DB Pension Transfer

Aegis · 24 August 2019 at 4:49PM

dam01163 wrote: »

I agree. The FCA have put frighteners on the pension transfer industry and you have to question whether that in itself was a fit and proper thing.

I wonder. Will the FCA compensate all the people wanting to transfer out but can’t because of this?

Unlikely. Instead they're working on plans to make it even harder to obtain transfer advice. I think the latest I saw was an argument that all providers should be told the appropriate pricing point for this kind of work, based on some absurdly low estimates of time spent on this type of case. If that happens, more firms would likely drop out of the market altogether, as I can't see how it would remain profitable to offer advice.

trickydicky802 · 24 August 2019 at 4:59PM

Aegis wrote: »

£20k fee, on the other hand, is taking the proverbial. We are based in central lond and use fixed fees for pension transfer work which come in under half of that level. It should only reach that point if you're talking multiple schemes or major complexities (e.g. problems with international residence / domicile that need to be explored and addressed on top of the existing complexities).

It was for the transfer of two DB pensions into a single drawdown pension fund. Fee was 2.5%. No other complexities.

What amazed me was they they still went through loads of justification and produced thick reports (because of their computerised models I suppose) to show they would not be disadvantaged by the transfer BUT at no time did they actually mentioned the drastically reduced life-expectancy as the basic reason for the transfer! I'd have thought a simple letter from the oncologist would have been sufficient justification and it could have all been wrapped up for a few £100s.

I've only had a few dealings with IFAs over the years and I've never been that impressed with them. Most seemed too young to know anything about life, never mind finance, and the older ones were obviously not smart enough to have managed retiring debt-free by 50, so hardly in a position to advise really . . . except to advise buying things they could make commission on!

FIRSTTIMER · 24 August 2019 at 5:22PM

This is exactly the problem the government need to address.
Imagine having 30k a year for life age 65 or a CETV transfer value of 1.5 million. Hypothetical.

Next thing you have cancer and two years to live, would your rather have 60k or 1.5 million and leave the cash to your family. DB Pensions tend to cease on death and give minimal imo to dependants.
A lot of civil service pensions are no longer transferrable which I think is a scandal in this situation, especially if you know before drawdown and planning for future....

Aegis · 24 August 2019 at 5:24PM

trickydicky802 wrote: »

It was for the transfer of two DB pensions into a single drawdown pension fund. Fee was 2.5%. No other complexities.

What amazed me was they they still went through loads of justification and produced thick reports (because of their computerised models I suppose) to show they would not be disadvantaged by the transfer BUT at no time did they actually mentioned the drastically reduced life-expectancy as the basic reason for the transfer! I'd have thought a simple letter from the oncologist would have been sufficient justification and it could have all been wrapped up for a few £100s.

I've only had a few dealings with IFAs over the years and I've never been that impressed with them. Most seemed too young to know anything about life, never mind finance, and the older ones were obviously not smart enough to have managed retiring debt-free by 50, so hardly in a position to advise really . . . except to advise buying things they could make commission on!

You'd hope it could be that easy, but sadly there's no exception for the "it's blindingly obvious" type of cases, so we still have to go through the full exercise. You're right that reduced life expectancy should have been mentioned and included as probably the main argument in favour of the transfer. The only reason not to mention it is in the hope that this would help to reduce the likelihood of death within 2 years leading to an IHT charge (there's a very weird bit of legislation around pension transfers where death occurs quickly and could have been predicted to happen quickly, where the benefits temporarily fall into the estate and therefore are deemed to have been a failed Potentially Exempt Transfer). Barring that, it makes sense to mention this repeatedly.

I remember being too young to properly know about life. Nowadays I know a bit more, but I still occasionally get thought of as too young due to being below 40, which is mad.

FIRSTTIMER · 24 August 2019 at 5:28PM

I know a couple of people who are now full service NHS and TPS, retiring, and have taken low paid jobs in civil service to be able to transfer their pension to and then transfer out as a CETV value as there is no other way for them to do it, unless you're an MP of course.

dam01163 · 24 August 2019 at 6:01PM

If anyone knows of an Ifa practice that will assist then by all means reply with their name. In the meantime, I just need an IFA even if they tell me it’s not worth it. They would then sign a form and that’s all I need.

Silvertabby · 24 August 2019 at 6:38PM

FIRSTTIMER wrote: »

I know a couple of people who are now full service NHS and TPS, retiring, and have taken low paid jobs in civil service to be able to transfer their pension to and then transfer out as a CETV value as there is no other way for them to do it, unless you're an MP of course.

If they really have joined the civil service with the intention of transferring their NHS/TPS pensions in, and then out to a DC scheme, then they're stuffed. The civil service pension scheme is also unfunded, and can't be transferred out to a DC scheme.

Do you mean Local Government/LGPS ?

If this story is true (and they did join the LGPS), then ouch and double ouch. Unlike some of the 30 or 40 times annual pension CETV values bandied around on these boards, transfer out factors for the LGPS are set by GAD - and are notoriously poor. A CETV of 18 times the annual pension given up wouldn't raise my eyebrows.

Albermarle · 24 August 2019 at 6:52PM

If anyone knows of an Ifa practice that will assist then by all means reply with their name

Sorry you will not find anybody willing to make specific recommendations normally . In any case they might suggest somebody in a village in Norfolk and you live in Northern Ireland.

except to advise buying things they could make commission on!

IFA's are forbidden to take commission anymore .

dam01163 · 24 August 2019 at 7:02PM

IFAs take a fee now. Fee based advice. Usually a percentage of the CETV. Regardless of the logistics, telephone based advice does exist and so I will only need such an appointment. Ps, I live nowhere near the place stated.

I’ve only just got my cetv, so I am only 3 days into this. I won’t give up just yet.

As an ex advisor now retired, I’ve no reason to believe my own judgements would warrant not doing a transfer too if you get me?

HappyHarry · 24 August 2019 at 9:50PM

dam01163 wrote: »

IFAs take a fee now. Fee based advice. Usually a percentage of the CETV. Regardless of the logistics, telephone based advice does exist and so I will only need such an appointment. Ps, I live nowhere near the place stated.

I’ve only just got my cetv, so I am only 3 days into this. I won’t give up just yet.

As an ex advisor now retired, I’ve no reason to believe my own judgements would warrant not doing a transfer too if you get me?

If you are an ex adviser, then you should understand the issues between advisers, the FCA, the FOS and PPI providers.

You could the avoid saying things like

They would then sign a form and that’s all I need.

DB Pension Transfer

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