Experience of transferring an old Defined Benefit pension to a current employers scheme

SilverOx

Good evening,

Searching the forum, most of the entry's are at least 5 years old.

Does anyone have recent experience and success on this type of transfer.

I have set the wheels in motion to meet financial advisors for initial consultations and potential costs.

I'm 53 and looking to retire at 57 if I can transfer the defined benefit pension to my current employer's scheme which is with Legal and General.

The CEVT of the defined benefit pension is £336k and would pay out £6.6k from 60.

This is a very high CETV and added to my current pension would mean a pot of between £600-700k. I would take a lump sum at 57 and drawdown the rest.

I know the IFA will drill down to see if this is viable but was seeking recent experiences of this especially if in a similar situation.

QrizB

Searching the forum, most of the entry's are at least 5 years old.

There are quite a few more recent ones. Mostly they have people complaining about the cost.

Here's a typical example from 2024.

The CEVT of the defined benefit pension is £336k and would pay out £6.6k from 60.

How recent is that CETV? A multiplier of ~50 is unusual in the present financial climate. ~20 would be more normal.

You'll need to take advice, and to pay for it even if the advice is not to move the pension.

dunstonh

The CEVT of the defined benefit pension is £336k and would pay out £6.6k from 60.

How old is that CETV?

When was the income level last revalued?

The figures you've got don't appear to be consistent with current data and expectations. CETVs are about 50% lower than what they were at their peak. So, for you to have a circa 50x multiplier at the moment seems a bit unusual. It's something we've seen people say on previous threads only to find out that they haven't updated the figures for some time

I know the IFA will drill down to see if this is viable but was seeking recent experiences of this especially if in a similar situation.

Following the dramatic fall in CETVs, the suitability rate has gone back towards 1 in 10. I.e., nine times out of ten, it would be unsuitable to transfer it.

SilverOx

I have asked for an updated CETV as the one I was naively using is 7 years old.

I will update once I have the new figure.

JoeCrystal

Glad you check!!! Also ask what is your pension in today's term as well. In that case, you should expect maybe £120k, maybe less, maybe more. Should be interested to see what they come out with when you get your actal up to date CETV.

grannypep

So you have a DBenefit pension that you are considering transferring out - is this to a DContribution scheme? As far as I'm aware, many financial advisers these days are nervous of advising DB pension holders to transfer to DC. This is due to previous pension mis-selling, not least of which involved former British Steel workers. All pension schemes are obliged to have a document called a Trust Deed which governs the scheme. This is different than "scheme guidelines or rules". The Trust Deed generally overrides scheme guidelines if there appears to be a contradiction. The Trust Deed tells people many things, including but not limited to, the basis for annual pension increases (such as if it's cpi or rpi uprates); whether the pension holder can get their pension as of right from a younger age (eg, 50) because some Trust Deeds gave a right (not a concession that Govt change age to take pension) and the right can't be taken away; what pension a spouse or child dependents could get if the pension holder dies; any many other things. By all means, apply for a CETV but consider requesting a copy of the Trust Deed of DB pension also. The pension trustees are required to provide this on request of a pension scheme member. Good luck making your decisions

Marcon

https://forums.moneysavingexpert.com/discussion/comment/82136653#Comment_82136653

Whoa - if you are seriously considering transferring out, make sure you have your adviser in place and let them apply for the transfer value on your behalf (obviously with your written authority to do so). A CETV is only guaranteed for 3 months and the adviser will need all of that to ensure they can jump through all the hoops involved.

You might think about getting 'abbreviated advice' which costs far less than 'full' advice. Abbreviated advice is very much cheaper than full, but can only return the answer 'don't recommend' or 'can't tell'. If the latter, you would need to move to full advice before any transfer could proceed, if that's what you decide you want to do. Normally the cost of the abbreviated advice is deducted from the charge for full advice.

xylophone

I will update once I have the new figure.

I'd suggest reading through the thread referenced above - yes, it's long but you might find it instructive…😀

bjorn_toby_wilde

Any reason why you’re not doing it the other way around i.e. drawing for three years from the second pension until you can draw the guaranteed income from the first at 60?

dunstonh

https://forums.moneysavingexpert.com/discussion/comment/82136653#Comment_82136653

Probably going to come back in the region of £160k now (assuming it has been deferred for the whole of that period). (Dec 2021 was peak CETV and they are around half that now).

You also need to update the income figures as well. They get indexed each year.

Cobbler_tone

We get a live CETV value now on our platform, which I have checked with a formal quote request and it was within £300. They must have developed it to reduce requests.

For context, today at the age of 57 my full pension would be £22,251 a year and the CETV is £403,903. Not something I have considered in my thinking for a long time and can't see that I ever would again. Full pension at 65 is £39,646 but I'll be taking it (on a bridge of around £30k with a smallish lump sum) next year to retire.