (or WTW in fact) can answer more easily and in a way that helps the transfer proceed.  

ossie48

dunstonh said:

We did due diligence with Barclays, they assured us it was a DC scheme with no benefits. 

But they haven't worded their response to Vanguard very well.  I can see why Vanguard won't accept it as it stands.  I also had a Barclays after-work transfer that we started work on over 12 months ago and parked the transfer because we couldn't get a firm answer from Barclays. 

They sent the 1964 scheme details along with the Afterwork, and on much of the paperwork, they don't differentiate between the schemes.    So, it can read as a DB scheme. I just checked the docs we got from Barclays and it made reference to DB schemes, CETVs only being issued once a year,  GMP.  They also said that our client was a legacy member of the 1964 scheme.   Chances are they sent similar to Vanguard.

Likewise I thought the Barclays WTW response was a little vague when the Barclays UKRF actually covers multiple pension schemes both DC and DB. I was surprised Vanguard just accepted the response at face value instead of enquiring for more detail.
 
My wife also has a 1964 DB Scheme with a one digit difference in the reference number so presumed there had been confusion but no they had the correct scheme.

You say you 'parked it' , that doesn't inspire confidence as it will need to go somewhere soon.  

ossie48

Albermarle said:

 We did due diligence with Barclays, they assured us it was a DC scheme with no benefits.

However in your OP, you quoted Barclays as saying this to Vanguard.

The UKRF is a hybrid occupational pension scheme with both money purchase and final salary benefits.

So it is not surprising that Vanguard have reacted the way they have, on receiving that statement.

I would agree with what @DRS1 said in an earlier post. You need Barclays to make it clear that any 'Final salary benefits' are staying in the Barclays scheme ( or are not relevant in your wife's case)  and only DC money would be transferred. ( assuming that is what is planned)

 
As stated their response to Vanguard appears extremely vague, that said I understood the part of the reply you missed out 'The benefits to be transferred for the member are Cash Balance Money Purchase benefits' might have indicated this was a DC pension but clearly it doesn't. (I've no idea I'm not a pension expert)

Barclays (WTW) informed us before we decided to transfer it was a DC scheme(we already knew this) hence the due diligence. They instigated the whole thing by sending out a pack reminding us we have to do something before the NRD. My wife has three options 1. annuity, 2.  take the whole lot as cash or 3. transfer elsewhere. 

Are they really being that obtuse, it appears so yet on one hand they actually want my wife to do something. 

ossie48

Brie said:

OK - I'm an ex Barclays pension scheme admin from when the scheme was run in house.  They began the transfer the admin out of house to WTW at the time I was there (2010?) and I actually got to train some of the WTW staff that were taking over the scheme.  

I always knew that Afterwork was a hybrid scheme = basically a DC but with an underlying guarantee for a portion of it that meant that it is better than a normal DC scheme.  So far, so good.  But it is NOT a DB scheme.  At least not in the way that the experienced people here think of a DB.  Barclays 1964 scheme was DB and I would agree that it would be foolish to transfer that out.  But Afterworks cannot be taken as a monthly pension.  There is no option to do that.  It's just that a portion of the DC scheme will NOT lose value as a normal DC does, hence referring to it as enhanced or hybrid. 

So I have been told by WTW admins with my Afterwork I have only 2 options.  1 is to transfer it out to a personal pension of some sort.  2 is to use the money to buy an annuity.  There is absolutely no option of taking it directly from the scheme as a monthly pension so there should be no need to have a specialist IFA look in to what's the best thing to do and no need to pay for them to tell you what the WTW admins have already said.  

I have been working to get my pension sorted for the last couple of years.  I've been through IFAs who have come out with the stupidest responses to my wish to move the funds so that I can actually access them.  I have finally found a company (Aviva) that with whom I would be happy to buy an annuity and they have confirmed that there is no IFA advice required if I get the funds transferred directly to them from Afterwork.   

I don't know if the company I am going with would have a suitable SIPP for your wife's transfer or whether they would consider things differently if it's a SIPP rather than an annuity.  I have asked the WTW admins who people transfer out to (as an indication of who is receptive to taking a transfer more easily) but they claim due to DP they cannot comment.  I understand but it hasn't really been that helpful.

If your wife might consider an annuity she might find it easier to follow the proscribed process of going through HUB to arrange this.  I don't know how well that will work as I've not taken that route myself.

Thankyou Brie. As a non earner we were hoping to transfer out and drawdown before state pension age, topping up my wifes S&S ISA each year. It's not that big an amount £70k. She will also have the small 1964 DB pension at aged 60 that naturally we've left untouched. 

This is quickly becoming a headache, that said we have some time on our hands.