Pension transfer issue: Barclays & Vanguard

ossie48

Just an update. We've had correspendence from Vanguard that they now believe the transfer can take place without seeking financial advice but need their 'admin team' to confirm. The 'admin team' have been quite slow in dealing with various aspects so far (wet signatures etc) - there's also been a disparity between our various points of contact at Vanguard and the admin team to date (although we've been promised a single point of contact).

Incidentally I've done a search on ' Barclays Afterwork', again further issues highlighted in transfering this pension. A thread on here points to a successful transfer to PensionBee who seemed to have grasped the nettle so if no joy we'll probably try them.   

xylophone

https://assets.publishing.service.gov.uk/media/5a80b577ed915d74e33fbf54/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

This factsheet is intended to help pension scheme providers determine:

• whether certain types of pension benefits which contain a promise, including those with a guaranteed annuity rate (GAR), are safeguarded benefits for the purposes of the new advice requirement

• when the exception to the requirement to take independent advice for those with safeguarded benefits worth £30,000 or less applies. 

1. Safeguarded benefits

   Safeguarded benefits are defined in legislation as pension benefits which are not money purchase or cash balance benefits.

   1. In practice, safeguarded benefits are any benefits which include some form of guarantee or promise during the accumulation phase about the rate of secure pension income  

   1. These include:

   1. under an occupational pension scheme, a promised level of income calculated by reference to the member’s pensionable service in the employment of the pension scheme’s sponsoring employer (for instance, under a final salary scheme)

   2. a promised level of income (or guaranteed minimum level of income) calculated by reference to the contributions or premiums paid by or in respect of the member (for instance, under some older personal pension policies)

   3. a promised minimum rate at which the member will have the option to convert their accumulated pot or fund into an income at a future point, usually on the member reaching a particular age (generally known as a guaranteed annuity rate, or guaranteed annuity option). 

   
   https://www.yumpu.com/en/document/read/37920913/afterwork-scheme-booklet-barclays
   
   Afterwork scheme  benefits do not appear to fit within the definition of " safeguarded benefits"?

dunstonh

Afterwork scheme  benefits do not appear to fit within the definition of " safeguarded benefits"?

They don't.  However, the administrators for the scheme don't send documentation specific to the afterwork scheme.   The inlcude the 1964 DB scheme with it.

And in these days of audit trails, even if you know something, you need the evidence to support it.

ossie48

Another update.

Vanguard 'admin' have agreed IFA advice is not required and things are apparently proceeding.

ossie48

Things are progressing quickly. Barclays / WTW have advised the pension has been transferred to Vanguard (although Vanguard haven't comfirmed just yet).

The balance is going into a Vanguard SIPP currently invested in VLS60.

The intention is to take the 25% tax free lump sum and drawdown the rest before state pension age which is 9 years. 

Would VLS60 still be appropriate in drawdown or should we look at going even more conservative. We have adequate pension provisions / cash / S&S ISA's so we really don't need to be mega careful, just wondering what peoples thoughts are ?  

dunstonh

Would VLS60 still be appropriate in drawdown or should we look at going even more conservative. We have adequate pension provisions / cash / S&S ISA's so we really don't need to be mega careful, just wondering what peoples thoughts are ?  

Personal choice based on individual circumstances and cannot be viewed in isolation.

Scenario 1:   Someone with £100k in VLS60 and £200k cash 
Total: 300k:  60k in equities, 40k in bonds and 200k cash.
So, in reality, they have just 20% in equities, 13% in bonds and 66% in cash.

Scenario 2:  Someone with £100k in VLS60 and £10k cash 
55% equities, 36% in bonds 9% in cash.

Same investment fund held by both but a big difference in risk taken.

Putting aside spending habits and accessibility requirements along with behaviour and knowledge risk, scenario 1 probably isn't taking enough risk and scenario 2 is taking too much.

ossie48

dunstonh said:

Would VLS60 still be appropriate in drawdown or should we look at going even more conservative. We have adequate pension provisions / cash / S&S ISA's so we really don't need to be mega careful, just wondering what peoples thoughts are ?  

Personal choice based on individual circumstances and cannot be viewed in isolation.

Scenario 1:   Someone with £100k in VLS60 and £200k cash 
Total: 300k:  60k in equities, 40k in bonds and 200k cash.
So, in reality, they have just 20% in equities, 13% in bonds and 66% in cash.

Scenario 2:  Someone with £100k in VLS60 and £10k cash 
55% equities, 36% in bonds 9% in cash.

Same investment fund held by both but a big difference in risk taken.

Putting aside spending habits and accessibility requirements along with behaviour and knowledge risk, scenario 1 probably isn't taking enough risk and scenario 2 is taking too much.

I'm anon so here goes :

As stated currently have more than adequate DB / DC pension provision of £4200 month net plus another smallish DB pension in 18 months. Seven and nine years from state pension age. No debts, mortgage paid both retired. 

We currently have £358k in Investments and cash.

48% Equities
27% Bonds
25% Cash

I'm not sure if this demonstrates our risk profile but appears to put us in the middle ground.

The small pension transfer plus SIPP equates to £82k. The idea is to drawdown and reinvest, so a mix of VLS40/ VLS60 in drawdown might be appropriate I guess. ( I appreciate there are other Investment companies but we just want to keep things simple with Vanguard) 

I guess it's a personal decision but assume the idea isn't wholly outrageous or anything.

ossie48

Just for closure the money has today been deposited into Vanguard.

Now to work on the drawdown strategy. 

Albermarle

ossie48 said:

dunstonh said:

Would VLS60 still be appropriate in drawdown or should we look at going even more conservative. We have adequate pension provisions / cash / S&S ISA's so we really don't need to be mega careful, just wondering what peoples thoughts are ?  

Personal choice based on individual circumstances and cannot be viewed in isolation.

Scenario 1:   Someone with £100k in VLS60 and £200k cash 
Total: 300k:  60k in equities, 40k in bonds and 200k cash.
So, in reality, they have just 20% in equities, 13% in bonds and 66% in cash.

Scenario 2:  Someone with £100k in VLS60 and £10k cash 
55% equities, 36% in bonds 9% in cash.

Same investment fund held by both but a big difference in risk taken.

Putting aside spending habits and accessibility requirements along with behaviour and knowledge risk, scenario 1 probably isn't taking enough risk and scenario 2 is taking too much.

I'm anon so here goes :

As stated currently have more than adequate DB / DC pension provision of £4200 month net plus another smallish DB pension in 18 months. Seven and nine years from state pension age. No debts, mortgage paid both retired. 

We currently have £358k in Investments and cash.

48% Equities
27% Bonds
25% Cash

I'm not sure if this demonstrates our risk profile but appears to put us in the middle ground.

The small pension transfer plus SIPP equates to £82k. The idea is to drawdown and reinvest, so a mix of VLS40/ VLS60 in drawdown might be appropriate I guess. ( I appreciate there are other Investment companies but we just want to keep things simple with Vanguard) 

I guess it's a personal decision but assume the idea isn't wholly outrageous or anything.

You say you already have DC pension provision, which presumably means that the DC pension is invested in some way ?
If so you should not look at the £358 K as separate to that, it should all be looked at together.

SVaz

If you have £50k in DB pensions coming in plus 2 SP in a few years,  you don’t really need to take any risk with your DC pot as long as it keeps up with inflation.   

Most people would kill to be in that position! 

Index linked Gilts maybe?