Pension Scheme Buyout

Posterlady

So have any of you been through a Defined Benifits pension buy out in which your pension has been transferred to an insurance company? If so, when were you informed that this was going to happen?

I’ve been up most of the night worrying because my husband’s pension was due this Saturday on his birthday. We found out a week ago when we contacted company because we hadn’t heard from them that they had lost the paperwork that he sent in. We were assured that this would be sorted by his birthday tomorrow. We contacted them again yesterday and were told that the pension had been bought out by an insurance company and that the figures we were given in September could all have changed and they need to contact the insurance company to find out what they are. So we find ourselves two days before my husband‘s birthday with all this uncertainty. This is our main pension.

I can’t believe that they can do this without telling us that it’s about to happen. We’ve had no forms to sign and no paperwork. I would’ve thought that we would do that for GDPR purposes alone.

this is all extremely stressful

Marcon

https://forums.moneysavingexpert.com/discussion/6653953/pension-scheme-buyout

I'm not surprised you are finding it stressful. Plenty of people on this forum will have been through a DB buyout, either as a scheme member or an adviser to a scheme which has been bought out. There should have been regular communications from the trustees to the members, including information about the 'buy in' (a stage which precedes a buy out, usually by a couple of years or so) and then further communications when the actual buy out is underway. If the scheme was in surplus, it's mandatory to give members information about this, including their right to make representations to the Pensions Regulator if they have objections to the process the trustees followed in respect of handling that surplus.

For whatever reason that clearly hasn't happened here and the priority is to sort out what's going on and when your husband can expect his pension to be paid. You've referred to contacting 'the company' - do you mean his former employer, or the party which has until now been handling the day to day administration of the scheme?

molerat

My DB was transferred to L&G. We were written to in late 2023 that a bulk purchase annuity deal had been agreed, updated mid 2024 via the newsletter, sent notice of actual dates late 2024 and transferred May 2025. All went seamlessly. I was though already receiving a pension so not having to retire during the transition. Are you sure he had not had any communication even through "throw straight in the bin" newsletters ? Interesting though that you are speaking to the administrators of the scheme as with mine all the contacts changed to L&G on the date of transfer for which we had a letter clearly stating x up to xx.xx.2025 and L&G from yy.xx.2025.

Silvertabby

Not all schemes are equal....

Mr S. had a tiny private sector pension that paid little more than £25 per month after tax, having been in payment for some years

The first we heard of the buy out was a letter offering a one-off pre tax lump sum of £8K, under the small pot de-minima rules.

Didn't bother us (that's how I got my Rhino greenhouse !) but worrying if those with important pensions were treated in the same off-hand manner.

vacheron

I have a deferred Rolls-Royce final salary pension which was recently transferred (sold) to an insurance company, I was recieving numerous info and updates by e-mail and letter for at least 6 months prior to the actual transfer.

My Rolls-Royce pension portal still works fine for valuations and getting estimates for different retirement dates, cash lump sum adjustements and bridging options etc.

MarkCarnage

The buy out in itself probably shouldn't be a cause for concern. It will in most cases provide greater security for the benefits.
It sounds like your main concern is what have the scheme administrators been doing in the run up to your husband's retirement. How long ago did he send in the paperwork relating to his forthcoming retirement (sounds like September 2025?) Surprised that there hasn't been a chaser if it's been a long time period.
It is also very odd that they first assured you that it would all be sorted this week, then suddenly it changes to refer to a buyout. While it's possible, but unlikely, that the administrator may not have known this in September, I would be pretty sure that they would have known in earlier in the week….between losing the paperwork and then misinforming you they have not done a good job.
I'd be very surprised if the numbers given to you in September will have changed much if at all….normally in a buy out the only difference would be that any 'discretionary' issues (ones not covered by the Scheme rules) would be removed, but the insurer would have to honour the terms embodied in the rules.
Who is the scheme Administrator? I'd be asking them some direct questions about their handling of this and why you have been left in such uncertainty at a time like this. If you feel you are not getting satisfactory answers from them, contact the Scheme Trustees or the receiving insurance company.

dunstonh

I can’t believe that they can do this without telling us that it’s about to happen. We’ve had no forms to sign and no paperwork. I would’ve thought that we would do that for GDPR purposes alone.

Normally, with buyouts, you are kept informed of what is going to happen. No forms or paperwork is normally necessary. GDPR is not an issue.

It can be a sluggish process though.

Posterlady

https://forums.moneysavingexpert.com/discussion/comment/81871593#Comment_81871593

thank you for this. We sent the paperwork in at the beginning of December (after the budget). They promptly mislaid it. I was told that they don’t send reminders out ‘because so many people do not send in the paperwork, so we assume that if we haven’t had the paperwork, then the member does not want to take their pension yet.” This means that their system relies on the post being reliable.

I cannot understand why, given the imminence of my husbands retirement, they did not send out an explanation with the new figures in November. I was told that they were waiting for his paperwork to come in. So we then would have made decisions based on figures given in September, then been told after signing the paperwork that the figures had changed!

As it is, we are still waiting for the new figures. It is my husbands birthday today. No pension money is in our account as it should have been, and he is very fed up with it all! We now have to wait to find out what the figures are, having only found out they might change three days ago!

It really sucks!

Posterlady

Nope. No communication at all. I am in the same scheme, I didn’t get any communication either.

DRS1

Did you ask if the payment (when it is made) will be backdated to his birthday (with interest added for late payment)?

FIREDreamer

We went through a buy in with PIC last year with no issues - well they paid a pension instalment a day late (I didnt notice) and sent a letter apologising.

The buy in process took over 2 years.

No whispers yet of proceeding to a buy out, but it is PIC paying the pension now, not the scheme trustees.